FORM OF BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of November __, 2003, is between
Deutsche Bank Trust Company Americas (the "Auction Agent") (not in its
individual capacity, but solely as agent of First Trust/Four Corners Senior
Floating Rate Income Fund (the "Fund")), pursuant to authority granted to it in
the Auction Agency Agreement between the Fund and the Auction Agent dated as of
November __, 2003 (the "Auction Agency Agreement") and _______ (together with
its successors and assigns, the "Broker-Dealer").
The Fund proposes to issue an aggregate amount of ____ shares of its
Money Market Cumulative Preferred(R) Shares, $0.01 par value per share,
liquidation preference of $25,000 per share (the "MMP Shares"), authorized by,
and subject to the terms and conditions of, the Statement Establishing and
Fixing the Rights and Preferences of Money Market Cumulative Preferred(R) Shares
(the "Statement").
The Statement provides that for each Dividend Period of outstanding
series of MMP Shares following the initial Dividend Period, the Applicable Rate
for each series of MMP Shares shall be equal to the rate per annum that results
from an Auction for outstanding shares of each series of MMP Shares. The Board
of Trustees of the Fund has adopted resolutions appointing Deutsche Bank Trust
Company Americas as Auction Agent for purposes of the Auction Procedures, and
pursuant to Section 2.5 of the Auction Agency Agreement, the Fund has requested
and directed the Auction Agent to execute and deliver this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Auction Agent and Broker-Dealer agree as
follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Statement.
Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Statement.
1.2 Terms Defined Herein.
As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
(a) "Auction" shall have the meaning specified in Section 2.1 of
the Auction Agency Agreement.
(b) "Auction Procedures" shall mean the procedures as from time to
time in effect for conducting Auctions that are set forth Part II of the
Statement.
(c) "Authorized Officer" shall mean each Vice President, Assistant
Vice President and Associate of the Auction Agent and every other officer or
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employee of the Auction Agent designated as an "Authorized Officer" for purposes
hereof in a written communication from the Auction Agent to the Fund.
(d) "Broker-Dealer Officer" shall mean each officer or employee of
a Broker-Dealer designated as a "Broker-Dealer Officer" for purposes of this
Agreement in a written communication to the Auction Agent.
(e) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
(f) "Statement" shall mean the Statement Establishing and Fixing
the Rights and Preferences of Money Market Cumulative Preferred(R) Shares in
effect at the time the Registration Statement relating to the MMP Shares is
declared effective by the Securities and Exchange Commission, specifying the
powers, preferences and rights of the MMP Shares.
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New York City time.
II. NOTIFICATION OF DIVIDEND.
The provisions contained in Section 4 of Part I of the Statement
concerning the notification of a Special Dividend Period will be followed by the
Auction Agent and Broker-Dealer, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
III. THE AUCTION.
3.1 Purpose; Incorporation by Reference of Auction Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures
will be followed by the Auction Agent for the purpose of determining the
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Applicable Rate for the MMP Shares for the next Dividend Period. Each periodic
operation of such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein. In the case of any conflict between the terms of any document
incorporated herein by reference and the terms hereof, the terms in this
agreement shall control.
(c) Broker-Dealer agrees to act as, and assumes the obligations of
and limitations and restrictions placed upon, a Broker-Dealer under this
Agreement. Broker-Dealer understands that other persons meeting the requirements
specified in the definition of "Broker-Dealer" contained in Section 17 of the
Statement may execute a Broker-Dealer Agreement and participate as
Broker-Dealers in Auctions.
(d) Broker-Dealer and other Broker-Dealers may participate in
Auctions for their own accounts. However, the Fund, by notice to Broker-Dealer
and all other Broker Dealers, may prohibit all Broker-Dealers from submitting
Bids in Auctions for their own accounts, provided that Broker-Dealers may
continue to submit Hold Orders and Sell Orders.
3.2 Preparation for Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for the MMP
Shares, the Auction Agent shall advise Broker-Dealer by telephone of the
Reference Rate and the Maximum Applicable Rate in effect on such Auction Date.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent has given the notice referred to in paragraph
(a) of the settlement procedures set forth on Exhibit A hereto (the "Settlement
Procedures"), the Auction Agent, by such means as the Auction Agent reasonably
deems practicable, shall give notice of such change to Broker-Dealer not later
than the earlier of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the old
Auction Date. Thereafter, Broker-Dealer promptly shall notify customers of
Broker-Dealer that Broker-Dealer believes are Beneficial Owners of MMP Shares of
such change in the Auction Date.
(c) The Auction Agent from time to time may request Broker-Dealer
to provide it with a list of the respective customers Broker-Dealer believes are
Beneficial Owners of MMP Shares. Broker-Dealer shall comply with any such
request, and the Auction Agent shall keep confidential any such information,
including information received as to the identity of Bidders in any Auction, and
shall not disclose any such information so provided to any Person other than the
Fund; and such information shall not be used by the Auction Agent or its
officers, employees, agents or representatives for any purpose other than such
purposes as are described herein. Notwithstanding the foregoing, the Auction
Agent reserves the right and is authorized to disclose any such information if
(a) it is ordered to do so by a court of competent jurisdiction or a regulatory
body, judicial or quasi-judicial agency or authority having the authority to
compel such disclosure or (b) it is advised by its counsel that its failure to
do so would be unlawful. In the event that the Auction Agent is required to
disclose information in accordance with the foregoing sentence, it shall provide
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written notice of such requirement to Broker-Dealer as promptly as practicable.
The Auction Agent shall transmit any list of customers Broker-Dealer believes
are Beneficial Owners of MMP Shares and information related thereto only to its
officers, employees, agents or representatives who need to know such information
for the purposes of acting in accordance with this Agreement, and the Auction
Agent shall prevent the transmission of such information to others and shall
cause its officers, employees, agents and representatives to abide by the
foregoing confidentiality restrictions.
3.3 Auction Schedule; Method of Submission of Orders.
(a) The Fund and the Auction Agent shall conduct Auctions for the
MMP Shares in accordance with the schedule set forth below. Such schedule may be
changed at any time by the Auction Agent with the consent of the Fund, which
consent shall not be withheld unreasonably. The Auction Agent shall give notice
of any such change to Broker-Dealer. Such notice shall be received prior to the
first Auction Date on which any such change shall be effective.
Time Event
-------------------------- ---------------------------------------
By9:30 a.m. The Auction Agent shall advise the Fund and
the Broker-Dealers of the Reference Rate and
the Maximum Rate as set forth in Section
3.2(a) hereof.
9:30 a.m. - 1:00 p.m. The Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 2 of Part II of the
Statement. Submission Deadline is 1:00 P.M.
Not earlier than 1:00 p.m. The Auction Agent shall make determinations
pursuant to Section 3 of Part II of the
Statement.
By approximately 3:00 p.m. The Auction Agent shall advise the Fund of
the results of the Auction as provided in
Section 3(b) of Part II of the Statement.
Submitted Bids and Submitted Sell Orders will
be accepted and rejected in whole or in part
and MMP Shares will be allocated as provided
in Section 4 of Part II of the Statement.
The Auction Agent shall give notice of the
Auction results as set forth in Section
3.4(a) hereof.
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The Auction Agent will follow the Bond Market Association's Market
Practice U.S. Holiday Recommendations for shortened trading days for the bond
markets (the "BMA Recommendation") unless the Auction Agent is instructed
otherwise. In the event of a BMA Recommendation on an Auction Date, the
Submission Deadline will be 11:30 a.m., instead of 1:00 p.m., and as a result
the notice set forth in Section 3.3 will occur earlier.
(b) Broker-Dealer agrees to maintain a list of Potential
Beneficial Owners and to contact the Potential Beneficial Owners on such list on
or prior to each Auction Date for the purposes set forth in Section 1(a)(ii) of
Part II of the Statement.
(c) Broker-Dealer shall submit Orders to the Auction Agent in
writing in substantially the form attached hereto as Exhibit B. Broker-Dealer
shall submit separate Orders to the Auction Agent for each Potential Beneficial
Owner or Beneficial Owner on whose behalf Broker-Dealer is submitting an Order
and shall not net or aggregate the Orders of Potential Beneficial Owners or
Beneficial Owners on whose behalf Broker-Dealer is submitting Orders.
(d) Broker-Dealer shall deliver to the Auction Agent (i) a
written notice, substantially in the form attached hereto as Exhibit C, of
transfers of MMP Shares, made through Broker-Dealer by an Existing Holder to
another Person other than pursuant to an Auction, and (ii) a written notice,
substantially in the form attached hereto as Exhibit D, of the failure of MMP
Shares to be transferred to or by any Person that purchased or sold MMP Shares
through Broker-Dealer pursuant to an Auction. The Auction Agent is not required
to accept any notice delivered pursuant to the terms of the foregoing sentence
with respect to an Auction unless it is received by the Auction Agent by 3:00
P.M. on the Business Day preceding the applicable Auction Date.
3.4 Notice of Auction Results.
(a) On each Auction Date, the Auction Agent shall provide to
Broker-Dealer the notice required by paragraph (a) of the Settlement Procedures.
On the Business Day next succeeding such Auction Date, the Auction Agent shall
notify Broker-Dealer in writing of the disposition of all Orders submitted by
Broker-Dealer in the Auction held on such Auction Date.
(b) Broker-Dealer shall notify each Beneficial Owner,
Potential Beneficial Owner, Existing Holder or Potential Holder on whose behalf
Broker-Dealer has submitted an Order as set forth in paragraph (b) of the
Settlement Procedures, and take such other action as is required of
Broker-Dealer pursuant to the Settlement Procedures.
If any Beneficial Owner or Existing Holder selling MMP Shares in an
Auction fails to deliver such MMP Shares, the Broker-Dealer of any Person that
was to have purchased MMP Shares in such Auction may deliver to such Person a
number of whole MMP Shares that is less than the number of MMP Shares that
otherwise was to be purchased by such Person. In such event, the number of MMP
Shares to be so delivered shall be determined by such Broker-Dealer. Delivery of
such lesser number of MMP Shares shall constitute good delivery. Upon the
occurrence of any such failure to deliver MMP Shares, such Broker-Dealer shall
deliver to the Auction Agent the notice required by Section 3.3(d)(ii) hereof.
Notwithstanding the foregoing terms of this Section 3.4(b), any delivery or
non-delivery of MMP Shares which represents any departure from the results of an
Auction, as determined by the Auction Agent, shall be of no effect unless and
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until the Auction Agent shall have been notified of such delivery or
non-delivery in accordance with the terms of Section 3.3(d) hereof.
3.5 Service Charge to be Paid to Broker-Dealer.
Not later than 3:00 p.m. on each Dividend Payment Date, the Auction
Agent after each Auction will pay to each Broker-Dealer, from funds provided by
the Fund, a service charge in the amount equal to: (i) in the case of any
Auction immediately preceding a Dividend Period of less than one year, the
product of (A) a fraction the numerator of which is the number of days in the
Dividend Period (calculated by counting the first day of such Dividend Period
but excluding the last day thereof) and the denominator of which is 360, times
(B) 1/4 of 1%, times (C) $25,000 times (D) the sum of the aggregate number of
MMP Shares placed by such Broker-Dealer, or (ii) the amount mutually agreed upon
by the Fund and the Broker-Dealers in the case of any Auction immediately
preceding a Dividend Period of one year or longer. For the purposes of the
preceding sentence, the MMP Shares shall be placed by a Broker-Dealer if such
shares were (i) the subject of Hold Orders deemed to have been submitted to the
Auction Agent by the Broker-Dealer and were acquired by the Broker-Dealer for
its own account or were acquired by the Broker-Dealer for its customers who are
Beneficial Owners or (ii) the subject of an Order submitted by the Broker-Dealer
that is (a) a Submitted Bid of an Existing Holder that resulted in the Existing
Holder continuing to hold the shares as a result of the Auction or (b) a
Submitted Bid of a Potential Holder that resulted in the Potential Holder
purchasing the shares as a result of the Auction or (iii) a valid Hold Order.
For the avoidance of doubt, only one Broker-Dealer shall be considered to have
placed a particular Preferred Share at any particular Auction for purposes of
this Section 3.5.
IV. THE AUCTION AGENT.
4.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund
hereunder and owes no fiduciary duties to any Person.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are set forth specifically in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Auction
Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or omitted by
it, or for any error of judgment made by it in the performance of its duties
under this Agreement. The Auction Agent shall not be liable for any error of
judgment made in good faith unless the Auction Agent shall have been grossly
negligent in ascertaining (or failing to ascertain) the pertinent facts.
4.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely upon, and shall be
fully protected in acting or refraining from acting in accordance with, any
communication authorized by this Agreement and any proper written instruction,
notice, request, direction, consent, report, certificate, share certificate or
other instrument, paper or document reasonably believed by it to be genuine and
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appropriately authorized. The Auction Agent shall not be liable for acting upon
any telephone communication authorized by this Agreement which the Auction Agent
reasonably believes in good faith, after reasonable inquiry, to have been given
by the Fund or by a Broker-Dealer. The Auction Agent may record telephone
communications with the Fund or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice, and
the advice of such counsel, shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by the Auction
Agent hereunder in good faith and in reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder. Unless otherwise instructed by the
Fund in writing, the Auction Agent (i) shall not be obligated to invest any
money received by it hereunder and (ii) shall be under no liability for interest
on any money received by it hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
(e) The Auction Agent shall not be required to, and does not, make
any representations as to the validity, accuracy, value or genuineness of any
signatures or endorsements, other than its own and those of its authorized
officers.
(f) Any corporation into which the Auction Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Auction Agent shall be
a party, or any corporation succeeding to the [Dealing and Trading] business of
the Auction Agent shall be the successor of the Auction Agent hereunder, with
the consent of the Fund but without the execution or filing of any paper with
any party hereto or any further act on the part of any of the parties hereto,
except where any instrument of transfer or assignment may be required by law to
effect such succession, anything herein to the contrary notwithstanding.
(g) All the rights, privileges, immunities and protections granted
to the Auction Agent herein are deemed granted to the Paying Agent and Deutsche
Bank Trust Company Americas in any of the capacities it undertakes in connection
with this Agreement.
(h) Whenever in the administration of the provisions of this
Agreement, the Auction Agent shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering any action to be taken
hereunder, such matter, in the absence of negligence or bad faith on the part of
the Auction Agent, shall be deemed to be conclusively proved and established by
a certificate describing the action requested by the Fund or the Broker Dealer,
signed by the Fund or the Broker Dealer, respectively, and delivered to the
Auction Agent and such certificate, in the absence of negligence or bad faith on
the part of the Auction Agent, shall be full warrant to the Auction Agent for
any action taken or omitted by it under the provisions of this Agreement upon
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the faith thereof. Upon receipt of any such certificate signed by the Fund or
the Broker-Dealer, the Auction Agent shall promptly provide a copy of said
certificate to the Broker-Dealer or the Fund, respectively. The Auction Agent
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, entitlement, order, approval or other paper or document
furnished by the Fund or the Broker-Dealer, except to the extent that such
failure to investigate would be deemed grossly negligent.
V. MISCELLANEOUS.
5.1 Termination.
Any party may terminate this Agreement at any time upon five days'
prior written notice to the other party; provided, however, that if the
Broker-Dealer is Xxxxxx Brothers Inc., either Xxxxxx Brothers Inc. or the
Auction Agent may terminate this Agreement only upon 60 days' prior written
notice to the other party and to the Fund. This Agreement shall automatically
terminate upon the redemption of all outstanding MMP Shares or upon termination
of the Auction Agency Agreement.
5.2 Force Majeure
Neither party to this Agreement shall be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
acts of terrorism; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications services; accidents; labor disputes;
acts of civil or military authority or governmental actions; it being understood
that the parties shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
5.3 Participant in Securities Depository; Payment of Dividends in
Same-Day Funds.
(a) Broker-Dealer is at the date hereof, and shall remain for the
term of this Agreement, a member of, or a participant in, the Securities
Depository (or an affiliate of such a member or participant).
(b) Broker-Dealer represents that it (or if Broker-Dealer does not
act as Agent Member, one of its affiliates) shall make all dividend payments on
the MMP Shares available in same-day funds on each Dividend Payment Date to
customers that use Broker-Dealer (or its affiliate) as Agent Member.
5.4 Communications.
(a) Except for (i) communications authorized to be made by
telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications with the Auctions (other than those expressly required to be made
in writing), all notices, requests and other communications to any party
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hereunder shall be in writing (including telecopy or similar writing) and shall
be given to such party at its address or telecopier number set forth below:
If to the Auction Agent,
addressed to:
Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Mail Stop NYC60 2715
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Broker-Dealer,
addressed to:
Telephone:
Facsimile:
or such other address or telecopier number as such party hereafter may
specify for such purpose by notice to the other party. Each such notice, request
or communication shall be effective when delivered at the address specified
herein. Communications shall be given on behalf of Broker-Dealer by a
Broker-Dealer Officer and on behalf of the Auction Agent by an Authorized
Officer. Broker-Dealer may record telephone communications with the Auction
Agent.
5.5 Entire Agreement.
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.
5.6 Benefits.
Nothing in this Agreement, express or implied, shall give to any
person, other than the Fund, which is a third party beneficiary of this
Agreement, the Auction Agent and Broker-Dealer and their respective successors
and permitted assigns, any benefit of any legal or equitable right, remedy or
claim under this Agreement.
5.7 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the party to
be charged.
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(b) Failure of either party to this Agreement to exercise any
right or remedy hereunder in the event of a breach of this Agreement by the
other party shall not constitute a waiver of any such right or remedy with
respect to any subsequent breach.
5.8 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of
Broker-Dealer and the Auction Agent. This Agreement may not be assigned by
either party hereto absent the prior written consent of the other party.
5.9 Severability.
If any clause, provision or section of this Agreement shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or section shall not affect any
remaining clause, provision or section hereof.
5.10 Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
5.11 Governing Law, Jurisdiction, Waiver of Trial By Jury.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW, OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF NEW YORK). THE PARTIES AGREE HERETO THAT ALL ACTIONS AND
PROCEEDINGS ARISING OUT OF THIS BROKER-DEALER AGREEMENT OR ANY TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE BROUGHT IN THE COURTS LOCATED IN THE BOROUGH OF
MANHATTAN, CITY OF NEW YORK, STATE OF NEW YORK.
EACH PARTY WAIVES ANY OBJECTION THAT IT MAY HAVE THAT SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN THE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF
NEW YORK AND STATE OF NEW YORK WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME. [EACH OF THE PARTIES HERETO ALSO IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.]
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
---------------------------------------
Name:
Title:
[Broker-Dealer]
By:
---------------------------------------
Name:
Title:
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EXHIBIT A
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SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings
specified in the Statement.
(a) On each Auction Date, the Auction Agent shall notify by telephone,
or through the Auction Agent's auction processing system, the Broker-Dealers
that participated in the Auction held on such Auction Date and submitted an
Order on behalf of any Beneficial Owner or Potential Beneficial Owner of:
(i) the Applicable Rate fixed for the next succeeding Dividend
Period;
(ii) whether Sufficient Clearing Bids existed for the determination
of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a
Bid or a Sell Order on behalf of a Beneficial Owner, the number of MMP Shares,
if any, to be sold by such Beneficial Owner;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a
Bid on behalf of a Potential Beneficial Owner, the number of MMP Shares, if any,
to be purchased by such Potential Beneficial Owner;
(v) if the aggregate number of MMP Shares to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid or a Sell
Order exceeds the aggregate number of MMP Shares to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid,
the name or names of one or more Buyer's Broker-Dealers (and the name of the
Agent Member, if any, of each such Buyer's Broker-Dealer) acting for one or more
purchasers of such excess number of MMP Shares and the number of such MMP Shares
to be purchased from one or more Beneficial Owners on whose behalf such
Broker-Dealer acted by one or more Potential Beneficial Owners on whose behalf
each of such Buyer's Broker-Dealers acted;
(vi) if the aggregate number of MMP Shares to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid
exceeds the aggregate number of MMP Shares to be sold by all Beneficial Owners
on whose behalf such Broker-Dealer submitted a Bid or a Sell Order, the name or
names of one or more Seller's Broker-Dealers (and the name of the Agent Member,
if any, of each such Seller's Broker-Dealer) acting for one or more sellers of
such excess number of MMP Shares and the number of such MMP Shares to be sold to
one or more Potential Beneficial Owners on whose behalf such Broker-Dealer acted
by one or more Beneficial Owners on whose behalf each of such Seller's
Broker-Dealers acted; and
(vii) the Auction Date of the next succeeding Auction with respect to
the MMP Shares.
Page A-1
(b) On each Auction Date, each Broker-Dealer that submitted an Order on
behalf of any Beneficial Owner or Potential Beneficial Owner shall:
(i) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer,
instruct each Potential Beneficial Owner on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, to instruct such
Potential Beneficial Owner's Agent Member to pay to such Broker-Dealer (or its
Agent Member) through the Securities Depository the amount necessary to purchase
the number of MMP Shares to be purchased pursuant to such Bid against receipt of
such MMP Shares and advise such Potential Beneficial Owner of the Applicable
Rate for the next succeeding Dividend Period;
(ii) in the case of a Broker-Dealer that is a Seller's Broker-Dealer,
instruct each Beneficial Owner on whose behalf such Broker-Dealer submitted a
Sell Order that was accepted, in whole or in part, or a Bid that was accepted,
in whole or in part, to instruct such Beneficial Owner's Agent Member to deliver
to such Broker-Dealer (or its Agent Member) through the Securities Depository
the number of MMP Shares to be sold pursuant to such Order against payment
therefor and advise any such Beneficial Owner that will continue to hold MMP
Shares of the Applicable Rate for the next succeeding Dividend Period;
(iii) advise each Beneficial Owner on whose behalf such Broker-Dealer
submitted a Hold Order of the Applicable Rate for the next succeeding Dividend
Period;
(iv) advise each Beneficial Owner on whose behalf such Broker-Dealer
submitted an Order of the Auction Date for the next succeeding Auction; and
(v) advise each Potential Beneficial Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, of the
Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to (a)
above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf of a
Potential Beneficial Owner or a Beneficial Owner shall, in such manner and at
such time or times as in its sole discretion it may determine, allocate any
funds received by it pursuant to (b)(i) above and any MMP Shares received by it
pursuant to (b)(ii) above among the Potential Beneficial Owners, if any, on
whose behalf such Broker-Dealer submitted Bids, the Beneficial Owners, if any,
on whose behalf such Broker-Dealer submitted Bids that were accepted or Sell
Orders, and any Broker-Dealer or Broker-Dealers identified to it by the Auction
Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Beneficial Owner and Beneficial Owner shall
instruct its Agent Member as provided in (b)(i) or (ii) above, as the case may
be;
(ii) each Seller's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through the
Securities Depository to the Agent Member of the Beneficial Owner delivering MMP
Shares to such Broker-Dealer pursuant to (b)(ii) above the amount necessary to
purchase such MMP Shares against receipt of such MMP Shares, and (B) deliver
such MMP Shares through the Securities Depository to a Buyer's Broker-Dealer (or
Page A-2
its Agent Member) identified to such Seller's Broker-Dealer pursuant to (a)(v)
above against payment therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through the
Securities Depository to a Seller's Broker-Dealer (or its Agent Member)
identified pursuant to (a)(vi) above the amount necessary to purchase the MMP
Shares to be purchased pursuant to (b)(i) above against receipt of such MMP
Shares, and (B) deliver such MMP Shares through the Securities Depository to the
Agent Member of the purchaser thereof against payment therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d)(i) above shall
instruct the Securities Depository to execute the transactions described in
(b)(i) or (ii) above, and the Securities Depository shall execute such
transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall instruct
the Securities Depository to execute the transactions described in (d)(ii)
above, and the Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall instruct
the Securities Depository to execute the transactions described in (d)(iii)
above, and the Securities Depository shall execute such transactions.
(f) If a Beneficial Owner selling MMP Shares in an Auction fails to
deliver such MMP Shares (by authorized book-entry), a Broker-Dealer may deliver
to the Potential Beneficial Owner on behalf of which it submitted a Bid that was
accepted a number of whole MMP Shares that is less than the number of MMP Shares
that otherwise was to be purchased by such Potential Beneficial Owner. In such
event, the number of MMP Shares to be so delivered shall be determined solely by
such Broker-Dealer. Delivery of such lesser number of MMP Shares shall
constitute good delivery. Notwithstanding the foregoing terms of this paragraph
(f), any delivery or non-delivery of MMP Shares which shall represent any
departure from the results of an Auction, as determined by the Auction Agent,
shall be of no effect unless and until the Auction Agent shall have been
notified of such delivery or non-delivery in accordance with the provisions of
the Auction Agency Agreement and the Broker-Dealer Agreements.
Page A-3
EXHIBIT B
---------
AUCTION BID FORM
Submit To: Issue:
Money Market Cumulative Preferred Shares
of First Trust/Four Corners Senior
Floating Rate Income Fund
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder:______________________________________
BENEFICIAL OWNER
Shares now held ______________________ HOLD __________________
BID at rate of___________
SELL_______________
POTENTIAL BENEFICIAL OWNER
# of Preferred Shares_________
BID at rate of_________
Notes:
(1) If submitting more than one Bid for one Bidder, use additional
Auction Bid Forms.
(2) If one or more Bids covering in the aggregate more than the
number of outstanding MMP Shares held by any Beneficial Owner
are submitted, such bid shall be considered valid in the order
of priority set forth in the Auction Procedures on the above
issue.
(3) A Hold or Sell Order may be placed only by a Beneficial Owner
covering a number of MMP Shares not greater than the number of
MMP Shares currently held.
(4) Potential Beneficial Owners may make only Bids, each of which
must specify a rate. If more than one Bid is submitted on
behalf of any Potential Beneficial Owner, each Bid submitted
shall be a separate Bid with the rate specified.
(5) Bids may contain no more than three figures to the right of
the decimal point (.001 of 1%). Fractions will not be accepted.
(6) An Order must be submitted in whole MMP Shares of MMP Shares
with an aggregate liquidation preference of $25,000.
-------------------------------------------------
Page B-1
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Authorized Signature:_________________________________
Name:
Title:
Page B-2
EXHIBIT C
---------
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: ____________________________________________________________
("MMP Shares")
We are (check one):
[ ] the Existing Holder named below;
[ ] the Broker-Dealer for such Existing Holder; or
[ ] the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has
transferred _________ MMP Shares to _________________________________________
_________________________________________
(Name of Existing Holder)
_________________________________________
(Name of Broker-Dealer)
_________________________________________
(Name of Agent Member)
By:_______________________________
Printed Name:
Title:
Page C-1
EXHIBIT D
---------
(Note: To be used only for failures to deliver or to pay for
MMP Shares sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for _____________________ (the
"Purchaser"), which purchased _____ MMP Shares of _____________________________
in the Auction held on ____________________ from the seller of such MMP Shares.
We hereby notify you that (check one):
______ the Seller failed to deliver such MMP Shares to the Purchaser.
______ the Purchaser failed to make payment to the Seller upon delivery
of such MMP Shares.
Name:_________________________________
By:___________________________________
Printed Name:
Title:
Page D-1
