EXHIBIT (k)(iv)
AUCTION AGENCY AGREEMENT BETWEEN THE FUND AND BANKERS TRUST COMPANY NOW
KNOWN AS DEUTSCHE BANK AMERICAS TRUST COMPANY
BOULDER TOTAL RETURN FUND, INC.
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AUCTION AGENCY AGREEMENT
Dated as of August 3, 2000
Relating to
Auction Market Preferred Stock
of
Boulder Total Return Fund, Inc.
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BANKERS TRUST COMPANY,
As Auction Agent
AUCTION AGENCY AGREEMENT, dated as of August 3, 2000 between BOULDER
TOTAL RETURN FUND, INC., a Maryland corporation (the "Company") and BANKERS
TRUST COMPANY, a New York banking corporation (the "Auction Agent").
WHEREAS. the Company proposes to offer, issue and sell shares
of Auction Market Preferred Stock ("AMPS") pursuant to its Articles of
Incorporation as amended by the Articles Supplementary (as defined below). The
Company desires that the Auction Agent perform certain duties in connection with
the AMPS upon the terms and subject to the conditions of this Agreement, and
hereby appoints the Auction Agent to act in the capacities set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Company and the Auction Agent agree as follows:
1) Definitions and Rules of Construction.
a) Terms Defined by Reference to Articles Supplementary. Capitalized
terms not defined herein shall have the respective meanings as
specified in Parts I and II of the Articles Supplementary.
b) Terms Defined Herein. As used in the herein and in the Settlement
Procedures, the following terms shall have the following meanings,
unless the context otherwise requires:
i) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository that will act on behalf
of a Bidder.
ii) "AMPS" shall mean the preferred stock, par value $.01 per share,
of the Company designated as its Auction Market Preferred Stock.
iii) "Articles Supplementary" shall mean the Articles Supplementary
Creating and Fixing the Rights of Taxable Auction Market
Preferred Securities filed by the Company in the office of the
State Department of Assessments and Taxation of the State of
Maryland, substantially in the form attached hereto as Exhibit A.
iv) "Auction" shall have the meaning specified in Section. 2(a)
hereof.
v) "Auction Procedure" shall mean the auction procedures
constituting Part II of the Articles Supplementary as of the
filing thereof.
vi) "Authorized Officer" shall mean each Senior Vice President, Vice
President, Assistant Vice President, Trust Officer and Assistant
Manager of the Auction Agent assigned to its Corporate Trust &
Agency Services and every other officer or employee of the
Auction Agent designated as an Authorized Officer for purposes
hereof in a communication to the Company.
vii) "Broker-Dealer Agreement" shall mean each agreement among the
Company, the Auction Agent and a Broker-Dealer substantially in
the form attached hereto as Exhibit B.
viii)"Company Officer" shall mean the Chairman of the Board of
Directors, each Vice Chairman of the Board of Directors (whether
or not designated by a number or word or words added before or
after the title "Vice Chairman of the Board of Directors"), the
President, each Vice President (whether or not designated by a
number or word or words added before or after the title "Vice
President"), the Secretary, the Treasurer, each Assistant
Secretary and Assistant Treasurer of the Company and any other
officer or employee of the Company designated as a "Company
Officer" for purposes hereof in a notice to the Auction Agent.
ix) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit C.
c) 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:
i) Words importing the singular number shall include the plural
number and vice versa.
ii) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor
shall they affect its meaning, construction or effect.
iii) The words "hereof", "herein", "hereto" and other words of similar
import refer to this Agreement as a whole.
iv) All references herein to a particular time of day shall be to New
York City time.
2) The Auction.
a) Purpose; Incorporation by Reference of Auction Procedures and Settlement
Procedures.
i) The Articles Supplementary provide that the Applicable Rate for
AMPS for each Subsequent Rate Period thereof shall, except under
certain conditions, be the rate per annum that a bank or trust
company appointed by the Company advises results from
implementation of the Auction Procedures for AMPS. The Board of
Directors has adopted a resolution appointing Bankers Trust
Company as Auction Agent for purposes of the Auction Procedures
for AMPS. The Auction Agent accepts such appointment and agrees
to follow the procedures set forth in this Section 2 and the
Auction Procedures for the purpose of determining the Applicable
Rate for MMP for each Subsequent Rate Period thereof for which
the Applicable Rate is to be determined by an Auction. Each
periodic implementation of such procedure is hereinafter referred
to as an "Auction".
ii) 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.
b) Preparation for Each Auction; Maintenance of Registry of Beneficial
Owners.
i) Not later than the Date of Original Issue, the Company shall
provide the Auction Agent with a list of the Broker-Dealers, and
a manually signed copy of the Broker-Dealer Agreement. Not later
than seven days prior to any Auction Date for AMPS for which any
change in such list of Broker-Dealers is to be effective, the
Company 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
manually signed by such Broker-Dealer; provided, however, if the
Company proposed to designate any Special Rate Period of AMPS
pursuant to Section 4 of Part 1 of the Articles Supplementary,
not later than 11:00 A.M. on the Business Day before the Auction
next preceding the first day of such Rate Period of by such later
time or date, or both, as may be agreed to by the Auction Agent,
the Company shall provide the Auction Agent with a list of
Broker-Dealers 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. The
Auction Agent and the Company shall have entered into a
Broker-Dealer Agreement with each Broker-Dealer prior to the
participation of any such Broker-Dealer in any Auction.
ii) In the event that any Auction Date shall be changed after the
Auction Agent shall have given the notice referred to in clause
(iv) of paragraph (a) of the Settlement Procedures, or after the
notice referred to in Section 2(e)(i) 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 not later than the earlier of 9:15 A.M. on the new
Auction Date and 9:15 A.M. on the old Auction Date.
iii)
(1) The Auction Agent shall maintain a registry of the
Beneficial Owners of the shares of AMPS, who shall
constitute Existing Holders of shares for purposes of
Auction 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 shares of AMPS. The Auction
Agent shall keep such registry current and accurate. The
Company shall provide or cause to be provided to the Auction
Agent at or prior to the Date of Original Issue a list of
the initial Existing Holders of the shares of AMPS, the
number of shares purchased by each such Existing Holder and
the respective Broker-Dealer of 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 shares of AMPS (A) such list, (B) the results of
Auctions and (C) notices from any Broker-Dealer as described
in the first sentence of this Section.
(2) In the event of any partial redemption of AMPS, the Auction
Agent shall, at least two Business Days prior to the next
auction for AMPS, 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 shares of AMPS such Broker-Dealer
believes are owned by such Person after such redemption. In
the absence of receiving any such information from any
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 shares of AMPS shown in
such registry.
(3) The Auction Agent shall be required to register a transfer
of shares of AMPS from an Existing Holder of shares of AMPS
only if such transfer is made to another Existing Holder, or
other Person if permitted by the Company, and only if such
transfer is made (A) pursuant to an Auction or (B) the
Auction Agent has been notified in writing (i) in a notice
substantially in the form of Exhibit D to the Broker-Dealer
Agreements by a Broker-Dealer of such transfer or (ii) in a
notice substantially in the form of Exhibit E to the
Broker-Dealer Agreements by the Broker-Dealer of any
Existing Holder, or other Person if permitted by the
Company, that purchased or sold such shares of AMPS in an
Auction of the failure of such shares of AMPS to be
transferred as a result of such 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.
iv) The Auction Agent may 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 AMPS 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 shares of AMPS to any
Person other than the Company and the Broker-Dealer that provided
such information; and such information shall not be used by the
Auction Agent or its officers, employees, agents or
representatives for any purpose other than such purposes as are
described herein. The Auction Agent shall transmit any list of
customers that Broker-Dealers believe are Existing Holders of
AMPS and information related thereto only to its officers,
employees, agents or representatives who need to know such
information for purposes of acting in accordance with this
Agreement and shall use its reasonable efforts to prevent
transmission of such information to others and shall cause its
officers, employees, agents and representatives to abide by the
foregoing confidentiality restrictions; provided, however, that
the Auction Agent shall have no responsibility or liability for
the actions of any of its officers, employees, agents or
representatives after they have left the employ of the Auction
Agent.
c) Information Concerning Rates.
i) The Rate Multiple on the date of this Agreement for AMPS is 150%.
If there is any change in credit rating of AMPS, currently rated
"AA" by S&P and "aa1" by Moody's (or any substitute or successor
rating agency) referred to in the definition of "Rate Multiple"
resulting in any change in the Rate Multiple for AMPS after the
date of this Agreement, the Company shall notify the Auction
Agent in writing of such change in the Rate Multiple prior to
9:00 A.M. on the Auction Date succeeding such change. In
determining the Maximum Rate for AMPS on any Auction Date as set
forth in Section 2(c)(ii)(1) hereof, the Auction Agent shall be
entitled to rely on the last Rate Multiple of AMPS of which is
has most recently received notice from the Company (or, in the
absence of such notice, the percentage set forth in the first
sentence of this paragraph (i)), except that if the Company shall
have notified the Auction Agent of a Rate Multiple to be in
effect for an Auction Date in accordance with the preceding
sentence, the Rate Multiple in effect for the next succeeding
Auction Date shall be, unless the Company notified the Auction
Agent of a change in the Rate Multiple for such succeeding
Auction Date pursuant to this Section 2(c)(i), the Rate Multiple
that was in effect on the first preceding Auction Date for AMPS
with respect to which the dividend, the rate for which was fixed
on such Auction Date, did not include any amount ineligible for
the Dividends Received Deduction.
ii)
(1) On each Auction Date for AMPS, the Auction Agent shall
determine the Maximum Rate. The Maximum Rate for AMPS on any
Auction Date shall be:
(a) In the case of any Auction Date which is not the Auction
Date immediately prior to the first day of any proposed
Special Rate Period designated by the Company pursuant to
Section 4 of the Part I of the Articles Supplementary, the
product of (a) the "AA" Composite Commercial Paper Rate on
such Auction Date for the next Rate Period of AMPS and (b)
the Rate Multiple (equal to 150% as long as the AMPS have a
minimum rating of AA-/aa3) on such Auction Date, unless the
AMPS has or had a Special Rate Period and an Auction at
which Sufficient Clearing Bids existed has not yet occurred
for a Minimum Rate Period of AMPS after such Special Rate
Period, in which case the higher of:
1. The dividend rate on shares of AMPS for the
then-ending Rate Period, and
2. The product of (x) the higher of (i) the "AA"
Composite Commercial Paper Rate on such Auction Date for the
then-ending Rate Period of AMPS, if such Rate Period
consists of less than four Dividend Periods, or the Treasury
Rate on such Auction Date for such Rate Period, if such Rate
Period consists of more than four Dividend Periods, and (ii)
the "AA" Composite Commercial Paper Rate on such Auction
Date for such Special Rate Period of AMPS, if such Special
Rate Period consists of less than four Dividend Periods, or
the Treasury Rate on such Auction Date for such Special Rate
Period, if such Special Rate Period consists of four or more
Dividend Periods and (y) the Rate Multiple on such Auction
Date; or
(b) in the case of any Auction Date which is the Auction Date
immediately prior to the first day of any proposed Special
Rate Period designated by the Company pursuant to Section 4
of Part I of the Articles Supplementary, the product of (a)
the highest of (x) the "AA" Composite Commercial Paper Rate
on such Auction Date for the then-ending Rate Period of
AMPS, if such Rate Period consists of less than four
Dividend Periods, or the Treasury Rate on such Auction Date
for such Rate Period, if such Rate Period consists of four
or more Dividend Periods, (y) the "AA" Composite Commercial
Paper Rate on such Auction Date for the Special Rate Period
for which the Auction is being held if such Special Rate
Period consists of less than four Dividend Periods or the
Treasury Rate on such Auction Date for the Special Rate
Period for which the Auction is being held if such Special
Rate Period consists of four or more Dividend Periods, and
(z) the "AA" Composite Commercial Paper Rate on such Auction
Date for Minimum Rate Periods and (b) the Rate Multiple on
such Auction Date.
1. Not later than 9:30 A.M. on each Auction Date, the
Auction Agent shall notify the Company and the
Broker-Dealers of the Maximum Rate so determined and the
"AA" Composite Commercial Paper Rate(s) and Treasury
Rate(s), as the case may be, used to make such
determination.
2. From and after a Failure to Deposit by the Company
during any Rate Period of AMPS, until such failure is cured
and a Late Charge (as defined in Section 2(f)(i)(2)) is
paid, in accordance with Section 2(c)(i) of Part I of the
Articles Supplementary, on the first day of each Rate Period
of AMPS the Auction Agent shall determine the Treasury Rate
for such Rate Period if such Rate Period consists of four or
more Dividend Periods and the "AA" Composite Commercial
Paper Rate for such Rate Period if such Rate Period consists
of less than four Dividend Periods. Not later than 9:30 A.M.
on each such first day, the Auction Agent shall notify the
Company of the applicable "AA" Composite Commercial Paper
Rate and Treasury Rate.
3. If any "AA" Composite Commercial Paper Rate or Treasury
Rate, as the case may be, is not quoted on an interest
basis, the Auction Agent shall convert the quoted rate to
the interest equivalent thereof as set forth in the
definition of such rate in the Articles Supplementary 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 discount basis the Auction Agent shall convert
the quoted rate to an interest rate after consultation with
the Company as to the method of such conversion.
4. 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 determination of such "AA" Composite
Commercial Paper Rate, the Auction Agent shall immediately
notify the Company so that the Company 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 Company shall promptly
advise the Auction Agent of any such selection.
5. If any Treasury Rate is to be based on rates supplied by
U.S. Government Securities Dealers and one or more U.S.
Government Securities Dealers shall not provide a quotation
for the determination of such Treasury Rate, the Auction
Agent shall immediately notify the Company so that the
Company 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 Company shall
promptly adviser the Auction Agent of any such selection.
d) 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 Company, 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 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
Company and Broker-Dealers of the
applicable Maximum rate and the "AA"
Composite Commercial Paper Rate(s)
and Treasury Rate(s), as the case
may be, used in determining such
Maximum rate as set forth Section
2(c)(ii) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information communicated to it by Broker-Dealers as provided in
Section (iii)A of the Auction Procedures. Submission deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations pursuant to Section 4(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Company of results of Auction as provided in Section 4(b) of the
Auction Procedures
Submitted Bids and Submitted Sell
Orders are accepted and rejected and
shares of AMPS allocated as provided
in Section 5 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 as set forth in
paragraph (a) of the Settlement Procedures.
e) Designation of Special Rate Period.
i) The Articles Supplementary provide that, subject to the Company's
option to designate a Special Rate Period as preferred to in
paragraph (ii) of this Section 2(e), each Rate Period of AMPS
will be a Minimum Rate Period (a duration of 28 days, subject to
certain exceptions). Not less than 10 nor more than 20 days prior
to the last day of any such Rate Period that is not a Minimum
Rate Period, (i) the Company shall deliver to the Auction Agent a
notice of the Auction Date of the next succeeding Auction for
AMPS in the form of Exhibit D hereto and (ii) the Auction Agent
shall deliver such notice by first-class mail, postage prepaid,
to each Existing Holder of shares of AMPS at the address set
forth for such Existing Holder in the records of the Auction
Agent and to the Broker-Dealers for AMPS as promptly as
practicable after its receipts of such notice from the Company.
ii) Pursuant to the Articles Supplementary, the Company may, at its
option, designate a Special Rate Period for AMPS in the manner
described in Section 4 of Part I of the Articles Supplementary.
(1) If the Board of Directors proposes to designate any succeeding
Subsequent Rate Period of AMPS as a Special Rate Period, (A) the
Company shall deliver to the Auction Agent a notice of such
proposed Special Rate Period in the form of Exhibit E 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 Company shall deliver such notice by first-class mail,
postage prepaid, to each Existing Holder of shares of AMPS at the
address set forth for such Existing Holder in the records of the
Auction Agent and to the Broker-Dealers for AMPS as practicable
after its receipt of such notice from the Company.
(2) If the Board of Directors determines to designate such succeeding
Subsequent Rate Period as a Special Rate Period, (A) the Company
shall deliver to the Auction Agent a notice of such determination
in the form of Exhibit F hereto not later than 11:00 A.M. on the
second Business Day next preceding the first day of such proposed
Special Rate Period (or such later time or date, or both, as may
be agreed to by the Auction Agent), and (B) the Auction Agent
shall deliver such notice to the Broker-Dealers for AMPS not
later than 3:00 P.M. on such second Business Day (or, if the
Auction Agent has agreed to a later time or date, as promptly as
practicable thereafter).
(3) If the Company shall deliver to the Auction Agent a notice
stating that the Company has determined not to exercise its
option to designate such succeeding Subsequent Rate Period as a
Special Rate Period with respect to which it has delivered a
notice 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 (or such later time or date, or
both, as may be agreed to by the Auction Agent), or shall fail to
timely deliver either such notice or a notice in the form of
Exhibit F hereto, the Auction Agent shall deliver a notice in the
form of Exhibit G hereto to the Broker-Dealers for AMPS not later
than 3:00 P.M. on such second Business Day (or, if the Auction
Agent has agreed to a later time or date, as promptly as
practicable thereafter).
Such change in the length of any Rate Period shall not occur if, among other
things, (a) on the Auction Date next preceding the first day of such Rate Period
Sufficient Clearing Bids shall not exist or (b) a Failure to Deposit shall have
occurred prior to such change with respect to shares of AMPS which shall not
have been timely cured or the Late Charge shall not have been paid, in each case
in accordance with the Articles Supplementary.
f) Failure to Deposit.
i If:
(1) Any Failure to Deposit shall have occurred with respect to shares
of AMPS during any Rate Period thereof (other than any Special
Rate Period consisting of four or more dividend periods or any
Rate Period succeeding any Special Rate Period consisting of four
or more dividend periods during which a Failure to Deposit
occurred that has not been cured); and
(2) prior to 12:00 Noon on the third Business Day next succeeding the date
on which such Failure to Deposit occurred, such Failure to Deposit
shall have been cured in accordance with the next succeeding sentence
and the Company shall have paid to the Auction Agent a late charge (a
"Late Charge") equal to the sum of (A) if such Failure to Deposit
consisted of the failure to pay timely to the Auction Agent the full
amount of dividends with respect to any Dividend Period on the shares
of AMPS, an amount computed by multiplying (1) 225% of the "AA"
Composite Commercial Paper Rate for the Rate Period during which such
Failure to Deposit occurs on the Dividend Date for such Dividend
Period by (2) 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 the next succeeding sentence (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 shares of AMPS and (B) if such Failure
to Deposit consisted of the failure to pay timely to the Auction Agent
the cash Redemption Price of the shares of AMPS, if any, for which
Notice of Redemption has been given by the Company pursuant to Section
3(b) of Part I of the Articles Supplementary, an amount computed by
multiplying (x) 225% of the "AA" Composite Commercial Paper 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 the next succeeding sentence (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 shares of AMPS to be redeemed,
then the Auction Agent shall deliver a notice in the form of Exhibit H
hereto by first-class mail, postage prepaid to the Broker-Dealers for AMPS
not later than one Business Day after its receipt from the Company of the
payment curing such Failure to Deposit and the payment of such Late Charge.
A Failure to Deposit with respect to AMPS shall have been cured (if such
Failure to Deposit is not solely due to the willful failure of the Company
to make the required payment to the Auction Agent) with respect to any Rate
Period thereof if, not later than 12:00 Noon on the fourth Business Day
preceding any Auction Date therefore the Company shall have paid to the
Auction Agent (A) all accumulated and unpaid dividends on the shares of
AMPS and (B) without duplication, the Redemption Price for the shares of
AMPS, if any, for which Notice of Redemption has been given by the Company
pursuant to Section 3(b) of Part I of the Articles Supplementary.
ii If:
(1) Any Failure to Deposit shall have occurred with respect to shares
of AMPS during a Rate Period thereof (other than any Special Rate
Period consisting of four or more Dividend Periods or any Rate
Period succeeding any Special Rate Period consisting of four or
more Dividend Periods during which a Failure to Deposit occurred
that has not been cured), and, prior to 12:00 Noon 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 within the meaning of the last sentence of Section 2.6(a)
hereof and the Company shall have paid the applicable Late Charge
to the Auction Agent, but such Failure to Deposit shall
subsequently be so cured and the Company shall have paid the
applicable Late Charge; or
(2) Any Failure to Deposit shall have occurred with respect to shares
of AMPS during a Special Rate Period consisting of four or more
Dividend Periods, or during any Rate Period succeeding any
Special Rate Period consisting of four or more Dividend Periods
during which a Failure to Deposit occurred that has not been
cured, and such Failure to Deposit shall subsequently have been
cured within the meaning of the last sentence of Section 2(f)(i)
hereof and the Company shall have paid the applicable Late
Charge,
then the Auction Agent shall deliver a notice in the form of Exhibit I
hereto to the Broker-Dealers for AMPS not later than one Business Day
after the receipt from the Company of the payment curing such Failure
to Deposit and the payment of such Late Charge.
g) Broker-Dealers.
i Not later than 12:00 Noon on each Dividend Payment Date for AMPS,
the Company shall pay to the Auction Agent an amount in cash
equal to the aggregate fees payable to the Broker-Dealers for
AMPS pursuant to Section 2.8 of the Broker-Dealer Agreements for
AMPS. The Auction Agent shall advise the Company of the amount
referred to in the preceding sentence in respect of such Auction
not later than 4:00 P.M. on the Business Day preceding such
Dividend Payment Date. The Auction Agent shall apply such moneys
as set forth in Section 2.8 of each such Broker-Dealer Agreement.
To the extent that moneys are not payable to a Broker-Dealer
because Sufficient Clearing Bids did not exist in the relevant
Auction and the AMPS therefore continue to be held despite being
subject to a Submitted Sell Order, the Auction Agent shall repay
such money to the Company.
ii The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Company provided that at
least one Broker-Dealer Agreement would be in effect after such
termination.
iii The Auction Agent shall from time to time enter into such
Broker-Dealer Agreements with one or more Broker-Dealers as the
Company shall request, and shall enter into such schedules to any
such Broker-Dealer Agreements as the Company shall request.
iv The Auction Agent shall maintain and update from time to time a
list of Broker-Dealers .
h) Ownership of Shares of AMPS. The Company shall notify the Auction
Agent if the Company or any affiliate (as such term is defined in the
Investment Company Act of 1940, as amended) acquires any shares of
AMPS. Neither the Company nor any affiliate of the Company shall
submit any Order in any Auction for the AMPS. The Auction Agent shall
have no duty or liability with respect to enforcement of this Section
2(h).
i) Access to and Maintenance of Auction Records. The Auction Agent shall,
upon the written request of the Company, afford to the Company and its
agents, independent accountants and legal counsel access at reasonable
times during normal business hours to all books, records, documents
and other information concerning the Auction Agent's services
hereunder. The Auction Agent shall maintain such records for a period
of six (6) years (for two (2) years in an easily accessible place), at
which time the Auction Agent shall return to the Company such records,
no more frequently than once each calendar quarter, and such records
shall, in reasonable detail, accurately and fairly reflect the actions
taken by the Auction Agent hereunder
3) The Auction Agent as AMPS Paying Agent.
a) Company to Provide for Dividends and Redemptions.
i) Not later than 12:00 Noon on the Business Day immediately
preceding each Dividend Payment Date with respect to which
dividends on the AMPS have been declared (or each payment date
with respect to the declaration of Additional Distributions (an
"Additional Distribution Payment Date")), the Company shall
deposit or cause to be deposited with the Auction Agent
sufficient funds (available on such Dividend Payment Date or
Additional Distribution Payment Date in New York City) for the
payment of such dividends and any Additional Distributions. The
Company hereby irrevocably instructs the Auction Agent to apply
such funds deposited with the Auction Agent to the payment of
such dividends and any Additional Distributions on such Dividend
Payment Date or Additional Distribution Payment Date. The Company
may direct, in writing, the Auction Agent to invest any available
funds in Short-Term Money Market Instruments; provided that the
proceeds of any such investments will be available in New York
City at the opening of business on such Dividend Payment Date or
Additional Distribution Payment Date.
ii) If the Company shall give a Notice of Redemption, then, not later
than 12:00 Noon on the Business Day immediately preceding the
date fixed for redemption, the Company shall deposit with the
Auction Agent sufficient funds (available on such redemption date
in New York City) to redeem the AMPS called for redemption in
such Notice of Redemption and hereby irrevocably instructs the
Auction Agent to apply such funds and, if applicable, the income
and proceeds received therefrom, to the payment of the redemption
price for such AMPS upon surrender of the certificate or
certificates therefore. The Company may direct, in writing, the
Auction Agent to invest any available funds in Short-Term Money
Market Instruments; provided that the proceeds of any such
investments will be available in New York City at the opening of
business on the redemption date.
iii) The Auction Agent shall not be liable or responsible for any
loss, in whole or in part, incurred or resulting from any
investments made pursuant to paragraph (i) or (ii) of this
Section 3(a), such investments being solely for the account of
and at the risk of the Company. The Auction Agent also shall not
be liable to the extent that investments made by the Auction
Agent at the direction of the Company pursuant to clause (i) or
(ii) of this Section 3(a) do not constitute Short-Term Money
Market Instruments.
iv) If pursuant to Paragraph (i) or (ii) of this Section 3(a), the
Company directs the Auction Agent to invest in Short-Term Money
Market Instruments and the Auction Agent receives income on such
investments, then the Auction Agent shall (to the extent that
such income is not required to pay dividends, Additional
Distributions or the redemption price of shares to be redeemed,
as the case may be), upon the request of the Company, transmit
such income to the Company.
b) Disbursing Dividend and Redemption Price. Subject to receipt of the
requisite funds, the Auction Agent shall pay to the Holders of the
AMPS (i) on each Dividend Payment Date for the AMPS, dividends on such
AMPS, and (ii) on any date fixed for redemption of AMPS, the
redemption price for any AMPS called for redemption upon presentation
and surrender of the certificate or certificates evidencing AMPS held
by such Holders and called for redemption. The amount of dividends for
any Rate Period or portion thereof to be paid by the Auction Agent to
the Holders will be determined by the Company as set forth in Section
2(c) of Part I of the Articles Supplementary. The redemption price to
be paid by the Auction Agent to the Holders will be determined by the
Company as set forth in Section 3(a) of Part I of the Articles
Supplementary. The Company shall deliver to the Auction Agent any
Notice of Redemption required by Section 3(b) of Part I of the
Articles Supplementary when mailed by the Company to the Holders of
the shares to be redeemed. Such notice shall contain the information
required by such Section 3(b) to be stated in the Notice of
Redemption, The Auction Agent shall have no duty or responsibility in
connection with any Notice of Redemption and shall have no duty or
responsibility to determine the redemption price and may rely on the
amount thereof set forth in such notice.
c) Certificate of Eligible Asset Coverage.
i) The Company shall, no later than the close of business on the
third Business Day immediately following each Eligible Asset
Evaluation Date, deliver or cause to be delivered to the Auction
Agent a fully completed Certificate of Eligible Asset Coverage (a
"Certificate of Eligible Asset Coverage"), dated as of such
Eligible Asset Evaluation Date.
ii) If the Certificate of Eligible Asset Coverage indicates that the
Eligible Asset Coverage was not met as of any Eligible Asset
Evaluation Date, or if the Certificate of Eligible Asset Coverage
is not delivered when required, then the Company, no later than
the close of business on the second Business Day following the
Eligible Asset Cure Date related to such Eligible Asset
Evaluation Date, shall deliver to the Auction Agent a Certificate
of Eligible Asset Coverage, dated as of such Eligible Asset Cure
Date, indicating that the Eligible Asset Coverage was met as of
such Eligible Asset Cure Date.
d) Accountant's Certificates. With respect to the Certificate of Eligible
Asset Coverage relating to the Eligible Asset Evaluation Date on the
Date of Original Issue and, thereafter, with respect to the
Certificate of Eligible Asset Coverage relating to the last Eligible
Asset Evaluation Date in each fiscal quarter and such other one
Eligible Asset Evaluation Date during such fiscal quarter as selected
by the Independent Accountants, and relating to any Eligible Asset
Cure Date, the Company shall cause the Independent Accountants to
deliver an Accountants' Certificate, containing the information set
forth in Section 7(b) of Part I of the Articles Supplementary, to the
Auction Agent with respect to the Accountants' Certificate relating to
the last Eligible Asset Evaluation Date in each fiscal quarter and
such other one Eligible Asset Evaluation Date during such fiscal
quarter as selected by the Independent Accountants, no later than the
close of business on the seventh Business Day following the last day
of the related fiscal quarter (such seventh Business Day being
referred to herein as the "Confirmation Date") and shall cause each
Accountants' Certificate relating to any Eligible Asset Cure Date to
be delivered to the Auction Agent no later than the close of business
on the second Business Day following such Eligible Asset Cure Date.
e) Notice of Special Meeting of Holders of the AMPS of the Company.
i) If an event described in Section 5(c) of Part I of the Articles
Supplementary occurs resulting in the commencement of a Voting
Period, then the Auction Agent shall, upon receipt from the
Company of a notice (the "Notice") of a special meeting of the
Holders of the AMPS (a "Special Meeting"), mail the Notice to all
Holders of AMPS who were Holders of record at the close of
business on the fifth Business Day preceding the date of mailing
of the Notice to such Holders (the "Record Date"). The Auction
Agent shall insert the Record Date, the date of the Special
Meeting and the time of day of such meeting, as specified by the
Company, in the Notice.
ii) If at any time after the Auction Agent shall have mailed the
Notice but before the Special Meeting shall have been held, all
accumulated and unpaid dividends (including Additional
Distributions, if any) on all then-outstanding AMPS including the
accumulated and unpaid dividends for the current Rate Period for
the AMPS shall have been paid or declared and a sum sufficient
for the payment of such dividends deposited with the Auction
Agent, the Auction Agent shall, upon receipt from the Company of
a notice of cancellation of such Special Meeting, mail such
notice as soon as practicable to all Holders of AMPS who were
Holders of record at the close of business on the Record Date.
iii) The Company shall provide a temporary chairman for any Special
Meeting. The Auction Agent shall have no obligations in
connection with such meeting, except with respect to the mailing
of the Notice pursuant to this Agreement.
4) The Auction Agent as Transfer Agent and Registrar.
a) Original Issue of Stock Certificates. Upon the Date of the Original
Issue of AMPS, one certificate representing all of the shares of AMPS
issued on such date shall be issued by the Company and, at the request
of the Company, registered in the name of Cede & Co. and countersigned
by the Auction Agent.
b) Registration of Transfer of Shares. Shares of AMPS shall be registered
solely in the name of the Securities Depository or its nominee. If the
Securities Depository shall give notice of its intention to resign as
such and if the Company shall not have selected a substitute
Securities Depository, then upon such resignation, the AMPS shall be
registered for transfer or exchange, and a new certificate or
certificates shall be issued in the name or names of the designated
transferee or transferees upon surrender of the old certificate or
certificates in form deemed by the Auction Agent properly endorsed for
transfer with all necessary endorsers' signatures guaranteed, in such
manner and form as the Auction Agent may require, by a guarantor
reasonably believed by the Auction Agent to be responsible,
accompanied by such assurances as the Auction Agent shall deem
necessary or appropriate to evidence the genuineness and effectiveness
of each necessary endorsement and satisfactory evidence of compliance
with all applicable laws relating to the collection of taxes or funds
necessary for the payment of such taxes.
c) Removal of Legend on Restricted Shares. All requests for removal of
legends on certificates representing shares of AMPS 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 a letter from a
Company Officer authorizing the Auction Agent to remove the legend on
the basis of said opinion.
d) Lost Stock 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 Company and the Auction Agent,
subject at all times to provisions of law, the By-Laws of the Company
governing such matters and resolutions adopted by the Company 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 Company to the Auction Agent to issue
a replacement or new certificate pursuant to this Section 4(d) shall
be deemed to be a representation and warranty by the Company to the
Auction Agent that such issuance will comply with such provisions of
law and the By-Laws and resolutions of the Company.
e) Disposition of Cancelled Certificates; Record Retention. The Auction
Agent shall retain all stock certificates which have been canceled in
transfer or exchange and all accompanying documentation in accordance
with applicable rules and regulations of the Securities and Exchange
Commission for two calendar years. Upon the expiration of this
two-year period, the Auction Agent shall deliver to the Company the
canceled certificates and accompanying documentation. The Company
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 officer or at any
regional office, complete, correct and current hard copies of any and
all such records.
f) Stock Books. For so long as the Auction Agent is acting as the
transfer agent for AMPS pursuant to this Agreement, it shall maintain
a stock book containing a list of the Holders of the shares of AMPS.
In case of any request or demand for inspection of the stock books of
the Company or any other books in the possession of the Auction Agent,
the Auction Agent will notify the Company and secure instructions as
to permitting or refusing such inspection. The Auction Agent reserves
the right, however, to exhibit the stock books or other books to any
Person in case it is advised by its counsel that its failure to do so
would be unlawful.
g) Return of Funds. Any funds deposited with the Auction Agent hereunder
by the Company for any reason (except for the redemption of shares of
AMPS) that remain unpaid after twelve (12) months shall be repaid to
the Company upon the written request of the Company, together with
interest, if any, received thereon. Any funds deposited with the
Auction Agent hereunder by the Company for the redemption of shares of
AMPS that remain unpaid after twenty-four (24) months shall be repaid
to the Company upon the written request of the Company, together with
interest, if any, received thereon.
5) Representations and Warranties of the Company. The Company represents and
warrants to the Auction that:
a) The Company is a duly incorporated and validly existing corporation in
good standing under the laws of the State of Maryland and has full
corporate power to execute and deliver this Agreement and to
authorize, create and issue the shares of AMPS and the shares of AMPS
when issued, will be duly authorized, validly issued, fully paid and
nonassessable;
b) This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid, binding and
enforceable obligation of the Company, subject, as to enforceability,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equitable principles;
c) The form of the certificate evidencing the shares of AMPS complies
with all applicable laws of the State of Maryland;
d) When issued, the shares of AMPS 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 this Agreement or will have been required in connection
with the issuance of the shares of AMPS;
e) The execution and delivery of this Agreement, the performance by the
Company of its obligations hereunder and the issuance and delivery of
the shares of AMPS 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 Articles of Incorporation (as amended
by one or more Articles Supplementary) or the By-Laws of the Company,
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 Company a party or by which it
is bound; and
f) No taxes are payable upon or in respect of the execution of this
Agreement or the issuance of the shares of AMPS.
6) The Auction Agent
a) Duties and Responsibility.
i The Auction Agent is acting solely as agent for the Company
hereunder and owes no fiduciary duties to any other Person by
reason of this Agreement.
ii 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.
iii The Auction Agent shall have no duty or responsibility to verify
or determine the accuracy of any document delivered to it in
accordance with the terms hereof. The Auction Agent shall have no
duty or responsibility to enforce the obligations of the Company
to provide the Auction Agent with any notice or document.
iv 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.
b) Rights of the Auction Agent.
i The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized herby
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 given by the Company or by a
Broker-Dealer. The Auction Agent may record telephone
communications with the Company or with the Broker-Dealers or
both.
ii 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.
iii 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.
iv The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
c) Auction Agent's Disclaimer. The Auction Agent makes no representation
as to the validity or adequacy of this Agreement, the Broker-Dealer
Agreements or the shares of AMPS.
d) Compensation, Expenses and Indemnification.
i The Company shall pay the Auction Agent from time to time
reasonable compensation for all services rendered by it under
this Agreement and the Broker-Dealer Agreements.
ii The Company 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 this 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 for which it is entitled to
indemnification hereunder or thereunder.
7) Miscellaneous
a) Term of Agreement.
i The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7(a)(i). The Company may
terminate this Agreement at any time by so notifying the Auction
Agent; provided that the Company has entered into an agreement in
substantially the form of this Agreement with a successor Auction
Agent or no shares of AMPS remain outstanding. The Auction Agent
may terminate this Agreement upon written notice to the Company
on the date specified in such notice, which termination may be no
earlier than the Business Day after the second Dividend Payment
Date for the AMPS following delivery of such notice.
ii Except as otherwise provided in this paragraph (ii), the
respective rights and duties of the Company and the Auction Agent
under this Agreement with respect to AMPS shall cease upon
termination of this Agreement. The Company's representations,
warranties, covenants and obligations to the Auction Agent under
Sections 5 and 6(d) hereof shall survive the termination of this
Agreement. Upon termination of this Agreement, the Broker-Dealer
Agreements shall automatically terminate and the duties of the
Auction Agent under each of the Broker-Dealer Agreements shall
cease and at the Company's request, the Auction Agent shall
promptly deliver to the Company copies of all books and records
maintained by it.
b) Communications. Except for (i) communications authorized to be by
telephone pursuant to 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 give to such party,
addressed to it, at its address or facsimile number set forth below:
If to the Company, addressed:
Boulder Total Return Fund, Inc.
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone No: (000) 000-0000
Facsimile No: (000) 000-0000
If to the Auction Agents, addressed (2 copies):
Bankers Trust Company, as Auction Agent
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate Securities
Telephone No.: 000-000-0000
Facsimile No. : 000-000-0000
Or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Company by a Company Officer and
on behalf of the Auction Agent by an Authorized Officer.
c) Entire Agreement. This Agreement contains the entire Agreement between
the parties relating to the subject matter hereof, and there are no
other representations, endorsements, promises, agreements or
understandings, oral, written or implied, between the parties relating
to the subject matter hereof except for agreements relating the
compensation of the Auction Agent.
d) Benefits. Nothing herein, express or implied, shall give to any
Person, other than the Company, the Auction Agent and their respective
successors and assigns, any benefit of any legal or equitable right,
remedy or claim hereunder.
e) Amendment; Waiver.
i This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by the parties hereto.
ii 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.
f) 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 Company and the Auction Agent.
g) 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.
h) 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.
i) 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 New York without giving effect
to the choice of law provisions thereof.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first above written.
BOULDER TOTAL RETURN FUND, INC.
By: ____________________________________
Xxxx X. Xxxxx,
Its: Vice President
BANKERS TRUST COMPANY, as Auction Agent
By: _______________________________
Its: _______________________________
