Exhibit (K)(8)
AEW REAL ESTATE INCOME FUND
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FORM OF AUCTION AGENCY AGREEMENT
dated as of [ ], 2003
Relating to
Auction Market Preferred Shares
Series [M]
of
AEW REAL ESTATE INCOME FUND
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DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
FORM OF AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of [ ],
2003, is by and between AEW Real Estate Income Fund (the "Trust") and Deutsche
Bank Trust Company Americas, a New York banking corporation.
The Trust proposes to issue an aggregate of [ ] preferred shares, par
value $.00001 per share, liquidation preference $25,000 per share, designated as
Auction Market Preferred Shares, Series [M] (the "AMPS"), pursuant to the
Amended and Restated Bylaws (as defined below).
The Trust desires that Deutsche Bank Trust Company Americas ("Deutsche
Bank") perform certain duties as agent in connection with each Auction (as
defined below) (in such capacity, the "Auction Agent"), and as the transfer
agent, registrar, dividend paying agent and redemption agent with respect to the
AMPS (in all such capacities, the "Paying Agent"), upon the terms and conditions
of this Agreement, and the Trust hereby appoints Deutsche Bank as said Auction
Agent and Paying Agent in accordance with such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Trust and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to Amended and Restated Bylaws.
Capitalized terms not defined herein shall have the respective meanings
specified in the Amended and Restated Bylaws.
1.2 Terms Defined Herein.
As used herein and in the Settlement Procedures, the following terms
shall have the following meanings, unless the context otherwise requires:
(a) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository that will act on behalf of a Bidder.
(b) "Agreement" shall mean this Agreement.
(c) "Amended and Restated Bylaws" shall mean the Amended and
Restated Bylaws of the Trust in effect at the time the registration statement
relating to the AMPS (the "Registration Statement") is declared effective by the
Securities and Exchange Commission, specifying the powers, preferences and
rights of the AMPS.
(d) "Auction" shall have the meaning specified in Section 2.1
hereof.
(e) "Auction Procedures" shall mean the procedures as from time
to time in effect for conducting Auctions, as set forth in Part II of Section
11.1 of the Amended and Restated Bylaws.
(f) "Authorized Officer" of the Auction Agent shall mean each
Managing Director, Vice President and Associate of the Auction Agent, and every
other officer or employee of the Auction Agent designated as an "Authorized
Officer" for purposes hereof in a communication to the Trust.
(g) "Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form attached hereto
as Exhibit A.
(h) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(i) "Trust Officer" shall mean the Chairman, the Chief Executive
Officer, 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
Chief Operating Officer, the Secretary, the Treasurer, each Assistant Vice
President, each Assistant Secretary and each Assistant Treasurer of the Trust
and every other officer or employee of the Trust designated as a "Trust Officer"
for purposes hereof in a communication to the Auction Agent.
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of the Agreement:
(a) words importing the singular number shall include the plural
number and vice versa.
(b) the captions and headings herein are solely for convenience
of reference and shall not constitute a part of the Agreement nor shall they
affect its meaning, construction or effect.
(c) the words "hereof", "herein", "hereto" and other words of
similar import refer to the Agreement as a whole.
(d) all references herein to a particular time of day shall be to
New York City time.
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2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Board of Trustees of the Trust has adopted a resolution
appointing Deutsche Bank as Auction Agent for purposes of the Auction
Procedures. The Auction Agent hereby accepts such appointment and agrees that,
on each Auction Date, it shall follow the procedures set forth in this Section 2
and the Auction Procedures for the purpose of determining the Applicable Rate
for any Subsequent Rate Period of the AMPS for which the Applicable Rate is to
be determined by 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.
2.2 Preparation for Each Auction; Maintenance of Registry of
Beneficial Owners.
(a) Not later than seven days prior to the first Auction Date for
the AMPS, the Trust shall provide the Auction Agent with a list of the
Broker-Dealers. Not later than seven days prior to any Auction Date for the AMPS
for which any change in such list of Broker-Dealers is to be effective, the
Trust will notify the Auction Agent in writing of such change and, if any such
change involves the addition of a Broker-Dealer to such list, shall cause to be
delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by such Broker-Dealer. The Auction Agent and the
Trust shall have entered into a Broker-Dealer Agreement with each Broker-Dealer
prior to the participation of any such Broker-Dealer in any Auction.
(b) In the event that any Auction Date for the AMPS shall be
changed after the Auction Agent shall have given the notice referred to in
paragraph (a) of the Settlement Procedures, or after the notice referred to in
Section 2.3 hereof, if applicable, the Auction Agent, by such means as the
Auction Agent reasonably 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 or 9:15 A.M. on the old Auction Date.
(c) (i) The Auction Agent shall maintain a current registry of
the Beneficial Owners of the AMPS who shall constitute Existing Holders of AMPS
for purposes of Auctions and shall indicate thereon the identity of the
respective Broker-Dealer of each Existing Holder, if any, on whose behalf such
Broker-Dealer submitted the most recent Order in any Auction which resulted in
such Existing Holder continuing to hold or purchasing AMPS. The Auction Agent
shall keep such registry current and accurate based on the information provided
to it from time to time by the Broker-Dealers. The Trust shall use commercially
reasonable efforts to provide or cause to be provided to the Auction Agent
within ten Business Days of the Date of Original Issue of the AMPS a list of the
initial Existing Holders of the AMPS, the number of shares purchased by each
such Existing Holder and the respective Broker-Dealer of each such Existing
Holder or the affiliate thereof through which each such Existing Holder
purchased such shares. The Auction Agent may rely upon, as conclusive evidence
of the identities of the Existing Holders of AMPS (A) such list, (B) the results
of Auctions, (C) notices from any Broker-Dealer as described in the first
sentence of Section 2.2(c)(iii) hereof and (D) the results of any procedures
approved by the Trust that have been devised for the purpose of determining the
identities of Existing Holders in situations where AMPS may have been
transferred without compliance with any restriction on the transfer thereof set
forth in the Auction Procedures.
(ii) In the event of any partial redemption of any series of
AMPS, the Auction Agent shall, at least two Business Days prior to the next
Auction for such series, request each
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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 AMPS of such series such Broker-Dealer believes are owned
by such Person after such redemption. In the absence of receiving any such
information from any 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 AMPS of such series shown in such registry.
(iii) The Auction Agent shall register a transfer of AMPS
from an Existing Holder of such AMPS only if such transfer is to another
Existing Holder, or other Person if permitted by the Trust, and only if such
transfer is made (A) pursuant to an Auction, (B) if such transfer is made other
than pursuant to an Auction, the Auction Agent has been notified in writing (I)
in a notice substantially in the form of Exhibit B to the Broker-Dealer
Agreements by a Broker-Dealer of such transfer or (II) in a notice substantially
in the form of Exhibit C to the Broker-Dealer Agreements by the Broker-Dealer of
any Existing Holder, or other Person if permitted by the Trust, that purchased
or sold such AMPS in an Auction of the failure of such AMPS to be transferred as
a result of such Auction or (C) pursuant to procedures approved by the Trust
that have been devised for the purpose of determining the identities of Existing
Holders in situations where AMPS may have been transferred without compliance
with any restriction on the transfer thereof set forth in the Auction
Procedures. The Auction Agent is not required to accept any such notice for an
Auction unless it is received by the Auction Agent by 12:00 noon on the Auction
Date. The Auction Agent shall rescind a transfer made on the registry of the
Existing Holders of the AMPS if the Auction Agent has been notified in writing
by the Broker-Dealer of any Person that (i) purchased any AMPS and the seller
failed to deliver such shares or (ii) sold any AMPS and the purchaser failed to
make payment to such Person upon delivery to the purchaser of such shares.
(d) The Auction Agent may, but shall have no obligation to,
request each Broker-Dealer, as set forth in the Broker-Dealer Agreements, to
provide the Auction Agent with a list of Persons who such Broker-Dealer believes
are 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 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 AMPS to any Person other than the Trust and the Broker-Dealer
that provided such information; provided, however, that the Auction Agent
reserves the right and is authorized to disclose any such information if (a) it
is ordered to do so by a court of competent jurisdiction or a regulatory body,
judicial or quasi-judicial agency or authority having the authority to compel
such disclosure or (b) it is advised by competent external counsel that its
failure to do so would be unlawful.
2.3 Auction Schedule.
Subject to Section 11.1 of the Amended and Restated Bylaws, the Auction
Agent shall conduct Auctions weekly in accordance with the schedule set forth
below. Such schedule may be changed by the Auction Agent with the consent of the
Trust, which consent shall not be unreasonably withheld. The Auction Agent shall
give written notice of any such change to each Broker-Dealer. Such notice shall
be given prior to the close of business on the Business Day next preceding the
first Auction Date on which any such change shall be effective.
Time Event
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By 9:30 A.M. Auction Agent advises the Trust and
Broker-Dealers of the applicable Maximum Rate and
the Reference Rate used in determining such
Maximum Rate as set forth in Section 2.7 hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in paragraph
2 of the Auction Procedures. Submission Deadline
is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations pursuant to
paragraph 3(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Trust of results of Auction
as provided in paragraph 3(b) of the Auction
Procedures.
Submitted Bids and Submitted Sell Orders are
accepted and rejected and AMPS allocated as
provided in paragraph 4 of the Auction
Procedures. Auction Agent shall give notice of
Auction results as set forth in Section 2.4
hereof.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.4 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted a Bid or
Sell Order in an Auction whether such Bid or Sell Order was accepted or rejected
in whole or in part and of the Applicable Rate for the next Dividend Period for
the related AMPS by telephone or through its Auction Processing System as set
forth in paragraph (a) of the Settlement Procedures.
2.5 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for the AMPS,
the Trust shall pay to the Auction Agent an amount in cash equal to the
aggregate fees payable to the Broker-Dealers for the AMPS pursuant to Section
2.6 of the Broker-Dealer Agreements. Such fees shall be paid on the basis of the
purchase price of AMPS placed by each Broker-Dealer at such Auction and shall
not exceed (i) in the case of any Auction Date immediately preceding a Dividend
Period of less than one year, the product of (A) a fraction the numerator of
which is the number of days in such Dividend Period (calculated by counting the
first date of such Dividend Period but excluding the next to last day thereof)
and the denominator of which is 360, times (B) 1/4 of 1%, times (C) $25,000
times (D) the sum of the aggregate number of shares of outstanding AMPS for
which the Auction is conducted and (ii) in the case of any Special Dividend
Period of one year or more, the amount determined by mutual consent of the Trust
and any such Broker-Dealers, which rate shall be based upon a selling concession
that would be applicable to an underwriting of fixed or variable rate AMPS with
a similar final maturity or variable rate dividend period, respectively, at the
commencement of the Dividend Period with respect to such Auction. For the
avoidance of doubt, only one Broker-Dealer shall be considered to have placed a
particular share of AMPS at any particular Auction for purposes of this Section.
The Auction Agent shall apply such moneys as set forth in Section 2.6 of each
such Broker-Dealer Agreement.
(b) The Trust shall obtain the consent of the Auction Agent prior
to selecting any Person to act as a Broker-Dealer, which consent shall not be
unreasonably withheld. Notwithstanding the
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foregoing, the Trust may designate ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement
as set forth therein if so directed by the Trust, provided that at least one
Broker-Dealer Agreement would be in effect for the AMPS after such termination.
(d) Subject to the Auction Agent's having consented to the
selection of the relevant Broker-Dealer pursuant to Section 2.5(b) hereof, the
Auction Agent shall from time to time enter into such Broker-Dealer Agreements
with one or more Broker-Dealers as the Trust shall request, and shall enter into
such schedules to any such Broker-Dealer Agreements as the Trust shall request.
2.6 Special Rate Periods.
The provisions contained in paragraph 3 of Part I of Section 11 of the
Amended and Restated Bylaws concerning Special Rate Periods and the notification
of a Special Rate Period will be followed by the Trust and, to the extent
applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
2.7 Determination of Maximum Rate.
(a) (i) On each Auction Date, the Auction Agent shall determine
the initial dividend rate and the Maximum Rate. If any "AA" Financial Composite
Commercial Paper Rate, Treasury Index Rate or Reference Rate, as the case may
be, is not quoted on an interest or bond equivalent, as the case may be, basis,
the Auction Agent shall convert the quoted rate to the interest or bond
equivalent thereof as set forth in the definition of such rate in the Amended
and Restated Bylaws if the rate obtained by the Auction Agent is quoted on a
discount basis, or if such rate is quoted on a basis other than an interest or
bond equivalent or discount basis the Auction Agent shall convert the quoted
rate to an interest or bond equivalent rate after consultation with the Trust as
to the method of such conversion.
(i) If any "AA" Financial 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" Financial Composite Commercial Paper Rate, the Auction Agent shall
immediately notify the Trust so that the Trust can determine whether to select a
substitute Commercial Paper Dealer or substitute Commercial Paper Dealers to
provide the quotation or quotations not being supplied by any Commercial Paper
Dealer or Commercial Paper Dealers. The Trust shall promptly advise the Auction
Agent of any such selection.
(ii) If any Treasury Index Rate is to be based on rates
supplied by U.S. Government Securities Dealers and one or more of the U.S.
Government Securities Dealers shall not provide a quotation for the
determination of such Treasury Index Rate, the Auction Agent shall immediately
notify the Trust so that the Trust can determine whether to select a substitute
U.S. Government Securities Dealer or substitute U.S. Government Securities
Dealers to provide the quotation or quotations not being supplied by any U.S.
Government Securities Dealer or U.S. Government Securities Dealers. The Trust
shall promptly advise the Auction Agent of any such selection.
2.8 Ownership of Shares of AMPS.
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The Trust shall notify the Auction Agent if the Trust or, to the knowledge
of the Trust, any affiliate of the Trust acquires any AMPS. Neither the Trust
nor any affiliate of the Trust shall submit any Order in any Auction for AMPS,
except as set forth in the next sentence. Any Broker-Dealer that is an affiliate
of the Trust may submit Orders in Auctions, but only if such Orders are not for
its own account. For purposes of this Section 2.8, a Broker-Dealer shall not be
deemed to be an affiliate of the Trust solely because one or more of the
directors or executive officers of such Broker-Dealer or of any Person
controlled by, in control of or under common control with such Broker-Dealer is
also a director of the Trust. The Auction Agent shall have no duty or liability
with respect to enforcement of this Section 2.8.
2.9 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Trust, its agents, independent public
accountants and counsel and the Broker-Dealers, access at reasonable times
during normal business hours to review and make extracts or copies of all books,
records, documents and other information concerning the conduct and results of
Auctions (at no cost to the Auction Agent), provided that any such agent,
accountant, counsel or Broker-Dealer shall furnish the Auction Agent with a
letter from the Trust requesting that the Auction Agent afford such person
access. The Auction Agent shall maintain records relating to any Auction for a
period of six years after such Auction, and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the Auction Agent
hereunder. Upon the expiration of this six-year period, the Auction Agent shall
deliver to the Trust all such records. The Auction Agent also shall undertake to
furnish to the Securities and Exchange Commission, upon demand, either at its
principal office or at any regional office, complete, correct and current hard
copies of any and all such records. Thereafter, such records shall not be
destroyed by the Trust without the approval of the Auction Agent, which approval
shall not be withheld unreasonably, but will be safely stored for possible
future reference. The Auction Agent agrees that all such records prepared or
maintained by it relating to the services performed hereunder are the property
of the Trust and will be preserved, maintained and made available in accordance
with the requirements of applicable law, and will be surrendered promptly to the
Trust on and in accordance with its request.
3. The Auction Agent as Dividend Paying Agent and Redemption Price Disbursing
Agent.
The Auction Agent, as dividend and redemption price disbursing agent, shall
pay to the Holders of AMPS (i) on each Dividend Payment Date, dividends on the
AMPS, (ii) on any date fixed for redemption of AMPS, the Redemption Price of any
shares called for redemption and (iii) any Late Charge related to any payment of
dividends or Redemption Price, in each case after receipt of the necessary funds
from the Trust with which to pay such dividends, Redemption Price or Late
Charge. The amount of dividends for any Rate Period for the AMPS to be paid by
the Auction Agent to the Holders of such shares will be determined by the Trust
as set forth in paragraph 2 of Part I of Section 11.1 of the Amended and
Restated Bylaws. The Redemption Price of any shares to be paid by the Auction
Agent to the Holders will be determined by the Trust as set forth in paragraph 8
of Part I of Section 11.1 of the Amended and Restated Bylaws. The Trust shall
notify the Auction Agent in writing of a decision to redeem AMPS at least five
days prior to the date a notice of redemption is required to be mailed to the
Holders of the shares to be redeemed by paragraph 8(c) of Part I of Section 11.1
of the Amended and Restated Bylaws. Such notice by the Trust to the Auction
Agent shall contain the information required by paragraph 8(c) of Part I of
Section 11.1 of the Amended and Restated Bylaws to be stated in the notice of
redemption required to be mailed by the Trust to such Holders.
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4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Stock or Shares Certificates.
Upon the Date of Original Issue of the AMPS, one certificate representing
all of the AMPS issued on such date shall be issued by the Trust and, at the
request of the Trust, registered in the name of Cede & Co., as nominee of the
Securities Depository, and countersigned by the Auction Agent. If there is no
Securities Depository, at the Trust's option and upon its receipt of such
documents as it deems appropriate, any AMPS may be registered in the Trust's
stock register in the name of the Beneficial Owner thereof, and such Beneficial
Owner thereupon will be entitled to receive certificates therefor and required
to deliver certificates therefor upon transfer or exchange thereof. If the
certificate or certificates for AMPS are not held by the Securities Depository
or its nominee, payment will be made in same-day funds to the Auction Agent
against delivery of such certificates.
4.2 Registration of Transfer of Shares.
The AMPS shall be registered solely in the name of the Securities
Depository or its nominee.
4.3 Removal of Legend on Restricted Shares.
All requests for removal of legends on 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 free of the restrictions
described in such legend, such opinion to be delivered under cover of a letter
from a Trust Officer authorizing the Auction Agent to remove the legend on the
basis of said opinion.
4.4 Lost Stock or Share Certificates.
The Auction Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed upon the
fulfillment of such requirements as shall be deemed appropriate by the Trust and
the Auction Agent, subject at all times to provisions of law, the Amended and
Restated Bylaws governing such matters and resolutions adopted by the Board of
Trustees of the Trust with respect to lost securities. The Auction Agent may
issue new certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Trust to the Auction Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Trust to the Auction Agent that such
issuance will comply with such provisions of law and the Amended and Restated
Bylaws and resolutions of the Board of Trustees of the Trust.
4.5 Disposition of Cancelled Certificates; Record Retention.
The Auction Agent shall retain all stock or share certificates which have
been cancelled in transfer or exchange and all accompanying documentation in
accordance with applicable rules and regulations of the Securities and Exchange
Commission for at least six calendar years from the date of such cancellation.
The Auction Agent, upon written request by the Trust, shall afford to the Trust,
its agents and counsel access at reasonable times during normal business hours
to review and make extracts or copies (at the Trust's sole cost and expense) of
such certificates and accompanying documentation. Upon the expiration of this
six-year period, the Auction Agent shall deliver to the Trust the cancelled
certificates and accompanying documentation. The Auction Agent also shall
undertake to furnish to the Securities and Exchange Commission, upon demand,
either at its principal office or at any regional office, complete, correct and
current hard copies of any and all such records. Thereafter, such records shall
not
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be destroyed by the Trust without the approval of the Auction Agent, which
approval shall not be withheld unreasonably, but will be safely stored for
possible future reference.
4.6 Stock or Record Books.
For so long as the Auction Agent is acting as the transfer agent for the
AMPS pursuant to the Agreement, it shall maintain a stock or record book
containing a list of the Holders of the AMPS. In case of any request or demand
for the inspection of the stock or record books of the Trust or any other books
in the possession of the Auction Agent, the Auction Agent will notify the Trust
and secure instructions as to permitting or refusing such inspection. The
Auction Agent reserves the right, however, to exhibit the stock or record books
or other books to any Person if (a) it is ordered to do so by a court of
competent jurisdiction or a regulatory body, judicial or quasi-judicial agency
or authority having the authority to compel such disclosure or (b) it is advised
by competent external counsel that its failure to do so would be unlawful.
4.7 Return of Funds.
Any funds deposited with the Auction Agent hereunder by the Trust for any
reason, including but not limited to redemption of AMPS, that remain unpaid
after ninety days shall be repaid to the Trust upon the written request of the
Trust.
5. Representations and Warranties.
5.1 Representations and Warranties of the Trust.
The Trust represents and warrants to the Auction Agent that:
(a) The Trust has been duly organized and is validly existing as an
unincorporated voluntary association under, and by virtue of, the laws of the
Commonwealth of Massachusetts and has full power to execute and deliver this
Agreement and to authorize and issue the AMPS; the AMPS have been duly
authorized by the Trust and, upon completion of the initial sale of the AMPS and
receipt of payment therefor, will be validly issued by the Trust, fully paid
and, except as set forth in the Registration Statement, nonassessable;
(b) the Agreement has been duly and validly authorized, executed
and delivered by the Trust and constitutes the legal, valid and binding
obligation of the Trust, subject 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 AMPS complies or will
comply with all applicable laws of the Commonwealth of Massachusetts;
(d) when issued, the 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 the Agreement or will
have been required in connection with the issuance of AMPS, except such action
as is required by applicable state securities laws;
(e) the execution and delivery of the Agreement and the issuance and
delivery of the 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 Agreement and Declaration of Trust of the Trust, as
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amended to date, the Amended and Restated Bylaws or any law or regulation, any
order or decree of any court or public authority having jurisdiction over the
Trust, or any mortgage, indenture, contract, agreement or undertaking to which
the Trust is a party or by which it is bound the effect of which conflict,
violation, default or breach would be material to the Trust or the Trust and its
subsidiaries taken as a whole; and
(f) no taxes are payable upon or in respect of the execution of the
Agreement or the issuance of the AMPS of any series.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Trust that:
(i) the Auction Agent is duly organized and is validly existing
as a banking corporation in good standing under the laws of the State
of New York and has the corporate power to enter into and perform its
obligations under this Agreement; and
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal,
valid and binding obligation of the Auction Agent, enforceable against
the Auction Agent in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equitable
principles.
6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trust
hereunder and owes no fiduciary duties to any Person, other than the Trust, by
reason of the Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are specifically set forth in the Agreement, and no implied covenants
or obligations shall be read into the 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 the
Agreement.
6.2 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 reasonably believed in
good faith by it to be genuine. The Auction Agent shall not be liable for acting
upon any telephone communication authorized hereby which the Auction Agent
believes in good faith to have been given by the Trust or by a Broker-Dealer.
The Auction Agent may record telephone communications with the Trust or with the
Broker-Dealers or both.
(b) The Auction Agent may consult with competent external 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 reasonable reliance thereon.
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(c) The Auction Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
6.3 Compensation, Expenses and Indemnification.
(a) The Trust shall pay the Auction Agent compensation for all
services rendered by it under the Agreement and the Broker-Dealer Agreements as
the Trust and the Auction Agent have agreed to in writing from time to time,
subject to adjustments if the AMPS no longer are held of record by the
Securities Depository or its nominee or if there shall be such other change as
shall increase of decrease materially the Auction Agent's obligations hereunder
or under the Broker-Dealer Agreements.
(b) The Trust shall reimburse the Auction Agent upon its request for
all reasonable out-of-pocket expenses, disbursements and advances incurred or
made by the Auction Agent in accordance with any provision of this Agreement and
the Broker-Dealer Agreements (including the reasonable compensation, expenses
and disbursements of its agents and counsel), except any expense or disbursement
attributable to its negligence or bad faith.
(c) The Trust shall indemnify the Auction Agent for and hold it
harmless against any loss, liability or expense incurred without negligence or
bad faith on the part of the Auction Agent 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, except such as may result from the Auction Agent's negligence or bad
faith.
6.4 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or adequacy of
the Agreement, the Broker-Dealer Agreements or the AMPS of any series except for
the Auction Agent's representations and warranties set forth in Section 5.2
hereof.
7. Miscellaneous.
7.1 Term of Agreement.
(a) The term of the Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Trust may terminate the
Agreement at any time by so notifying the Auction Agent, provided that the Trust
has entered into an agreement with a successor auction agent. The Auction Agent
may terminate the Agreement upon written notice to the Trust on the date
specified in such notice, which date shall be no earlier than 60 days after the
date of delivery of such notice.
(b) Except as otherwise provided in this paragraph (b), the respective
rights and duties of the Trust and the Auction Agent under the Agreement with
respect to the AMPS shall cease upon termination of the Agreement. The Trust's
representations, warranties, covenants and obligations to the Auction Agent
under Sections 5 and 6.4 hereof shall survive the termination of the Agreement.
The Auction Agent's covenants and obligations to the Trust under Section 7.8
hereof shall survive the termination of this Agreement. Upon termination of the
Agreement, the Auction Agent shall, at the Trust's request, promptly deliver to
the Trust copies of all books and records maintained by it with respect to the
AMPS in connection with its duties hereunder. Upon termination of this
Agreement, the Auction
11
Agent shall (i) resign as Auction Agent under the Broker-Dealer Agreements, (ii)
at the Trust's request, deliver promptly to the Trust copies of all books and
records maintained by it in connection with its duties hereunder, and (iii)
transfer promptly to the Trust or to any successor auction agent, as requested
by the Trust, any funds deposited by the Trust with the Auction Agent (whether
in its capacity as Auction Agent or Paying Agent) pursuant to the Agreement
which have not been distributed previously by the Auction Agent in accordance
with the Agreement.
7.2 Communications.
Except for (i) communications authorized to be by telephone pursuant to the
Agreement or the Auction Procedures and (ii) communications in connection with
Auctions (other than those expressly required to be in writing), all notices,
requests and other communications to any party hereunder shall be in writing
(including telecopy or similar writing) and shall be given to such party,
addressed to it, at its address or telecopy number set forth below:
If to the Trust: AEW Real Estate Income Fund
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: [ ]
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Auction Agent: Deutsche Bank Trust Company Americas
Corporate Trust and Agency Services
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: __________________
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
or such other address or telecopy number as such party hereafter may specify for
such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Trust by a Trust Officer and on
behalf of the Auction Agent by telephone (confirmed by telecopy or in writing)
by an Authorized Officer.
7.3 Entire Agreement.
The Agreement contains the entire agreement between the parties relating
to, and superseding any prior agreement between the parties relating to, the
subject matter hereof, and there are no other representations, endorsements,
promises, agreements or understandings, oral, written or implied, between the
parties relating to the subject matter hereof except for agreements relating to
the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other than
the Trust, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment Waiver.
12
(a) The Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to
be charged.
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6 Successors and Assigns.
The Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of each of the Trust and
the Auction Agent. The Agreement may not be assigned by either party hereto
absent the prior written consent of the other party, which consent shall not be
unreasonably withheld.
7.7 Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
13
7.8 Disclosure of Information.
The Auction Agent agrees that it will not disclose or use any
"non-public personal information" about the Trust's shareholders other than such
uses or disclosures as are permitted by Regulation S-P under Section 504 of the
▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇ Act ("Regulation S-P"). "Nonpublic personal information" about
a shareholder shall mean: (i) personally identifiable financial information;
(ii) any list, description, or other grouping of consumers that is derived from
using any personally identifiable information that is not publicly available;
and (iii) any other information that a Customer or the Transfer Agent is
prohibited from using or disclosing pursuant to Regulation S-P. The Auction
Agent also agrees to comply with all federal and state anti-money laundering
laws applicable to such party, including, to the extent applicable, the USA
PATRIOT Act of 2001 and any implementing rules, regulations and authoritative
guidelines of any applicable regulatory agency thereunder.
7.9 Governing Law.
The Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
7.10 Execution in Counterparts
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
7.11 Limitation of Liability
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of the Commonwealth of Massachusetts,
and notice is hereby given that this Agreement is executed on behalf of the
Trust by an officer or trustee of the Trust in his or her capacity as an officer
or trustee of the Trust and not individually and that the obligations of or
arising out of this instrument are not binding upon any of the trustees,
officers or shareholders individually but are binding only upon the assets and
property of the Trust.
AEW REAL ESTATE INCOME FUND
By: ___________________________________
Name
Title
DEUTSCHE BANK TRUST COMPANY AMERICAS
By: ___________________________________
Name
Title
14
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
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 Agency Agreement and each
Broker-Dealer Agreement. Nothing contained in this Exhibit constitutes a
representation by the Trust that in each Auction each party referred to herein
will actually perform the procedures described herein to be performed by such
party.
(a) On each Auction Date, the Auction Agent shall notify by
telephone, telecopier or other means of electronic communication acceptable to
the Broker-Dealers that participated in the Auction held on such Auction Date
and submitted an Order on behalf of any Beneficial Owner or Potential Beneficial
Owner of:
(i) the Applicable Rate fixed for the next succeeding
Dividend Period;
(ii) whether Sufficient Clearing Bids existed for the
determination of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer")
submitted a Bid or Sell Order on behalf of a Beneficial Owner, the
number of AMPS, if any, to be sold by such Beneficial Owner;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer")
submitted a Bid on behalf of a Potential Beneficial Owner, the number
of AMPS, if any, to be purchased by such Potential Beneficial Owner;
(v) if the aggregate number of AMPS to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid
or a Sell Order exceeds the aggregate number of AMPS to be purchased
by all Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid, the name or names of one or more Buyer's
Broker-Dealers (and the name of the Agent Member, if any, of each such
Buyer's Broker-Dealer) acting for one or more purchasers of such
excess number of AMPS and the number of such shares to be purchased
from one or more Beneficial Owners on whose behalf such Broker-Dealer
acted by one or more Potential Beneficial Owners on whose behalf each
of such Buyer's Broker-Dealers acted;
(vi) if the aggregate number of AMPS to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid exceeds the aggregate number of AMPS to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid
or a Sell Order, the name or names of one or more Seller's Broker
Dealers (and the name of the Agent Member, if any, of each such
Seller's Broker-Dealer) acting for one or more sellers of such excess
number of AMPS and the number of such shares to be sold to one or more
Potential Beneficial Owners on whose behalf such Broker-Dealer acted
by one or more Beneficial Owners on whose behalf each of such Seller's
Broker-Dealers acted; and
(vii) the Auction Date of the next succeeding Auction with
respect to the AMPS.
B-1
(b) On each Auction Date, each Broker-Dealer that submitted an
Order on behalf of any Beneficial Owner or Potential Beneficial Owner shall:
(i) in the case of a Broker-Dealer that is a Buyer's
Broker-Dealer, instruct each Potential Beneficial Owner on whose
behalf such Broker-Dealer submitted a Bid that was accepted, in whole
or in part, to instruct such Potential Beneficial Owner's Agent Member
to pay to such Broker-Dealer (or its Agent Member) through the
Securities Depository the amount necessary to purchase the number of
AMPS to be purchased pursuant to such Bid against receipt of such
shares and advise such Potential Beneficial Owner of the Applicable
Rate for the next succeeding Dividend Period;
(ii) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Sell Order that was accepted, in whole or in
part, or a Bid that was accepted, in whole or in part, to instruct
such Beneficial Owner's Agent Member to deliver to such Broker-Dealer
(or its Agent Member) through the Securities Depository the number of
AMPS to be sold pursuant to such Order against payment therefor and
advise any such Beneficial Owner that will continue to hold AMPS of
the Applicable Rate for the next succeeding Dividend Period;
(iii) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate for the
next succeeding Dividend Period;
(iv) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted an Order of the Auction Date for the next
succeeding Auction; and
(v) advise each Potential Beneficial Owner on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole or in
part, of the Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to (a)
above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf of a
Potential Beneficial Owner or an Beneficial Owner shall, in such manner and at
such time or times as in its sole discretion it may determine, allocated any
funds received by it pursuant to (b)(i) above and any AMPS received by it
pursuant to (b)(ii) above among the Potential Beneficial Owners, if any, on
whose behalf such Broker-Dealer submitted Bids, the Beneficial Owners, if any,
on whose behalf such Broker-Dealer submitted Bids that were accepted or Sell
Orders, and any Broker-Dealer or Broker-Dealers identified to it by the Auction
Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Beneficial Owner and Beneficial Owner
shall instruct its Agent Member as provided in (b)(i) or (ii) above,
as the case may be;
(ii) each Seller's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its Agent Member to
(A) pay through the Securities Depository to the Agent Member of the
Beneficial Owner delivering shares to such Broker-Dealer pursuant to
(b)(ii) above the amount necessary to purchase such shares against
receipt of such shares, and (B) deliver such shares through the
Securities Depository to any Buyer's Broker-Dealer (or its Agent
Member) identified to such Seller's Broker-Dealer pursuant to (a)(v)
above against payment therefor; and
B-2
(iii) each Buyer's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its Agent Member to
(A) pay through the Securities Depository to any Seller's
Broker-Dealer (or its Agent Member) identified pursuant to (a)(vi)
above the amount necessary to purchase the shares to be purchased
pursuant to (b)(i) above against receipt of such shares, and (B)
deliver such shares through the Securities Depository to the Agent
Member of the purchase thereof against payment therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d)(i) above
shall instruct the Securities Depository to execute the transactions
described in (b)(i) or (ii) above, and the Securities Depository shall
execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in (d)(ii) above, and the Securities Depository shall
execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in (d)(iii) above, and the Securities Depository shall
execute such transactions.
(f) If a Beneficial Owner selling AMPS in an Auction fails to
deliver such shares (by authorized book-entry) a Broker-Dealer may deliver to
the Potential Beneficial Owner on behalf of which it submitted a Bid that was
accepted a number of whole AMPS that is less than the number of shares that
otherwise was to be purchased by such Potential Beneficial Owner. In such event,
the number of AMPS to be so delivered shall be determined solely by such
Broker-Dealer. Delivery of such lesser number of shares shall constitute good
delivery. Notwithstanding the foregoing terms of this paragraph (f), any
delivery or non-delivery of shares which shall represent any departure from the
results of an Auction, as determined by the Auction Agent, shall be of no effect
unless and until the Auction Agent shall have been notified of such delivery or
non-delivery in accordance with the provisions of the Auction Agent Agreement
and the Broker-Dealer Agreements.
B-3