Exhibit K4
BROKER-DEALER AGREEMENT
between
BANKERS TRUST COMPANY
and
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
Dated as of January 4, 1994
Relating to
AUCTION TERM PREFERRED STOCK
of
THE NEW AMERICA HIGH INCOME FUND, INC.
BROKER-DEALER AGREEMENT dated as of January 4, 1994 between BANKERS
TRUST COMPANY (the "Auction Agent"), a New York banking corporation (not in its
individual capacity but solely as agent of The New America High Income Fund,
Inc. (the "Fund") pursuant to authority granted it in the Auction Agent
agreement, and BEAR, ▇▇▇▇▇▇▇ & CO. INC. (together with its successors and
assigns, the "BD").
The Fund has issued two series of shares of Auction Term Preferred
Stock, par value $1.00 per share, liquidation preference $50,000 per share (the
"ATP") pursuant to its Articles of Incorporation, as amended, and the Articles
Supplementary (the "Articles Supplementary").
The Articles Supplementary will provide that, for each Dividend Period
of any series of ATP then outstanding, the Applicable Rate for such series for
such Dividend Period shall, under certain conditions, be the rate per annum that
a bank or trust company appointed by the Fund advises results from
implementation of the Auction Procedures for such series. The Board of Directors
has adopted a resolution appointing Bankers Trust Company as Auction Agent for
purposes of the Auction Procedures for each series of ATP.
The Auction Procedures contemplate the participation of one or more
Broker-Dealers for each series of ATP.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein the Auction Agent and BD agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to Articles Supplementary.
Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.
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) "Articles Supplementary" shall mean the Articles Supplementary
authorizing the issuance of ATP filed by the Fund with the Office of the
Secretary of the State of Maryland.
(b) "Auction" shall have the meaning specified in Section 2.1
hereof.
(c) "Auction Agent Agreement" shall mean the Auction Agent Agreement,
dated as of January 4, 1994, between the Fund and the Auction Agent relating
to the ATP.
(d) "Auction Procedures" shall mean the auction procedures constituting
Part II of the Articles Supplementary.
(e) "Authorized Officer" shall mean each Senior Vice President, Vice
President, Assistant Vice President, Trust Officer, Assistant Treasurer and
Assistant Secretary of the Auction Agent assigned to its Corporate Trust and
Agency Group and every other officer or employee of the Auction Agent designated
as an "Authorized Officer" for purposes of this Agreement in a communication to
the BD.
(f) "BD Officer" shall mean each officer or employee of BD designated
as a "BD Officer" for purposes of this Agreement in a communication to the
Auction Agent.
(g) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
(h) "Master Purchaser's Letter" shall mean a letter addressed to the
Fund, the Auction Agent, a Broker-Dealer and an Agent Member, substantially in
the form attached hereto as Exhibit A.
(i) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
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 the 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.
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2. The Auction.
2.1 Purposes: Incorporation by Reference or Auction Procedures and
Settlement Procedures.
(a) The provisions of the Auction Procedures will be followed by the
Auction Agent for the purposes of determining the Applicable Rate for any
Dividend Period of any series of ATP for which the Applicable Rate is to be
determined by an Auction. Each periodic operation 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.
(c) The BD is delivering herewith a Master Purchaser's Letter executed
by the BD and a list of Persons to whom the BD will initially sell the ATP, the
number of shares of ATP the BD will sell to each such Person and the number of
shares of ATP the BD will hold for its own account. The BD agrees to act as, and
assumes the obligations of, and limitations and restrictions placed upon, a
Broker-Dealer under this Agreement for each series of ATP. The BD understands
that other Persons meeting the requirements specified in the definition of
"Broker-Dealer" contained in the Auction Procedures may execute Broker-Dealer
Agreements and Master Purchaser's Letters and participate as Broker-Dealers in
Auctions.
2.2 Preparation of Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for the ATP, the
Auction Agent shall advise the Broker-Dealers for such series by telephone of
the Maximum Applicable Rate therefor and the AA Composite Commercial Paper
Rate(s) and the Treasury Index Rate(s), as the case may be, used in determining
such Maximum Applicable Rate.
(b) In the event that any Auction Date for the ATP shall be changed
after the Auction Agent has given the notice referred to in clause (vi) of
paragraph (a) of the Settlement Procedures, or after the notice referred to in
Section 2.5(a) hereof, if applicable, the Auction Agent, by such means as the
Auction Agent deems practicable, shall give notice of such change to the BD 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, the BD shall promptly notify customers of the BD
who the BD believes are Existing Holders of shares of ATP of such change in the
Auction Date.
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(c) the Auction Agent from time to time may request the Broker-Dealers
to provide the Auction Agent with a list of their respective customers that such
Broker-Dealers believe are Existing Holders of shares of ATP. BD shall comply
with any such request, and the Auction Agent shall keep confidential any such
information so provided by BD and shall not disclose any information so provided
by BD to any Person other than the Fund and BD.
(d) The Auction Agent is not required to accept the Master Purchaser's
Letter of any Potential Holder who wishes to submit an Order for the first time
in an Auction or of any Potential Holder or Existing Holder who wishes to amend
its Master Purchaser's Letter unless such letter or amendment is received by the
Auction Agent by 3:00 P.M. on the Business Day preceding such Auction.
2.3 Auction Schedule; Method of Submission of Orders.
(a) The Fund and the Auction Agent shall conduct Auctions for ATP in
accordance with the schedule set forth below. Such schedule may be changed by
the Auction Agent with the consent of the Fund, which consent shall not be
unreasonably withheld or delayed. 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 preceding the first Auction Date on which
such change shall be effective.
Time Event
By 9:30 A.M. Auction Agent advises Fund and
the Broker-Dealers of the Maximum
Applicable Rate and the AA Composite
Commercial Paper Rate(s) and the Treasury
Index Rate(s), as the case may be, used in
determining such Maximum Applicable Rate as
set forth in Section 2.2(a) hereof, with
respect to each series of ATP.
9:30 A.M.-1:00 P.M. Auction Agent assembles
information communicated to it by
Broker-Dealers as provided in Section 4(a)
of the Auction Procedures. Submission
Deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determination pursuant
to Section 5(a) of the Auction Procedures.
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By approximately 3:00 P.M. Auction Agent advises the Fund of
results of Auction as provided in
Section 5(b) of the Auction
Procedures. Submitted Orders are
accepted and rejected and shares
of ATP of the respective series
allocated as provided in
Section 6 of the Auction
Procedures. Auction Agent gives
notice of Auction results as set
forth in Section 2.4(a) hereof.
(b) BD agrees to maintain a list of Potential Holders and to contact
the Potential Holders on such list on or prior to each Auction Date for the
purposes set forth in the Auction Procedures. Until January 29, 1994, BD shall
deliver a Prospectus to each such Potential Holder, if required under the
Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder. After January 29, 1994, BD agrees, upon the request of a Potential
Holder, to delivery to such Potential Holder either (i) a Prospectus with such
legends or stamps regarding non-reliance by Potential Holders on certain
information therein (other than with respect to information concerning the ATP
and Settlement and Auction Procedures) as ▇▇ ▇▇▇▇▇ appropriate or (ii) the
Fund's summary description of the ATP and the Settlement Procedures and Auction
Procedures.
(c) BD agrees not to sell, assign or dispose of any shares of ATP to
any Person who has not delivered, or on whose behalf a Broker-Dealer has not
delivered, a signed Master Purchaser's Letter to the Auction Agent.
(d) BD shall submit Orders to the Auction Agent in writing
substantially in the form attached hereto as Exhibit C. BD shall submit a
separate Order to the Auction Agent for each Potential Holder or Existing Holder
on whose behalf BD is submitting an Order and shall not net or aggregate the
Orders of different Potential Holders or Existing Holders on whose behalf BD is
submitting Orders.
(e) BD shall deliver to the Auction Agent (i) a written notice in
substantially the form attached hereto as Exhibit D of transfers of shares of
ATP made through BD by an Existing Holder to another Person other than pursuant
to an Auction and shall deliver or cause to be delivered the related Master
Purchaser's Letter executed by such Person if such Person has not previously so
delivered a Master Purchaser's Letter and (ii) a written notice substantially in
the form attached hereto as Exhibit E, of the failure of any shares of ATP to be
transferred to or by any Person that purchased or
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sold shares of ATP through BD pursuant to an Auction. The Auction Agent is not
required to accept any such notice for an Auction unless it is received by the
Auction Agent by 3:00 P.M. on the Business Day preceding such Auction.
(f) BD has delivered to the Auction Agent its executed Master
Purchaser's Letter. BD and other Broker-Dealers which have delivered duly
executed Master Purchaser's Letters may submit Orders in Auctions for their own
accounts unless the Fund shall have notified BD and all other Broker-Dealers
that they may no longer do so, in which case Broker-Dealers may continue to
submit Hold Orders and Sell Orders for their own accounts.
(g) BD agrees to handle its customers' Orders in accordance with its
duties under applicable securities laws and rules.
2.4 Notices of Auction Results.
(a) On each Auction Date for ATP, the Auction Agent shall notify BD by
telephone of the results of the Auction as set forth in paragraph (a) of the
Settlement Procedures. As soon as reasonably practicable, the Auction Agent
shall confirm to BD in writing the disposition of all Orders submitted by BD in
such Auction if so requested by BD.
(b) BD shall notify each Existing Holder or Potential Holder on whose
behalf BD has submitted an Order as set forth in paragraph (a) of the Settlement
Procedures and take such other action as is required of BD pursuant to the
Settlement Procedures.
2.5 Designation of Alternate Term Period.
(a) If the Fund delivers to the Auction Agent a notice of the Auction
Date for any series of ATP for a Dividend Period thereof that next succeeds a
Dividend Period that is not a Standard Term Period in the form of Exhibit E to
the Auction Agent Agreement, the Auction Agent shall deliver such notice to BD
as promptly as practicable after its receipt of such notice from the Fund.
(b) If the Board of Directors proposes to designate any succeeding
Dividend Period of any series of ATP as an Alternate Term Period and the Fund
delivers to the Auction Agent a notice of such proposed Alternate Term Period in
the form of Exhibit F to the Auction Agent Agreement, the Auction Agent shall
deliver such notice to BD as promptly as practicable after its receipt of such
notice from the Fund.
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(c) If the Board of Directors determines to designate such succeeding
Dividend Period as an Alternate Term Period and the Fund delivers to the Auction
Agent a notice of such Period in the form of Exhibit G to the Auction Agent
Agreement not later than 3:00 P.M. on the second Business Day next preceding the
first day of such proposed Alternate Term Period, the Auction Agent shall
deliver such notice to BD not later than 3:00 P.M. on such Business Day.
(d) If the Fund shall deliver to the Auction Agent a notice not later
than 3:00 P.M. on the second Business Day next preceding the first day of any
Dividend Period stating that the fund has determined not to exercise its option
to designate such succeeding Dividend Period as an Alternate Term Period, in the
form of Exhibit H to the Auction Agent Agreement, or shall fail to timely
deliver either such notice or a notice in the form of Exhibit G to the Auction
Agent Agreement, the Auction Agent shall deliver a notice in the form of Exhibit
H to the Auction Agent Agreement to BD not later than 3:00 P.M. on such Business
Day.
2.6 Service Charge to be Paid to BD.
On the Business Day next succeeding each Auction Date for any series of
ATP, the Auction Agent shall pay to BD from moneys received from the Fund an
amount equal to (a) (i) in the case of any Auction Date for any series of ATP
immediately preceding a Dividend Period of such series consisting of less than
one year, 1/4 of 1%, or (ii) in the case of any Auction Date immediately
preceding a Dividend Period of such series consisting of one year or more, a
percentage agreed upon in writing by the Fund and the Broker-Dealers times (b) a
fraction, the numerator of which is the number of days in the Dividend Period
for such series beginning on such Business Day and the denominator of which is
365 if such Dividend Period is less than one year and 360 for all other Dividend
Periods for such series, times (c) $50,000 times (d) the aggregate number of
Outstanding shares of such series placed by BD in such Auction (for this purpose
shares will be deemed placed by BD if such shares were (i) the subject of Hold
Orders deemed to have been made by Existing Holders and were acquired by such
Existing Holders through BD or (ii) the subject of an Order submitted by BD that
is (A) a Submitted Order of an Existing Holder that resulted in such Existing
Holder continuing to hold such shares as a result of the Auction or (B) a
Submitted Order of a Potential Holder that resulted in such Potential Holder
purchasing such shares as a result of the Auction or (C) a Valid Hold Order;
provided that in the event an Auction scheduled to occur on an Auction Date
fails to occur for any reason while the ATP remains Outstanding, BD will be
entitled to service charges as if the Auction had occurred and all Holders of
shares placed by them submitted valid Hold Orders).
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For purposes of subclause (d)(i) of the foregoing paragraph, if any
Existing Holder who acquired shares of any series of ATP through BD transfers
those shares to another Person other than pursuant to an Auction, then such
Existing Holder shall be deemed to have acquired such shares through BD unless
the transfer was affected by or transferee is, a Broker-Dealer other than BD.
2.7 Settlement.
(a) If any Existing Holder on whose behalf the BD has submitted a
Hold/Sell Order that was accepted as a Sell Order or a Sell Order that was
accepted, in either case, in whole or in part, fails to instruct its Agent
Member to deliver the shares of ATP with respect to which such Order was
accepted against payment therefor, the BD shall instruct such Agent Member to
deliver such shares against payment therefor. If (i) any Existing Holder on
whose behalf a Broker Dealer other than the BD has submitted a Hold/Sell Order
that was accepted as a Sell Order or a Sell Order that was accepted, in either
case, in whole or in part, fails to instruct its Agent Member to so deliver the
shares of ATP with respect to which such Order was accepted against payment
therefore, (ii) such other Broker Dealer fails to instruct such Existing
Holder's Agent Member to deliver such shares and (iii) such Existing Holder is
identified to BD by the Auction Agent as provided in Section (a)(v) of the
Settlement Procedures as an Existing Holder from whom a Potential Holder on
whose behalf BD submitted a Buy Order is to purchase such shares, BD may deliver
to such Potential Holder a number of shares of ATP that is less than the number
of shares of ATP to be purchased by such Potential Holder by the number of
shares to be purchased from such Existing Holder. Notwithstanding, the foregoing
terms of this Section 2.7, any delivery or non-delivery of shares of ATP which
represents any departure from the results of an Auction for such series, 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 terms of Section 2.3(e)(ii) hereof. The Auction Agent shall
have no duty or liability with respect to enforcement of this Section 2.7.
(b) Neither the Auction Agent nor the Fund shall have any
responsibility or liability with respect to the failure of an Existing Holder, a
Potential Holder or its respective Agent Member to deliver shares of ATP of any
series or to pay for shares of ATP of any series sold or purchased pursuant to
the Auction Procedures or otherwise.
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3. The Auction Agent
3.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund hereunder
and owes no fiduciary duties to any other Person, other than the Fund, 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 or judgment made
in good faith unless the Auction Agent shall have been negligent in ascertaining
the pertinent facts.
3.2 Rights of the Auction Agent.
(a) The Auction Agent may 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 by this Agreement which the Auction Agent
believes in good faith to have been given by the Fund or by a Broker-Dealer. The
Auction Agent may record telephone communications with the Broker-Dealers.
(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.
(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.
3.3 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or
adequacy of this Agreement, the Auction Agent Agreement or the shares of ATP of
any series.
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4. Miscellaneous.
4.1 Termination.
Either party may terminate this Agreement at any time on five (5) days'
notice to the other party, provided that neither BD nor the Auction Agent may
terminate this Agreement without first obtaining prior written consent of the
Fund to such termination, which consent shall not be unreasonably withheld. This
Agreement shall automatically terminate upon the termination of the Auction
Agent Agreement.
4.2 Participant in Securities Depository; Payment of Dividends in
Same Day Funds.
(a) BD is, and shall remain for the term of this Agreement, a member
of, or participant in, the Securities Depository (or an affiliate of such a
member participant).
(b) BD represents that it (or if such BD does not act as Agent Member,
one of its affiliates) shall make all dividend payments on the ATP available in
same-day funds on each Dividend Payment Date, to the extent that such dividend
payments are timely paid by the Fund to customers that use such BD or affiliate
as Agent Member.
4.3 Communications.
Except as (i) communications authorized to be by telephone by this
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 addressed or telecopy number set forth below:
If to BD, Bear, ▇▇▇▇▇▇▇ & Co. Inc.
addressed: Preferred Stock Sales and Trading Desk
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Auction Bankers Trust Company
Agent, addressed: Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Auction Rate/Remarketed Securities
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopy number as such party may hereafter specify for
such purpose by notice to the other parties. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of BD by a BD Officer and on behalf of
the Auction Agent by an Authorized Officer. BD may record telephone
communications with the Auction Agent.
4.4 Entire Agreement.
This Agreement contains the entire agreement among the parties hereto
relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
among the parties hereto relating to the subject matter hereof. This Agreement
supersedes and terminates all prior Broker-Dealer Agreements between the
parties.
4.5 Benefits.
Nothing in this Agreement, express or implied, shall give to any
person, other than the Fund, the Auction Agent, BD and their respect successors
and assigns, any benefit of any legal or equitable right, remedy or claim
hereunder.
4.6 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 any party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by any other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
4.7 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 Auction Agent and BD. This Agreement
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may not be assigned by either party hereto absent the prior written consent of
the other party; provided, however, that this Agreement may be assigned by the
Auction Agent to a successor Auction Agent selected by the Fund without the
consent of BD.
4.8 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 thereof.
4.9 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.
4.10 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State.
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.
BANKERS TRUST COMPANY
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
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EXHIBIT A
FORM OF MASTER PURCHASER'S LETTER
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TO BE SUBMITTED TO YOUR BROKER-DEALER WHO WILL THEN
DELIVER COPIES ON YOUR BEHALF TO THE
AUCTION OR REMARKETING AGENT
MASTER PURCHASER'S LETTER
Relating to
Securities Involving Rate Settings
Through Auctions or Remarketings
THE COMPANY
A REMARKETING AGENT
THE AUCTION AGENT
A BROKER-DEALER
AN AGENT MEMBER
OTHER PERSONS
Dear Sirs:
1. This letter is designed to apply to publicly or privately offered
debt or equity securities ("Securities") of any issuer ("Company") which are
described in any final prospectus or other offering materials relating to such
Securities as the same may be amended or supplemented (collectively, with
respect to the particular Securities concerned, the "Prospectus") and which
involve periodic rate settings through auctions ("Auctions") or remarketing
procedures ("Remarketings"). This letter shall be for the benefit of any Company
and of any auction agent, paying agent (collectively, "auction agent"),
remarketing agent, broker-dealer, agent member, securities depository or other
interested person in connection with any Securities and related Auctions or
Remarketings (it being understood that such persons may be required to execute
specified agreements and nothing herein shall alter such requirements). The
terminology used herein is intended to be general in its application and not to
exclude any Securities in respect of which (in the Prospectus or otherwise)
alternative terminology is used.
2. We may from time to time offer to purchase, purchase, offer to sell
and/or sell Securities of any Company as described in the Prospectus relating
thereto. We agree that this letter shall apply to all such purchases, sales and
offers and to Securities owned by us. We understand that the dividend/interest
rate on Securities may be based from time to time on the results of Auctions or
Remarketings as set forth in the Prospectus.
3. We agree that any bid or sell order placed by us in an Auction or a
Remarketing shall constitute an irrevocable offer (except as otherwise described
in the Prospectus) by us to purchase or sell Securities subject to such bid or
sell order, or such lesser amount of Securities as we shall be required to sell
or purchase as a result of such Auction or Remarketing, at the applicable price,
all as set forth in the Prospectus, and that if we fail to place a bid or sell
order with respect to Securities owned by us with a broker-dealer on any Auction
or Remarketing Date, or a broker-dealer to which we communicate a bid or sell
order fails to submit such bid or sell order to the auction agent or remarketing
agent concerned, we shall be deemed to have placed a hold or a sell order with
respect to such Securities as described in the Prospectus. We authorize any
broker-dealer that submits a bid or sell order as our agent in Auctions or
Remarketings to execute contracts for the sale of Securities by such bid or sell
order. We recognize that the payment of such broker-dealer for Securities
purchased on our behalf shall not relieve us of any liability to such
broker-dealer for payment for such Securities.
4. We understand that in a Remarketing, the dividend or interest rate
or rates on the Securities and the allocation of Securities tendered for sale
between dividend or interest periods of different lengths will be based from
time to time on the determinations of one or more remarketing agent(s), and we
agree to be conclusively bound by such determinations. We further agree to the
payment of different dividend or interest rates to different holders of
Securities depending on the length of the dividend or interest period elected by
such holders. We agree that any notice given by us to a remarketing agent (or a
broker-dealer for transmission to a remarketing agent) of our desire to tender
Securities in a Remarketing shall constitute an irrevocable (except to the
limited extent set forth in the Prospectus) offer by us to sell the securities
specified in such Notice, or such lesser number of Securities as we shall be
required to sell as a result of such Remarketing, in accordance with the terms
set forth in the Prospectus, and we authorize the remarketing agent to sell,
transfer or
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otherwise dispose of such Securities as set forth in the Prospectus.
5. We agree that, during the applicable period as described in the
Prospectus, dispositions of Securities can be made only in the denominations set
forth in the Prospectus and we will sell, transfer or otherwise dispose of any
Securities held by us from time to time only pursuant to a bid or sell order
placed in an Auction, in a Remarketing, to or through a broker-dealer or, when
permitted in the Prospectus, to a person that has signed and delivered to the
applicable auction agent or a remarketing agent a letter substantially in the
form of this letter (or other applicable purchaser's letter), provided that in
the case of all transfers other than pursuant to Auctions or Remarketings we or
our broker-dealer or our agent member shall advise such auction agent or a
remarketing agent of such transfer. We understand that a restrictive legend will
be placed on certificates representing the Securities and stop-transfer
instructions will be issued to the transfer agent and/or registrar, all as set
forth in the Prospectus.
6. We agree that, during the applicable period as described in the
Prospectus, ownership of Securities shall be represented by one or more global
certificates registered in the name of the applicable securities depository or
its nominee, that we will not be entitled to receive any certificate
representing the Securities and that our ownership of any Securities will be
maintained in book-entry form by the securities depository for the account of
our agent member, which in turn will maintain records of our beneficial
ownership. We authorize and instruct our agent member to disclose to the
applicable auction agent or remarketing agent such information concerning our
beneficial ownership of Securities as such auction agent or remarketing agent
shall request.
35
7. We acknowledge that partial deliveries of Securities purchased in
Auctions or Remarketings may be made to us and such deliveries shall constitute
good delivery as set forth in the Prospectus.
8. This letter is not a commitment by us to purchase any
Securities.
9. This letter supersedes any prior-dated version of this master
purchaser's letter, and supplements any prior to post-dated purchaser's letter
specific to any particular Securities, and this letter may only be revoked by a
signed writing delivered to the original recipients hereof.
10. The descriptions of Auction or Remarketing procedures set forth in
each applicable Prospectus are incorporated by reference herein and in case of
any conflict between this letter, any purchaser's letter specific to particular
Securities and any such description, such description shall control.
11. Any xerographic or other copy of this letter shall be deemed
of equal effect as a signed original.
12. Our agent member of The Depository Trust company currently is
13. Our personnel authorized to placed orders with broker-dealers
for the purposes set forth in the Prospectus in Auctions or Remarketings
currently is/are , telephone number ( ) .
14. Our taxpayer identification number is .
15. In the case of each offer to purchase, purchase, offer to sell or
sale by us of Securities not registered under the Securities Act of 1933, as
amended (the "Act"), we represent and agree as follows:
(A) We understand and expressly acknowledge that the Securities have
not been and will not be registered under the Act and, accordingly, that the
Securities may not be reoffered, resold or otherwise pledged, hypothecated or
transferred unless an applicable exemption from the registration requirements of
the Act is available.
(B) We hereby confirm that any purchase of Securities made by us will
be for our own account, or for the account of one or more parties for which we
are acting as trustee or agent with complete investment discretion and with
authority to bind such parties, and not with a view to any public resale or
distribution thereof. We and each other party for which we are acting which will
acquire Securities will be "accredited investors" within the meaning of
Regulation D under the Act with respect to the Securities to be purchased by us
or such party, as the case may be, will have previously invested in similar
types of instruments and will be able and prepared to bear the economic risk of
investing in and holding such Securities.
(C) We acknowledge that prior to purchasing any Securities we shall
have received a Prospectus (or private placement memorandum) with respect
thereto and acknowledge that we will have had access to such financial and other
information, and have been afforded the opportunity to ask such questions or
representatives of the Company and receive answers thereto, as we deem necessary
in connection with our decision to purchase Securities.
(D) We recognize that the Company and broker-dealers will rely upon the
truth and accuracy of the foregoing investment representations and agreements,
and we agree that each of our purchases of Securities now or in the future shall
be deemed to constitute our concurrence in all of the foregoing which shall be
binding on us and each party for which we are acting as set forth in
Subparagraph B above.
Dated:__________________________ _______________________________
(Name of Purchaser)
Mailing Address of Purchaser
_______________________________ By:____________________________
Printed Name:
_______________________________ Title:
_______________________________
36
EXHIBIT B
SETTLEMENT PROCEDURES
14
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth the
procedures expected to be followed in connection with the settlement of each
Auction and will be incorporated by reference in the Auction Agent Agreement and
each Broker-Dealer Agreement. Nothing contained herein constitutes a
representation by the Fund that in each Auction each party referred to herein
will actually perform the procedures described herein to be performed by such
party. Capitalized terms used herein shall have the respective meanings
specified in the forepart of this Prospectus or herein, as the case may be.
(a) On each Auction Date for any series of ATP, the Auction Agent shall
notify by telephone or telecopy the Broker-Dealers that participated in the
Auction held for such series on such Auction Date and submitted an Order on
behalf of any Existing Holder or Potential Holder of:
(i) the Applicable Rate fixed for the subsequent Dividend Period
and the Dividend Payment Date therefor;
(ii) whether Sufficient Clearing Orders existed for the
determination of the Applicable Rate;
(iii) if such Broker-Dealer submitted a Hold/Sell Order or a Sell
Order for such series on behalf of an Existing Holder, whether such
Hold/Sell Order or Sell Order was accepted or rejected, in whole or in
part, and the number of shares, if any, of such series of ATP then
outstanding to be sold by such Existing Holder;
(iv) if such Broker-Dealer submitted a Buy Order on behalf of a
Potential Holder, whether such Buy Order was accepted or rejected, in
whole or in part, and the number of shares, if any, of such series of
ATP to be purchased by such Potential Holder;
(v) if the aggregate number of shares of such series of ATP to be
sold by all Existing Holders on whose behalf such Broker-Dealer
submitted Hold/Sell Orders or Sell Orders for such series is different
than the aggregate number of shares of such series of ATP to be
purchased by all Potential Holders on whose behalf such Broker-Dealer
submitted Buy Orders, the name or names of one or more other
Broker-Dealers (and the name of the Agent Member, if any, of each such
other Broker-Dealer) and the number of shares of such series of ATP to
be (x) purchased from one or more Existing Holders on whose behalf
such other Broker-Dealer submitted Hold/Sell Orders or Sell Orders for
such series, or (y) sold to one or more Potential Holders on whose
behalf such other Broker-Dealers submitted Buy Orders for such series;
and
(vi) the scheduled Auction Date of the next succeeding Auction
with respect to such series of ATP.
(b) On each Auction Date for any series of ATP, each Broker-Dealer that
submitted an Order for such series on behalf of any Existing Holder or Potential
Holder shall:
(i) as soon as practicable, advise each Existing Holder and
Potential Holder on whose behalf such Broker-Dealer submitted a Buy
Order, Hold/Sell Order or Sell Order for such series whether such Buy
Order, Hold/Sell Order or Sell Order was accepted or rejected, in
whole or in part;
(ii) instruct each Potential Holder on whose behalf such Broker-
Dealer submitted a Buy Order for such series that was accepted, in
whole or in part, to instruct such Potential Holder'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 shares of
such series of ATP to be purchased pursuant to such Buy Order against
receipt of such shares;
(iii) instruct each Existing Holder on whose behalf such Broker-
Dealer submitted a Hold/Sell Order for such series that was accepted,
in whole or in part, as a Sell Order or a Sell Order for such series
that was accepted, in whole or in part, to instruct such Existing
Holder's Agent Member to deliver to such Broker-Dealer (or its Agent
Member) through the Securities Depository the number of shares of such
series of ATP to be sold pursuant to such Order against payment
therefor;
(iv) advise each Existing Holder on whose behalf such Broker-
Dealer submitted an Order for such series that will continue to hold
shares of ATP of such series and each Potential Holder on whose behalf
such Broker-Dealer submitted a Buy Order for such series that was
accepted, in whole or in part, of the Applicable Rate for such series
for the next succeeding Dividend Period for such series;
(v) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order for such series of the Auction Date
of the next succeeding Auction for such series; and
(vi) advise each Potential Holder on whose behalf such Broker-
Dealer submitted a Buy Order for such series that was accepted, in
whole or in part, of the Auction Date of the next succeeding Auction
for such series.
(c) On the basis of the information provided to it pursuant to (a)
above, each Broker-Dealer that submitted a Buy Order, a Hold/Sell Order or a
Sell Order for any series of ATP shall allocate any funds received by it in
respect of such series pursuant to (b)(ii) above, and any shares of such series
of ATP received by it pursuant to (b)(iii) above, among the Potential Holders,
if any, on whose behalf such Broker-Dealer submitted Buy Orders for such series,
the Existing Holders, if any, on whose behalf such Broker-Dealer submitted Buy
Orders, Hold/Sell Orders or Sell Orders for such series, and any Broker-Dealers
identified to it by the Auction Agent pursuant to (a)(v) above.
2
(d) On the Business Day after the Auction Date, the Securities
Depository shall execute the transactions described above, debiting and
crediting the accounts of the respective Agent Members as necessary to effect
the purchases and sales of shares of any series of ATP as determined in the
Auction for such series.
33716.c1
3
EXHIBIT C
(Submit only one Order on this Order Form)
THE NEW AMERICA HIGH INCOME FUND, INC.
AUCTION TERM PREFERRED STOCK, SERIES [A] [B] ("ATP")
ORDER FORM
To:_______________________ Date of Auction
_______________________
_______________________
New York, New York_____
Attention: ____________
The undersigned Broker-Dealer submits the following Order on behalf of
the Person listed below:
Name of Person placing Order ("Bidder"):_________________________
Bidder places the Order listed below covering the number of shares indicated
(complete only one blank):
__________________ shares now held by Bidder (an Existing Holder),
and the Order is a (check one):
_______ Hold Order; or
_______ Hold/Sell Order at a rate of ______%; or
_______ Sell Order;
-or-
_______ shares not now held by Bidder (a Potential Holder), and the
Order is a Buy Order at a rate of _____%.
Notes:
(1) If submitting more than one Order for one Bidder, use additional Order
forms.
(2) If one or more Orders covering in the aggregate more than the number
of outstanding shares of ATP held by any Existing Holder are
submitted, such Orders shall be considered valid in the order of
priority set forth in the Auction Procedures.
15
(3) A Hold Order may be placed only by an Existing Holder covering a
number of shares of ATP not greater than the number of shares of ATP
currently held by such Existing Holder.
(4) Potential Holders may make only Buy Orders, each of which must specify
a rate. If more than one Buy Order is submitted on behalf of any
Potential Holder, each Buy Order submitted shall be a separate Buy
Order with the rate specified.
(5) Orders may contain no more than three figures to the right of the
decimal point (.001 of 1%).
Name of Broker-Dealer:
By: ____________________________
16
EXHIBIT D
(To be used only for transfers made
other than pursuant to an Auction)
THE NEW AMERICA HIGH INCOME FUND, INC.
AUCTION TERM PREFERRED STOCK, SERIES [A] [B] ("ATP")
TRANSFER FORM
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 Existing Holder has transferred ____
shares of the above series of ATP to __________________________.
------------------------------
(Name of Existing Holder)
------------------------------
(Name of Broker-Dealer)
------------------------------
(Name of Agent Member)
By:___________________________
Printed Name:
Title:
17
EXHIBIT E
(To be used only for failures to
deliver shares of Auction Term Preferred
Stock sold pursuant to an Auction)
THE NEW AMERICA HIGH INCOME FUND, INC.
AUCTION TERM PREFERRED STOCK, SERIES [A] [B] ("ATP")
NOTICE OF A FAILURE TO DELIVER
Complete either I or II
I. We are a Broker-Dealer for _____________ (the "Purchaser"), which
purchased ___ shares of the above series of ATP in the Auction held on
____________________ from the seller of such shares. We hereby notify you that
the Seller failed to deliver such shares of Auction Term Preferred Stock to the
Purchaser.
II. We are a Broker-Dealer for __________________ (the "Seller"), which
sold ___ shares of the above series of ATP in the Auction held on _____ to the
purchaser of such shares. We hereby notify you that the Purchaser failed to make
payment to the Seller upon delivery of such shares of Auction Term Preferred
Stock.
Name: _________________________
(Name of Broker-Dealer)
By: ___________________________
Printed Name:
Title:
DP-4196/d
18
