EXHIBIT (k)(2)
ING CLARION REAL ESTATE INCOME FUND
AUCTION AGENCY AGREEMENT
dated as of November 21, 2003
Relating to
Auction Preferred Shares
Series W28
of
ING CLARION REAL ESTATE INCOME FUND
The Bank of New York,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of
November 21, 2003, is between ING Clarion Real Estate Income Fund (the "Trust")
and The Bank of New York, a New York banking corporation.
The Trust proposes to issue an aggregate of 4,200 preferred
shares, par value $0.001 per share, liquidation preference $25,000 per share,
designated as Auction Preferred Shares, Series W28 (the "APS"), pursuant to the
Statement of Preferences (as defined below).
The Trust desires that The Bank of New York perform certain
duties as agent in connection with each Auction (as defined below) (in such
capacity, the "Auction Agent"), and as the transfer agent, registrar, dividend
paying agent and redemption agent with respect to the APS (in such capacity, the
"Paying Agent"), upon the terms and conditions of this Agreement, and the Trust
hereby appoints The Bank of New York as said Auction Agent.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Trust and the Auction Agent agree as
follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to Statement.
Capitalized terms not defined herein shall have the respective
meanings specified in the Statement.
1.2 Terms Defined Herein.
As used herein and in the Settlement Procedures, the following
terms shall have the following meanings, unless the context otherwise requires:
(a) "Agent Member" of any Person shall mean the
member of, or participant in, the Securities Depository that will act on behalf
of a Bidder.
(b) "Agreement" shall mean the Agreement relating to
one or more series of APS.
(c) "APS" shall mean the preferred shares, par value
$.001 per share, of the Trust designated as its "Auction Preferred Shares" and
bearing such further designation as to series as the Board of Trustees, of the
Trust or any committee thereof shall specify.
(d) "Auction" shall have the meaning specified in
Section 2.1 hereof.
(e) "Auction Procedures" shall mean the auction
procedures constituting Part II of the form of Statement as of the filing
thereof.
(f) "Authorized Officer" of the Auction Agent shall
mean each Vice President, Assistant Vice President and Assistant Treasurer of
the Auction Agent assigned to the Dealing and Trading Group of its Corporate
Trust Department and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes hereof in a written
communication to the Trust.
(g) "Broker-Dealer Agreement" shall mean each
agreement between the Auction Agent and a Broker-Dealer substantially in the
form attached hereto as Exhibit A.
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(h) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit B.
(i) "Statement" shall mean the Statement of
Preferences of Auction Preferred Shares, as the same may be amended,
supplemented or modified from time to time.
(j) "Trust Officer" shall mean the Chairman and Chief
Executive Officer, the President, the Secretary and the Treasurer of the Trust
and every other officer or employee of the Trust designated as a "Trust Officer"
for purposes hereof in a notice to the Auction Agent.
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 the
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 the Agreement nor
shall they affect its meaning, construction or effect.
(c) The words "hereof, "herein", "hereto" and other
words of similar import refer to the Agreement as a whole.
(d) All references herein to a particular time of day
shall be to New York City time.
(e) This Agreement shall apply separately but equally
to all series of APS that may be issued. Sections 1 and 2 hereof shall be read
in conjunction with the Statement and in the event of any conflict with the
Statement, the Statement shall take precedence.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures.
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(a) The Board of Trustees of the Trust has adopted a
resolution appointing The Bank of New York as Auction Agent for purposes of the
Auction Procedures. The Auction Agent hereby accepts such appointment and agrees
that, on each Auction Date, it shall follow the procedures set forth in this
Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for any Subsequent Rate Period of any series of APS for which
the Applicable Rate is to be determined by auction. Each periodic implementation
of such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction
Procedures and the Settlement Procedures are incorporated herein by reference in
their entirety and shall be deemed to be a part hereof to the same extent as if
such provisions were fully set forth herein.
2.2 Preparation for Each Auction; Maintenance of Registry
of Beneficial Owners.
(a) Not later than seven days prior to the first
Auction Date for the first series of APS subject to an Auction, the Trust shall
provide the Auction Agent with a list of the Broker-Dealers. Not later than
seven days prior to any Auction Date for any series of APS for which any change
in such list of Broker-Dealers is to be effective, the Trust will notify the
Auction Agent in writing of such change and, if any such change involves the
addition of a Broker-Dealer to such list, shall cause to be delivered to the
Auction Agent for execution by the Auction Agent a Broker-Dealer Agreement
signed by such Broker-Dealer; provided, however, that if the Trust proposes to
designate any Special Rate Period of any series of APS pursuant to Section 3 of
Part I of the Statement, not later than 11:00 A.M. on the Business Day next
preceding the Auction next preceding the first day of such Rate Period or by
such later time or date, or both, as may be agreed to by the Auction Agent, the
Trust shall provide the Auction Agent with a list of the Broker-Dealers for such
series and a manually signed copy of each Broker-Dealer Agreement or a new
Schedule A to a Broker-Dealer Agreement (which Schedule A shall replace and
supersede any previous Schedule A to such Broker-Dealer Agreement) with each
Broker-Dealer for such series. The Auction Agent and the Trust shall have
entered into a Broker-Dealer Agreement with each Broker-Dealer prior to the
participation of any such Broker-Dealer in any Auction.
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(b) In the event that any Auction Date for any series
of APS shall be changed after the Auction Agent shall have given the notice
referred to in clause (vi) of paragraph (a) of the Settlement Procedures, or
after the notice referred to in Section 2.3 hereof, if applicable, the Auction
Agent, by such means as the Auction Agent deems practicable, shall give notice
of such change to the Broker-Dealers for such series 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.
(c) (i) The Auction Agent shall maintain a
registry of the beneficial owners of the APS of each series who shall
constitute Existing Holders of APS of such series for purposes of
Auctions and shall indicate thereon the identity of the respective
Broker-Dealer of each Existing Holder, if any, on whose behalf such
Broker-Dealer submitted the most recent Order in any Auction which
resulted in such Existing Holder continuing to hold or purchasing APS
of such series. The Auction Agent shall keep such registry current and
accurate based on the information provided to it from time to time by
the Broker-Dealer. The Trust shall provide or cause to be provided to
the Auction Agent at or prior to the Date of Original Issue of the APS
of each series a list of the initial Existing Holders of the shares of
each such series of APS, the number of shares purchased by each such
Existing Holder and the respective Broker-Dealer of each such Existing
Holder or the affiliate thereof through which each such Existing Holder
purchased such shares. The Auction Agent may rely upon, as conclusive
evidence of the identities of the Existing Holders of APS of any series
(A) such list, (B) the results of Auctions, (C) notices from any
Broker-Dealer as described in the first sentence of Section 2.2(c)(iii)
hereof and (D) the results of any procedures approved by the Trust that
have been devised for the purpose of determining the identities of
Existing Holders in situations where APS may have been transferred
without compliance with any restriction on the transfer thereof set
forth in the Auction Procedures.
(ii) In the event of any partial
redemption of any series of APS, the Auction Agent shall, at least two
Business Days prior to the next Auction for such series, request each
Broker-Dealer to provide the Auction Agent with a list of Persons who
such Broker-Dealer believes should remain Existing Holders after such
redemption based upon inquiries of those Persons such Broker-Dealer
believes are Beneficial Owners as a result of the most recent Auction
and with respect to each such Person, the number of APS of such series
such Broker-Dealer believes are owned by such Person after such
redemption. In the absence of receiving any such information from any
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Broker-Dealer, the Auction Agent may continue to treat the Persons
listed in its registry of Existing Holders as the beneficial owner of
the number of APS of such series shown in such registry.
(iii) The Auction Agent shall be required
to register a transfer of APS of any series from an Existing Holder of
such APS only if such transfer is to another Existing Holder, or other
Person if permitted by the Trust, and only if such transfer is made (A)
pursuant to an Auction, (B) the Auction Agent has been notified in
writing (I) in a notice substantially in the form of Exhibit C to the
Broker-Dealer Agreements by a Broker-Dealer of such transfer or (II) in
a notice substantially in the form of Exhibit D to the Broker-Dealer
Agreements by the Broker-Dealer of any Existing Holder, or other Person
if permitted by the Trust, that purchased or sold such APS in an
Auction of the failure of such APS to be transferred as a result of
such Auction or (C) pursuant to procedures approved by the Trust that
have been devised for the purpose of determining the identities of
Existing Holders in situations where APS may have been transferred
without compliance with any restriction on the transfer thereof set
forth in the Auction Procedures. The Auction Agent is not required to
accept any such notice for an Auction unless it is received by the
Auction Agent by 1:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may, but shall have no
obligation to, request the Broker-Dealers, as set forth in the Broker-Dealer
Agreements, to provide the Auction Agent with a list of Persons who such
Broker-Dealer believes should be Existing Holders based upon inquiries of those
Persons such Broker-Dealer believes are Beneficial Owners as a result of the
most recent Auction and with respect to each such Person, the number of shares
of such series of APS such Broker-Dealer believes to be owned by such Person.
The Auction Agent shall keep confidential such registry of Existing Holders and
shall not disclose the identities of the Existing Holders of such APS to any
Person other than the Trust and the Broker-Dealer that provided such
information; provided, however, that 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, (b) it is
advised by its counsel that its failure to do so would be unlawful or (c)
failure to do so would expose the Auction Agent to loss, liability, claim,
damage or expense for which it has not received indemnity or security
satisfactory to it.
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2.3 Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with
the schedule set forth below. Such schedule may be changed by the Auction Agent
with the consent of the Trust, which consent shall not be unreasonably withheld.
The Auction Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given prior to the close of business on the
Business Day next preceding the first Auction Date on which any such change
shall be effective.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Trust and
Broker-Dealers of the applicable
Maximum Rate and the Reference Rate
used in determining such Maximum
Rate.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers
as provided in Section 2(a) of the
Auction Procedures. Submission
Deadline is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations
pursuant to Section 3(a) of the
Auction Procedures.
By approximately 3:30 P.M. Auction Agent advises Trust of
results of Auction as provided in
Section 3(b) of the Auction
Procedures.
Submitted Bids and Submitted Sell
Orders are accepted and rejected
and APS allocated as provided in
Section 4 of the Auction
Procedures. Auction Agent gives
notice of Auction results as set
forth in paragraph(a) of the
Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
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2.4 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted
a Bid or Sell Order in an Auction whether such Bid or Sell Order was accepted or
rejected in whole or in part and of the Applicable Rate for the next Dividend
Period for the related APS by telephone or by other electronic means acceptable
to the parties through its Auction Processing System as set forth in paragraph
(a) of the Settlement Procedures.
2.5 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction
Date for any series of APS, the Trust shall pay to the Auction Agent an amount
in cash equal to the aggregate fees payable to the Broker-Dealers for such
series pursuant to Section 2.7 of the Broker-Dealer Agreements for such series.
The Auction Agent shall apply such moneys as set forth in Section 2.7 of each
such Broker-Dealer Agreement.
(b) The Trust shall obtain the consent of the
Auction Agent prior to selecting any Person to act as a Broker-Dealer, which
consent shall not be unreasonably withheld.
(c) The Auction Agent shall terminate any
Broker-Dealer Agreement as set forth therein if so directed by the Trust,
provided that at least one Broker-Dealer Agreement would be in effect for each
series of APS after such termination.
(d) Subject to the Auction Agent's having
consented to the selection of the relevant Broker-Dealer pursuant to Section
2.5(b) hereof, the Auction Agent shall from time to time enter into such
Broker-Dealer Agreements with one or more Broker-Dealers as the Trust shall
request, and shall enter into such schedules to any such Broker-Dealer
Agreements as the Trust shall request, which schedules, among other things,
shall set forth the series of APS to which such Broker-Dealer Agreement relates.
2.6 Information Concerning Rates.
(a) The Applicable Percentage on the date of the
Agreement is that rate as determined by the Trust and provided to the Auction
Agent on the date even herewith. If there is any change in the credit rating of
APS by the rating agency (or substitute or successor rating agencies) referred
to in the definition of "Applicable
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Percentage" resulting in any change in the Applicable Percentage for APS after
the date given herewith, the Trust shall notify the Auction Agent in writing of
such change in the Applicable Rate prior to 12:00 Noon on the Business Day prior
to the next Auction Date for any series of APS succeeding such change. In
determining the Maximum Rate for any series of APS on any Auction Date as set
forth in 2.6(a)(i) hereof, the Auction Agent shall be entitled to rely on the
last Applicable Percentage for APS of which it has most recently received notice
from the Trust (or, in the absence of such notice, the percentage determined by
reference to the definition of Applicable Percentage).
(i) On each Auction Date for any series of APS,
the Auction Agent shall determine the Maximum Rate for such series in
accordance with Part I of the Statement. Not later than 9:30 A.M. on
each Auction Date the Auction Agent shall notify the Trust and the
Broker-Dealers of the Maximum Rate and the Reference Rate used to make
such determination.
(ii) From and after a Failure to Deposit by the
Trust during any Rate Period of any series of APS, until such failure
is cured and a Late Charge is paid, in accordance with subparagraph
(e)(i) of Section 2 of Part I of the Statement, on the first day of
each Rate Period of such series the Auction Agent shall determine the
Treasury Note Rate for such Rate Period of more than 364 Rate Period
Days and the Reference Rate for Rate Periods of 364 Rate Period Days or
fewer. Not later than 9:30 A.M. on each such first day, the Auction
Agent shall notify the Trust of the applicable Reference Rate and
Treasury Note Rate.
(iii) If any "AA" Composite Commercial Paper Rate,
Treasury Note Rate or Treasury Xxxx Rate, as the case may be, is not
quoted on an interest or bond equivalent, as the case may be, basis,
the Auction Agent shall convert the quoted rate to the interest or bond
equivalent thereof as set forth in the definition of such rate in the
Statement if the rate obtained by the Auction Agent is quoted on a
discount basis, or if such rate is quoted on a basis other than an
interest or bond equivalent or discount basis the Auction Agent shall
convert the quoted rate to an interest or bond equivalent rate after
consultation with the Trust as to the method of such conversion.
(iv) If any "AA" Composite Commercial Paper Rate
is to be based on rates supplied by Commercial Paper Dealers and one or
more of the Commercial Paper Dealers shall not provide a quotation for
the
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determination of such "AA" Composite Commercial Paper Rate, the Auction
Agent shall promptly notify the Trust so that the Trust can determine
whether to select a Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers to provide the quotation or quotations not
being supplied by any Commercial Paper Dealer or Commercial Paper
Dealers. The Trust shall promptly advise the Auction Agent of any such
selection.
(v) If any Treasury Note Rate or Treasury Xxxx
Rate is to be based on rates supplied by U.S. Government Securities
Dealers and one or more of the U.S. Government Securities Dealers shall
not provide a quotation for the determination of such Treasury Rate,
the Auction Agent shall immediately notify the Trust so that the Trust
can determine whether to select a Substitute U.S. Government Securities
Dealer or Substitute U.S. Government Securities Dealers to provide the
quotation or quotations not being supplied by any U.S. Government
Securities Dealer or U.S. Government Securities Dealers. The Trust
shall promptly advise the Auction Agent of any such selection.
2.7 Designation of Special Rate Period.
(a) The Statement will provide that, subject to
the Trust's option to designate a Special Rate Period as referred to in
paragraph (b) of this Section 2.7, (i) each Rate Period of any series of APS
will have a duration of twenty-eight days, subject to certain exceptions) and
(ii) each Rate Period following a Rate Period of any series of APS that is other
than twenty-eight days will be twenty-eight days in duration. Not less than 10
nor more than 20 days prior to the last day of any such Rate Period that is not
twenty-eight days in duration, (i) the Trust shall deliver to the Auction Agent
a notice of the Auction Date of the next succeeding Auction for such series in
the form of Exhibit C hereto and (ii) the Auction Agent shall deliver such
notice by first-class mail, postage prepaid, to each Existing Holder of shares
of such series at the address set forth for such Existing Holder in the records
of the Auction Agent and to the Broker-Dealers for such series as promptly as
practicable after its receipt of such notice from the Trust.
(b) Pursuant to the Statement, the Trust may, at
its option, designate a Special Rate Period for any series of APS in the manner
described in Section 3 of Part I of the Statement.
(i) If the Board of Trustees proposes
to designate any succeeding Subsequent Rate Period of any series of APS
as a Special Rate
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Period, (A) the Trust shall deliver to the Auction Agent a notice of
such proposed Special Rate Period in the form of Exhibit D hereto not
less than 20 nor more than 30 days prior to the first day of such
proposed Special Rate Period and (B) the Auction Agent on behalf of the
Trust shall deliver such notice by first-class mail, postage prepaid,
to each Existing Holder of shares of such series of APS at the address
set forth for such Existing Holder in the records of the Auction Agent
and to the Broker-Dealers for such series as promptly as practicable
after its receipt of such notice from the Trust.
(ii) If the Board of Trustees determines
to designate such succeeding Subsequent Rate Period as a Special Rate
Period, (A) the Trust shall deliver to the Auction Agent a notice of
such determination in the form of Exhibit E hereto not later than 11
:00 A.M. on the second Business Day next preceding the first day of
such proposed Special Rate Period and (B) the Auction Agent shall
deliver such notice to the Broker-Dealers for such series not later
than 3:00 P.M. on such second Business Day.
(iii) If the Trust shall deliver to the
Auction Agent a notice not later than 11 :00 A.M. on the second
Business Day next preceding the first day of such proposed Special Rate
Period stating that the Trust has determined not to exercise its option
to designate such succeeding Subsequent Rate Period as a Special Rate
Period, in the form of Exhibit F hereto, or shall fail to timely
deliver either such notice or a notice in the form of Exhibit E hereto,
the Auction Agent shall deliver a notice in the form of Exhibit F
hereto to the Broker-Dealers for such series not later than 3:00 P.M.
on such second Business Day.
Such change in the length of any Rate Period shall not occur
if (1) an Auction for shares of such series shall not be held on such Auction
Date for any reason or (2) an Auction for shares of such series shall be held on
such Auction Date but Sufficient Clearing Bids for shares of such series shall
not exist in such Auction.
2.8 Failure to Deposit.
(a) If any Failure to Deposit shall have
occurred with respect to APS during any Rate Period thereof (other than any
Special Rate Period of more than 364 Rate Period Days or any Rate Period
succeeding any Special Rate Period of more than 364 Rate Period Days during
which a Failure to Deposit occurred that has not been cured), but, prior to
12:00 Noon, New York City time, on the third Business Day next succeeding the
date on which such Failure to Deposit occurred, such
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Failure to Deposit shall have been cured in accordance with Section 2.8(c)
hereof and the Trust shall have paid to the Auction Agent a late charge (a "Late
Charge") equal to the sum of (1) if such Failure to Deposit consisted of the
failure timely to pay to the Auction Agent the full amount of dividends with
respect to any Dividend Period on such shares, an amount computed by multiplying
(x) 200% of the Reference Rate for the Rate Period during which such Failure to
Deposit occurs on the Dividend Payment Date for such Dividend Period by (y) a
fraction, the numerator of which shall be the number of days for which such
Failure to Deposit has not been cured in accordance with Section 2.8(c) hereof
(including the day such Failure to Deposit occurs and excluding the day such
Failure to Deposit is cured) and the denominator of which shall be 360, and
applying the rate obtained against the aggregate liquidation preference of the
outstanding APS and (2) if such Failure to Deposit consisted of the failure
timely to pay to the Auction Agent the Redemption Price of the APS, if any, for
which Notice of Redemption has been given by the Trust, an amount computed by
multiplying (x) 200% of the Reference Rate for the Rate Period during which such
Failure to Deposit occurs on the redemption date by (y) a fraction, the
numerator of which shall be the number of days for which such Failure to Deposit
is not cured in accordance with Section 2.8(c) hereof (including the day such
Failure to Deposit occurs and excluding the day such Failure to Deposit is
cured) and the denominator of which shall be 360, and applying the rate obtained
against the aggregate liquidation preference of the outstanding APS to be
redeemed, then the Auction Agent shall deliver a notice in the form of Exhibit G
hereto by first-class mail, postage prepaid, to the Broker-Dealers for such
series not later than one Business Day after its receipt of the payment from the
Trust curing such Failure to Deposit and such Late Charge.
(b) If:
(i) any Failure to Deposit shall have
occurred with respect to APS during any Rate Period thereof (other than
any Special Rate Period of more than 364 Rate Period Days or any Rate
Period succeeding any Special Rate Period of more than 364 Rate Period
Days during which a Failure to Deposit occurred but has not been
cured), and, prior to 12:00 Noon, New York City time, on the third
Business Day next succeeding the date on which such Failure to Deposit
occurred, such Failure to Deposit shall not have been cured in
accordance with Section 2.8(c) hereof or the Trust shall not have paid
the applicable Late Charge to the Auction Agent; or
(ii) any Failure to Deposit shall have
occurred with respect to APS during a Special Rate Period thereof of
more than 364 Rate
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Period Days, or during any Rate Period thereof succeeding any Special
Rate Period of more than 364 Rate Period Days during which a Failure to
Deposit occurred that has not been cured, and, prior to 12:00 noon, New
York City time, on the fourth Business Day preceding the Auction Date
for the Rate Period subsequent to such Rate Period, such Failure to
Deposit shall not have been cured in accordance with Section 2.8(c)
hereof or the Trust shall not have paid the applicable Late Charge to
the Auction Agent in accordance with Section 2(e)(i)(D) of Part I of
the Statement (such Late Charge, for purposes of this clause (b) (ii)
of this Section 2.8, to be calculated by using, as the Reference Rate,
the Reference Rate applicable to a Rate Period (x) consisting of more
than 182 Rate Period Days and (y) commencing on the date on which the
Rate Period during which Failure to Deposit occurs commenced);
then the Auction Agent shall deliver a notice in the form of Exhibit H hereto to
the Broker-Dealers for such series not later than one Business Day after the
receipt of the payment from the Trust curing such Failure to Deposit and such
Late Charge.
(c) A Failure to Deposit with respect to APS
shall have been cured (if such Failure to Deposit is not solely due to the
willful failure to the Trust to make the required payment to the Auction Agent)
with respect to any Rate Period if, within the respective time periods described
immediately above, the Trust shall have paid to the Auction Agent (i) all
accumulated and unpaid dividends on the APS and (ii) without duplication, the
Redemption Price for the APS, if any, for which Notice of Redemption has been
mailed; provided, however, that the foregoing clause (ii) shall not apply to the
Trust's failure to pay the Redemption Price in respect of APS when the related
Redemption Notice provides that redemption of such shares is subject to one or
more conditions precedent and each such condition precedent shall not have been
satisfied at the time or times and in the manner specified in such Notice of
Redemption.
2.9 Ownership of Shares of APS.
The Trust shall notify the Auction Agent if the Trust or,
insofar as the Trust has knowledge, any affiliate of the Trust acquires any APS
of any series. Neither the Trust nor any affiliate of the Trust shall submit any
Order in any Auction for APS, except as set forth in the next sentence. Any
Broker-Dealer that is an affiliate of the Trust may submit Orders in Auctions,
but only if such Orders are not for its own account. For purposes of this
Section 2.9, a Broker-Dealer shall not be deemed to be an affiliate of the Trust
solely because one or more of the directors or
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executive officers of such Broker-Dealer or of any Person controlled by, in
control of or under common control with such Broker-Dealer is also a director of
the Trust. The Auction Agent shall have no duty or liability with respect to
enforcement of this Section 2.9.
2.10 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Trust, its agents,
independent public accountants and counsel and the Broker-Dealers, access at
reasonable times during normal business hours to review and make extracts or
copies of all books, records, documents and other information concerning the
conduct and results of Auctions (at no cost to the Auction Agent), provided that
any such agent, accountant, counsel or Broker-Dealer shall furnish the Auction
Agent with a letter from the Trust requesting that the Auction Agent afford such
person access. The Auction Agent shall maintain records relating to any Auction
for a period of six years after such Auction, and such records shall, in
reasonable detail, accurately and fairly reflect the actions taken by the
Auction Agent hereunder.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing
agent, shall pay to the Holders of APS of any series (i) on each Dividend
Payment Date for such series, dividends on the APS of such series, (ii) on any
date fixed for redemption of APS of any series, the Redemption Price of any
shares of such series called for redemption and (iii) any Late Charge related to
any payment of dividends or Redemption Price, in each case after receipt of the
necessary funds from the Trust with which to pay such dividends, Redemption
Price or Late Charge. The amount of dividends for any Rate Period for any series
of APS to be paid by the Auction Agent to the Holders of such shares of such
series will be determined by the Trust as set forth in Section 2 of Part I of
the Statement with respect to such series. The Redemption Price of any shares to
be paid by the Auction Agent to the Holders will be determined by the Trust as
set forth in Section 10 of Part I of the Statement with respect to such series.
The Trust shall notify the Auction Agent in writing of a decision to redeem
shares of any series of APS at least five days prior to the date a notice of
redemption is required to be mailed to the Holders of the shares to be redeemed
by paragraph (c) of Section 10 of Part I of the Statement. Such notice by the
Trust to the Auction Agent shall contain the information required by paragraph
(c) of Section 10 of Part I of the Statement to be stated in the notice of
redemption required to be mailed by the Trust to such Holders.
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4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Stock or Shares Certificates.
Upon the Date of Original Issue of each series of APS, one or
more certificates representing all of the shares of such series issued on such
date shall be issued by the Trust and, at the request of the Trust, registered
in the name of Cede & Co. and countersigned by the Auction Agent.
4.2 Registration of Transfer of Shares.
Shares of each series of APS shall be registered solely in the
name of the Securities Depository or its nominee.
4.3 Removal of Legend on Restricted Shares.
All requests for removal of legends on APS of any series
indicating restrictions on transfer shall be accompanied by an opinion of
counsel stating that such legends may be removed and such shares freely
transferred, such opinion to be delivered under cover of a letter from a Trust
Officer authorizing the Auction Agent to remove the legend on the basis of said
opinion.
4.4 Lost Stock or Share Certificates.
The Auction Agent shall issue and register replacement
certificates for certificates represented to have been lost, stolen or destroyed
upon the fulfillment of such requirements as shall be deemed appropriate by the
Trust and the Auction Agent, subject at all times to provisions of law, the
By-Laws of the Trust governing such matters and resolutions adopted by the Board
of Trustees of the Trust with respect to lost securities. The Auction Agent may
issue new certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Trust to the Auction Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Trust to the Auction Agent that such
issuance will comply with such provisions of law and the By-Laws and resolutions
of the Board of Trustees of the Trust.
4.5 Disposition of Cancelled Certificates; Record
Retention.
The Auction Agent shall retain all stock or share certificates
which have been cancelled in transfer or exchange and all accompanying
documentation in
15
accordance with applicable rules and regulations of the Securities and Exchange
Commission for two calendar years. The Trust shall also undertake to furnish to
the Securities and Exchange Commission and to the Board of Governors of the
Federal Reserve System, upon demand, at either the principal office or at any
regional office, complete, correct and current hard copies of any and all such
records.
4.6 Stock or Record Books.
For so long as the Auction Agent is acting as the transfer
agent for any series of APS pursuant to the Agreement, it shall maintain a stock
or record book containing a list of the Holders of the APS of each such series.
In case of any request or demand for the inspection of the stock or record books
of the Trust or any other books in the possession of the Auction Agent, the
Auction Agent will notify the Trust and secure instructions as to permitting or
refusing such inspection. The Auction Agent reserves the right, however, to
exhibit the stock or record books or other books to any Person 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, (b) it is advised by its counsel that its failure to do so
would be unlawful or (c) failure to do so would expose the Auction Agent to
loss, liability, claim, damage or expense for which it has not received
indemnity or security satisfactory to it.
4.7 Return of Funds.
Any funds deposited with the Auction Agent hereunder by the
Trust for any reason, including but not limited to redemption of APS of any
series, that remain unpaid after ninety days shall be repaid to the Trust upon
the written request of the Trust.
5. Representations and Warranties.
5.1 Representations and Warranties of the Trust
The Trust represents and warrants to the Auction Agent that:
(a) the Trust is duly organized and existing
statutory trust in good standing under the laws of the State of its
incorporation or organization and has full corporate power or all requisite
power to execute and deliver the Agreement and to authorize, create and issue
the APS of each series, and the APS of each series when issued, will be duly
authorized, validly issued, fully paid and nonassessable;
16
(b) the Agreement has been duly and validly
authorized, executed and delivered by the Trust and constitutes the legal, valid
and binding obligation of the Trust;
(c) the form of the certificate evidencing the
APS of each series complies or will comply with all applicable laws of the State
of its incorporation or organization;
(d) when issued, the APS of each series will
have been duly registered under the Securities Act of 1933, as amended, and no
further action by or before any governmental body or authority of the United
States or of any state thereof is required in connection with the execution and
delivery of the Agreement or will have been required in connection with the
issuance of APS of each series;
(e) the execution and delivery of the Agreement
and the issuance and delivery of the APS of each series do not and will not
conflict with, violate or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, the Agreement and Declaration of
Trust (as amended by one or more Statements) or the By-Laws of the Trust, any
law or regulation, any order or decree of any court or public authority having
jurisdiction, or any mortgage, indenture, contract, agreement or undertaking to
which the Trust is a party or by which it is bound the effect of which conflict,
violation, default or breach would be material to the Trust or the Trust and its
subsidiaries taken as a whole; and
(f) no taxes are payable upon or in respect of
the execution of the Agreement or the issuance of the APS of any series.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Trust that:
(i) The Auction Agent is duly organized
and is validly existing as a banking corporation in good standing under
the laws of the State of New York and has the corporate power to enter
into and perform its obligations under this Agreement; and
(ii) this Agreement has been duly and
validly authorized, executed and delivered by the Auction Agent and
constitutes the legal, valid and binding obligation of the Auction
Agent, enforceable against the Auction
17
Agent in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equitable principles.
6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as a
non-fiduciary agent for the Trust hereunder and owes no duties to any Person,
other than the Trust, by reason of this Agreement.
(b) The Auction Agent undertakes to perform such
duties and only such duties as are specifically set forth 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 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
negligent in ascertaining the pertinent facts.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely and
shall be protected in acting or refraining from acting upon any communication
authorized hereby and upon any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument, paper or
document believed in good faith by it to be genuine. The Auction Agent shall not
be liable for acting upon any telephone communication authorized hereby which
the Auction Agent believes in good faith to have been given by the Trust or by a
Broker-Dealer. The Auction Agent may record telephone communications with the
Trust or with the Broker-Dealers or 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 it hereunder in good faith and in reliance thereon.
18
(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.
(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 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, it being understood that the
Auction Agent shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
6.3 Compensation, Expenses and Indemnification.
(a) The Trust shall pay the Auction Agent an
annual fee as compensation for all services rendered by it under the Agreement
and the Broker-Dealer Agreements as the Trust and the Auction Agent have agreed
to in writing from time to time.
(b) The Trust shall reimburse the Auction Agent
upon its request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Auction Agent in accordance with any provision
of the Agreement and the Broker-Dealer Agreements (including the compensation
and the reasonable expenses and disbursements of its agents and counsel), except
any expense or disbursement attributable to its negligence or bad faith. In no
event shall the Auction Agent be responsible or liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit), even if the Auction Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
(c) The Trust shall indemnify the Auction Agent
for and hold it harmless against any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with its
agency under the Agreement and the Broker-Dealer Agreements, including the costs
and expenses of defending itself against any such claim or liability in
connection with its exercise or performance of any of its duties hereunder and
thereunder.
19
6.4 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity
or adequacy of this Agreement, the Broker-Dealer Agreements, the APS of any
series, or any documents related thereto, except that the Auction Agent hereby
represents that this Agreement has been duly authorized, executed and delivered
by the Auction Agent and constitutes a legal and binding obligation of the
Auction Agent. The Auction Agent shall have no obligation or liability in
respect of the registration or exemption therefrom of the APS under federal or
state securities laws in respect of the sufficiency or the conformity of any
transfer of the APS pursuant to the terms of this Auction Agency Agreement, any
Broker Dealer Agreement or any other document contemplated hereby or thereby.
7. Miscellaneous.
7.1 Term of Agreement.
(a) The term of the Agreement is unlimited
unless it shall be terminated as provided in this Section 7.1. The Trust may
terminate the Agreement at any time by so notifying the Auction Agent, provided
that the Trust has entered into an agreement in substantially the form of the
Agreement with a successor Auction Agent. The Auction Agent may terminate the
Agreement upon written notice to the Trust on the date specified in such notice,
which date shall be no earlier than 45 days after the date of delivery of such
notice. In the event the APS are no longer held in electronic book entry form,
the Auction Agent's responsibilities under the Agreement, as they relate to
Auctions, shall be suspended until such time as the APS are again held in
electronic book entry form.
(b) Except as otherwise provided in this
paragraph (b), the respective rights and duties of the Trust and the Auction
Agent under the Agreement with respect to any series of APS shall cease upon
termination of the Agreement with respect to such series. The Trust's
representations, warranties, covenants and obligations to the Auction Agent
under Sections 5 and 6.3 hereof shall survive the termination of the Agreement
with respect to any series of APS. Upon termination of the Agreement with
respect to any series of APS, the Auction Agent shall, at the Trust's request,
promptly deliver to the Trust copies of all books and records maintained by it
with respect to APS in connection with its duties hereunder.
20
7.2 Communications.
Except for (i) communications authorized to be by telephone
pursuant to the Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party, addressed to it, at its address or telecopy number set forth below and,
where appropriate, reference the particular Auction to which such notice
relates:
If to the Trust, ING Clarion Real Estate Income Fund
000 Xxxxx Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Secretary
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
If to the Auction Agent, The Bank of New York
000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Dealing and Trading
Group - Auction Desk
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
Each such notice, request or communication shall be effective
when delivered at the address specified herein. Communications shall be given on
behalf of the Trust by a Trust Officer and on behalf of the Auction Agent by
telephone (confirmed by telecopy or in writing) by an Authorized Officer.
7.3 Entire Agreement.
This Agreement contains the entire agreement between the
parties relating to, and superseding any prior 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 except for agreements
relating to the compensation of the Auction Agent.
21
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person,
other than the Trust, the Auction Agent and their respective successors and
assigns, any benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) This Agreement shall not be deemed or
construed to be modified, amended, rescinded, cancelled or waived, in whole or
in part, except by a written instrument signed by a duly authorized
representative of the party to be charged.
(b) Failure of either party hereto to exercise
any right or remedy hereunder in the event of a breach hereof by the other party
shall not constitute a waiver of any such right or remedy with respect to any
subsequent breach.
7.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by, the respective successors and assigns of each of the
Trust and the Auction Agent. This Agreement may not be assigned by any party
hereto absent the prior written consent of the other party.
7.7 Severability.
If any clause, provision or section hereof 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 of
the remaining clauses, provisions or sections hereof.
7.8 Disclosure of Information.
The Auction Agent agrees that it will not disclose or use any
"non-public personal information" about the Trust's shareholders other than such
uses or disclosures as are permitted by Regulation S-P under Section 504 of the
Xxxxx-Xxxxx-Xxxxx Act ("Regulation S-P"). "Nonpublic personal information" about
a shareholder shall mean: (i) personally identifiable financial information;
(ii) any list, description, or other grouping of consumers that is derived from
using any personally identifiable information that is not publically available;
and (iii) any other
22
information that a Customer or the Transfer Agent is prohibited from using or
disclosing pursuant to Regulation S-P.
7.9 Governing Law.
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 that all actions and
proceedings arising out of this Auction Agency Agreement or any of the
transactions contemplated hereby shall be brought in the County of New York and,
in connection with any such action or proceeding, submit to the jurisdiction of,
and venue in, such County. Each of the parties hereto also irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim arising out
of this Auction Agency Agreement or the transactions contemplated hereby.
23
ING CLARION REAL ESTATE
INCOME FUND
By:___________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
THE BANK OF NEW YORK
By:___________________________
Name:
Title:
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
B-1
EXHIBIT C
ING CLARION REAL ESTATE INCOME FUND
NOTICE OF AUCTION DATE FOR
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that the Auction Date of the next
Auction for Series_________of the Trust's APS is scheduled to
be_____________________________, 20_____and the next Dividend Payment Date for
Series________________of the Trust's APS will be ___________________________,
20_____.
[A Failure to Deposit in respect of the Series___________APS
currently exists. If, prior to 12:00 noon, New York City time, on the fourth
Business Day preceding the next scheduled Auction Date of the
Series__________________APS, such Failure to Deposit is not cured or the
applicable Late Charge is not paid, the next Auction will not be held. Notice of
the next Auction for the Series_____________APS will be delivered when such
Failure to Deposit is cured and the applicable Late Charge is paid.(1)]
ING CLARION REAL ESTATE INCOME
FUND
______________________________
(1) Include this language if a Failure to Deposit exists.
C-1
EXHIBIT D
ING CLARION REAL ESTATE INCOME FUND
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
ING Clarion Real Estate Income Fund (the "Trust") may exercise
its option to designate the Rate Period of its Series______________APS
commencing [the first day of the Special Rate Period] as a Special Rate Period.
By 11:00 A.M. on the second Business Day preceding the first
day of such proposed Special Rate Period, the Trust will
notify______________________________________of either (a) its determination to
exercise such option, designating the length of such Special Rate Period for
such series or (b) its determination not to exercise such option.
ING CLARION REAL ESTATE INCOME
FUND
______________________________
Dated: _________________, 20___
D-1
EXHIBIT E
ING CLARION REAL ESTATE INCOME FUND
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that (the "Trust") has determined to
designate the Rate Period of its Series___________APS commencing on [the first
day of the Special Rate Period] as a Special Rate Period.
The Special Rate Period will be______________________[Rate
Period Days].
The Auction Date for the Special Rate Period is [the Business
Day next preceding the first day of such Special Rate Period].
As a result of the Special Rate Period designation, the amount
of dividends payable on Series____________APS during the Special Rate Period
will be based on a 360-day year.
The Special Rate Period shall not commence if (a) an Auction
for APS shall not be held on such Auction Date for any reason or (b) an Auction
for APS shall be held on such Auction Date but Sufficient Clearing Bids for such
shares shall not exist in such Auction.
The scheduled Dividend Payment Dates for such series of APS
during such Special Rate Period will be_______________________________________.
[Special Redemption Provisions, if any]
Attached hereto is a Preferred Shares Basic Maintenance Report
showing that, as of the third Business Day next preceding such proposed Special
Rate Period, S&P Eligible Assets (if S&P is rating such APS), Moody's Eligible
Assets (if Xxxxx'x is rating such APS) and Fitch Eligible Assets (if Fitch is
rating such APS) each have an aggregate Discounted Value at least equal to the
Preferred Shares Basic Maintenance Amount as of such Business Day (assuming for
purposes of the foregoing calculation that (i) the Maximum Rate is the Maximum
Rate on such Business Day as if such Business Day were the Auction Date for the
proposed Special Rate Period, and (ii) the S&P Discount Factors, Moody's
Discount Factors or Fitch Discount Factors applicable to S&P Eligible Assets,
Moody's Eligible Assets or Fitch Eligible Assets are determined by reference to
the first S&P Exposure Period,
E-1
Moody's Exposure Period or Fitch Exposure Period, whichever applicable, longer
than the corresponding S&P Exposure Period, Moody's Exposure Period or Fitch
Exposure Period then applicable to the Trust).
ING CLARION REAL ESTATE INCOME
FUND
______________________________
Dated: ________________, 20___
E-2
EXHIBIT F
ING CLARION REAL ESTATE INCOME FUND
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that ING Clarion Real Estate Income
Fund (the "Trust") has determined not to exercise its option to designate a
Special Rate Period of its Series________ APS and the next succeeding Rate
Period of such series will be a Minimum Rate Period of_______________Rate Period
Days.
ING CLARION REAL ESTATE INCOME
FUND
______________________________
Dated: ________________, 20___
F-1
EXHIBIT G
ING CLARION REAL ESTATE INCOME FUND
NOTICE OF CURE OF FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that ING Clarion Real Estate Income
Fund (the "Trust") has cured its Failure to Deposit and paid the applicable Late
Charge with respect to its Series_________APS. The dividend rate on the shares
of Series _____APS for the current Dividend Period is_________________________%
per annum, the Dividend Payment Date for the current Dividend Period is
scheduled to be ______________________, 20_____and the next Auction Date is
scheduled to be ______________________, 20___.
ING CLARION REAL ESTATE INCOME
FUND
______________________________
Dated: ________________, 20___
X-0
XXXXXXX X
XXX XXXXXXX XXXX XXXXXX INCOME FUND
NOTICE OF CURE OF FAILURE TO DEPOSIT ON INCOME
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that ING Clarion Real Estate Income
Fund (the "Trust") has cured its Failure to Deposit and paid the applicable Late
Charge with respect to its Series___________APS. The next Auction Date for the
Series ______APS is scheduled to be on________________________________, 20_____.
ING CLARION REAL ESTATE INCOME
FUND
______________________________
Dated: ________________, 20___
I-1
