FORM OF BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of August [__], 2004, is between
Deutsche Bank Trust Company Americas (the "Auction Agent") (not in its
individual capacity, but solely as agent of First Trust/Four Corners Senior
Floating Rate Income Fund II (the "Fund")), pursuant to authority granted to it
in the Auction Agency Agreement between the Fund and the Auction Agent dated as
of August [__], 2004 (the "Auction Agency Agreement") and _______ (together with
its successors and assigns, the "Broker-Dealer").
The Fund proposes to issue an aggregate amount of 4,000 shares of its
Auction Market Preferred Shares Series A and B, $0.01 par value per share,
liquidation preference of $25,000 per share (the "AMPS"), authorized by, and
subject to the terms and conditions of, the Statement Establishing and Fixing
the Rights and Preferences of Auction Market Preferred Shares (the "Statement").
The Statement provides that for each Rate Period of outstanding series
of AMPS following the initial Rate Period, the Applicable Rate for each series
of AMPS shall be equal to the rate per annum that results from an Auction for
outstanding shares of each series of AMPS. The Board of Trustees of the Fund has
adopted resolutions appointing Deutsche Bank Trust Company Americas as Auction
Agent for purposes of the Auction Procedures, and pursuant to Section 2.5 of the
Auction Agency Agreement, the Fund has requested and directed the Auction Agent
to execute and deliver this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Auction Agent and Broker-Dealer agree as
follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
Section 1.1 Terms Defined by Reference to the Statement. Capitalized
terms used herein but not defined herein shall have the respective meanings
specified in the Statement.
Section 1.2 Terms Defined Herein. As used herein, the following terms
shall have the following meanings, unless the context otherwise requires:
(a) "Auction" shall have the meaning specified in Section 2.1
of the Auction Agency Agreement.
(b) "Auction Procedures" shall mean the procedures as from
time to time in effect for conducting Auctions that are set forth Part
II of the Statement.
(c) "Authorized Officer" shall mean each Vice President,
Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent designated as an
"Authorized Officer" for purposes hereof in a written communication
from the Auction Agent to the Fund.
(d) "Broker-Dealer Officer" shall mean each officer or
employee of a Broker-Dealer designated as a "Broker-Dealer Officer" for
purposes of this Agreement in a written communication to the Auction
Agent.
(e) "Broker-Dealer Agreement" shall mean this Agreement and
any substantially similar agreement between the Auction Agent and a
Broker-Dealer.
(f) "Statement" shall mean the Statement Establishing and
Fixing the Rights and Preferences of Auction Market Preferred Shares in
effect at the time the Registration Statement relating to the AMPS is
declared effective by the Securities and Exchange Commission,
specifying the powers, preferences and rights of the AMPS.
Section 1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules shall apply to the
construction of this Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a Part of this
Agreement, nor shall they affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be
to New York City time.
II. NOTIFICATION OF DIVIDEND.
The provisions contained in Section 4 of Part I of the Statement
concerning the notification of a Special Rate Period will be followed by the
Auction Agent and Broker-Dealer, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
Part of this Agreement to the same extent as if such provisions were set forth
fully herein.
III. THE AUCTION.
Section 3.1 Purpose; Incorporation by Reference of Auction Procedures.
(a) On each Auction Date, the provisions of the Auction
Procedures will be followed by the Auction Agent for the purpose of
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determining the Applicable Rate for the AMPS for the next Rate Period.
Each periodic operation of such procedures is hereinafter referred to
as an "Auction."
(b) All of the provisions contained in the Auction Procedures
are incorporated herein by reference in their entirety and shall be
deemed to be a Part of this Agreement to the same extent as if such
provisions were set forth fully herein.
(c) Broker-Dealer agrees to act as, and assumes the
obligations of and limitations and restrictions placed upon, a
Broker-Dealer under this Agreement. Broker-Dealer understands that
other persons meeting the requirements specified in the definition of
"Broker-Dealer" contained in Section 17 of the Statement may execute a
Broker-Dealer Agreement and participate as Broker-Dealers in Auctions.
(d) Broker-Dealer and other Broker-Dealers may participate in
Auctions for their own accounts. However, the Fund, by notice to
Broker-Dealer and all other Broker-Dealers, may prohibit all
Broker-Dealers from submitting Bids in Auctions for their own accounts,
provided that Broker-Dealers may continue to submit Hold Orders and
Sell Orders. The Auction Agent shall have no duty or liability in
monitoring this Section 3.1(d).
Section 3.2 Preparation for Each Auction.
(a) Not later than 9:30 a.m. on each Auction Date for the
AMPS, the Auction Agent shall advise Broker-Dealer by telephone of the
Reference Rate and the Maximum Rate in effect on such Auction Date.
(b) In the event that the Auction Date for any Auction shall
be changed after the Auction Agent has given the notice referred to in
paragraph (a) of the settlement procedures set forth on Exhibit A
hereto (the "Settlement Procedures"), the Auction Agent, by such means
as the Auction Agent reasonably deems practicable, shall give notice of
such change to Broker-Dealer not later than the earlier of 9:15 a.m. on
the new Auction Date or 9:15 a.m. on the old Auction Date. Thereafter,
Broker-Dealer promptly shall notify customers of Broker-Dealer that
Broker-Dealer believes are Beneficial Owners of AMPS of such change in
the Auction Date.
(c) The Auction Agent from time to time may request
Broker-Dealer to provide it with a list of the respective customers
Broker-Dealer believes are Beneficial Owners of AMPS. Broker-Dealer
shall comply with any such request, and the Auction Agent shall keep
confidential any such information, including information received as to
the identity of Bidders in any Auction, and shall not disclose any such
information so provided to any Person other than the Fund; and such
information shall not be used by the Auction Agent or its officers,
employees, agents or representatives for any purpose other than such
purposes as are described herein. Notwithstanding the foregoing, the
Auction Agent reserves the right and is authorized to disclose any such
information if (a) it is ordered to do so by a court of competent
jurisdiction or a regulatory body, judicial or quasi-judicial agency or
authority having the authority to compel such disclosure or (b) it is
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advised by its counsel that its failure to do so would be unlawful. In
the event that the Auction Agent is required to disclose information in
accordance with the foregoing sentence, it shall provide written notice
of such requirement to Broker-Dealer as promptly as practicable. The
Auction Agent shall transmit any list of customers Broker-Dealer
believes are Beneficial Owners of AMPS and information related thereto
only to its officers, employees, agents or representatives who need to
know such information for the purposes of acting in accordance with
this Agreement, and the Auction Agent shall prevent the transmission of
such information to others and shall cause its officers, employees,
agents and representatives to abide by the foregoing confidentiality
restrictions.
Section 3.3 Auction Schedule; Method of Submission of Orders.
(a) The Fund and the Auction Agent shall conduct Auctions for
the AMPS in accordance with the schedule set forth below. Such schedule
may be changed at any time by the Auction Agent with the consent of the
Fund, which consent shall not be withheld unreasonably. The Auction
Agent shall give written notice of any such change to Broker-Dealer.
Such notice shall be received 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. The Auction Agent shall advise the Fund and
the Broker-Dealers of the Reference Rate
and the Maximum Rate as set forth in
Section 3.2(a) hereof.
9:30 a.m. - 1:30 p.m. The Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 2 of Part II of the
Statement. Submission Deadline is 1:30 p.m.
Not earlier than 1:30 p.m. The Auction Agent shall make determinations
pursuant to Section 3 of Part II of the
Statement.
By approximately 3:30 p.m. The Auction Agent shall advise the Fund of
the results of the Auction as provided in
Section 3(b) of Part II of the Statement.
Submitted Bids and Submitted Sell Orders
will be accepted and rejected in whole or
in Part and AMPS will be allocated as
provided in Section 4 of Part II of the
Statement. The Auction Agent shall give
notice of the Auction results as set forth
in Section 3.4(a) hereof.
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(b) Broker-Dealer agrees to maintain a list of Potential
Beneficial Owners for the purposes set forth in Section 1(a)(ii) of
Part II of the Statement.
(c) Broker-Dealer shall submit Orders to the Auction Agent in
writing in substantially the form attached hereto as Exhibit B.
Broker-Dealer shall submit separate Orders to the Auction Agent for
each Potential Beneficial Owner or Beneficial Owner on whose behalf
Broker-Dealer is submitting an Order and shall not net or aggregate the
Orders of Potential Beneficial Owners or Beneficial Owners on whose
behalf Broker-Dealer is submitting Orders.
(d) Broker-Dealer shall deliver to the Auction Agent (i) a
written notice, substantially in the form attached hereto as Exhibit C,
of transfers of AMPS, made through Broker-Dealer by an Existing Holder
to another Person other than pursuant to an Auction, and (ii) a written
notice, substantially in the form attached hereto as Exhibit D, of the
failure of AMPS to be transferred to or by any Person that purchased or
sold AMPS through Broker-Dealer pursuant to an Auction. The Auction
Agent is not required to accept any notice delivered pursuant to the
terms of the foregoing sentence with respect to an Auction unless it is
received by the Auction Agent by 3:00 p.m. on the Business Day
preceding the applicable Auction Date.
Section 3.4 Notice of Auction Results.
(a) On each Auction Date, the Auction Agent shall provide to
Broker-Dealer the notice required by paragraph (a) of the Settlement
Procedures. By approximately 11:30 a.m. on the Business Day next
succeeding such Auction Date, the Auction Agent shall notify
Broker-Dealer in writing of the disposition of all Orders submitted by
Broker-Dealer in the Auction held on such Auction Date.
(b) Broker-Dealer shall notify each Beneficial Owner,
Potential Beneficial Owner, Existing Holder or Potential Holder on
whose behalf Broker-Dealer has submitted an Order as set forth in
paragraph (b) of the Settlement Procedures, and take such other action
as is required of Broker-Dealer pursuant to the Settlement Procedures.
If any Beneficial Owner or Existing Holder selling AMPS in an
Auction fails to deliver such AMPS, the Broker-Dealer of any Person
that was to have purchased AMPS in such Auction may deliver to such
Person a number of whole AMPS that is less than the number of AMPS that
otherwise was to be purchased by such Person. In such event, the number
of AMPS to be so delivered shall be determined by such Broker-Dealer.
Delivery of such lesser number of AMPS shall constitute good delivery.
Upon the occurrence of any such failure to deliver AMPS, such
Broker-Dealer shall deliver to the Auction Agent the notice required by
Section 3.3(d)(ii) hereof. Notwithstanding the foregoing terms of this
Section 3.4(b), any delivery or non-delivery of AMPS which represents
any departure from the results of an Auction, as determined by the
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Auction Agent, shall be of no effect unless and until the Auction Agent
shall have been notified of such delivery or non-delivery in accordance
with the terms of Section 3.3(d) hereof.
Section 3.5 Service Charge to be Paid to Broker-Dealer.
Not later than 12:00 p.m. on each Dividend Payment Date, the Auction
Agent after each Auction will pay to each Broker-Dealer, from funds provided by
the Fund, a service charge in the amount equal to: (i) in the case of any
Auction immediately preceding a Rate Period of less than one year, the product
of (A) a fraction the numerator of which is the number of days in the Rate
Period (calculated by counting the first day of such Rate Period but excluding
the last day thereof) and the denominator of which is 360, times (B) 1/4 of 1%,
times (C) $25,000 times (D) the sum of the aggregate number of AMPS placed by
such Broker-Dealer, or (ii) the amount mutually agreed upon by the Fund and the
Broker-Dealers, 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, respectively, at the commencement of the Rate Period
with respect to such Auction, in the case of any Auction immediately preceding a
Rate Period of one year or longer. For the purposes of the preceding sentence,
the AMPS shall be placed by a Broker-Dealer if such shares were (i) the subject
of Hold Orders deemed to have been submitted to the Auction Agent by the
Broker-Dealer and were acquired by the Broker-Dealer for its own account or were
acquired by the Broker-Dealer for its customers who are Beneficial Owners or
(ii) the subject of an Order submitted by the Broker-Dealer that is (a) a
Submitted Bid of an Existing Holder that resulted in the Existing Holder
continuing to hold the shares as a result of the Auction or (b) a Submitted Bid
of a Potential Holder that resulted in the Potential Holder purchasing the
shares as a result of the Auction or (iii) a valid Hold Order. For the avoidance
of doubt, only one Broker-Dealer shall be considered to have placed a particular
Preferred Share at any particular Auction for purposes of this Section 3.5.
IV. THE AUCTION AGENT.
Section 4.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund
hereunder and owes no fiduciary duties to any Person.
(d) The Auction Agent undertakes to perform such duties and
only such duties as are set forth specifically in this Agreement, and
no implied covenants or obligations shall be read into this Agreement
against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or
omitted by it, or for any error of judgment made by it in the
performance of its duties under this Agreement. The Auction Agent shall
not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining (or failing to
ascertain) the pertinent facts.
Section 4.2 Rights of the Auction Agent.
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(a) The Auction Agent may conclusively rely upon, and shall be
fully protected in acting or refraining from acting in accordance with,
any communication authorized by this Agreement and any proper written
instruction, notice, request, direction, consent, report, certificate,
share certificate or other instrument, paper or document reasonably
believed by it to be genuine and appropriately authorized. The Auction
Agent shall not be liable for acting upon any telephone communication
authorized by this Agreement which the Auction Agent reasonably
believes in good faith, after reasonable inquiry, to have been given by
the Fund or by a Broker-Dealer. The Auction Agent may record telephone
communications with the Fund or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice,
and the advice of such counsel, shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by the Auction Agent hereunder in good faith and in
reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance, expend
or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys.
(e) The Auction Agent shall not be required to, and does not,
make any representations as to the validity, accuracy, value or
genuineness of any signatures or endorsements, other than its own and
those of its authorized officers.
(f) Any corporation into which the Auction Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Auction Agent shall be a party, or any corporation succeeding to the
business of the Auction Agent shall be the successor of the Auction
Agent hereunder, with the consent of the Fund but without the execution
or filing of any paper with any party hereto or any further act on the
Part of any of the parties hereto, except where any instrument of
transfer or assignment may be required by law to effect such
succession, anything herein to the contrary notwithstanding.
(g) All the rights, privileges, immunities and protections
granted to the Auction Agent herein are deemed granted to the Paying
Agent and Deutsche Bank Trust Company Americas in any of the capacities
it undertakes in connection with this Agreement.
(h) Whenever in the administration of the provisions of this
Agreement, the Auction Agent shall deem it necessary or desirable that
a matter be proved or established prior to taking or suffering any
action to be taken hereunder, such matter, in the absence of negligence
or bad faith on the Part of the Auction Agent, shall be deemed to be
conclusively proved and established by a certificate describing the
action requested of the Fund or the Broker-Dealer, signed by the Fund
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or the Broker-Dealer, respectively, and delivered to the Auction Agent
and such certificate, in the absence of negligence or bad faith on the
Part of the Auction Agent, shall be full warrant to the Auction Agent
for any action taken or omitted by it under the provisions of this
Agreement upon the faith thereof. Upon receipt of any such certificate
signed by the Fund or the Broker-Dealer, the Auction Agent shall
promptly provide a copy of said certificate to the Broker-Dealer or the
Fund, respectively. The Auction Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, entitlement, order, approval or other paper or document
furnished by the Fund or the Broker-Dealer, except to the extent that
such failure to investigate would be deemed grossly negligent.
V. MISCELLANEOUS.
Section 5.1 Termination.
Any party may terminate this Agreement at any time upon five days'
prior written notice to the other party; provided, however, that if the
Broker-Dealer is Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, or the
Auction Agent may not terminate this Agreement without first obtaining the prior
written consent of the Fund, which consent shall not be withheld unreasonably.
This Agreement shall automatically terminate upon the redemption of all
outstanding AMPS or upon termination of the Auction Agency Agreement.
Section 5.2 Force Majeure.
Neither party to this Agreement shall be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
acts of terrorism; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications services; accidents; labor disputes;
acts of civil or military authority or governmental actions; it being understood
that the parties shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
Section 5.3 Participant in Securities Depository; Payment of Dividends
in Same-Day Funds.
(a) Broker-Dealer is at the date hereof, and shall remain for the term
of this Agreement, a member of, or a participant in, the Securities Depository
(or an affiliate of such a member or participant).
(b) Broker-Dealer represents that it (or if Broker-Dealer does not act
as Agent Member, one of its affiliates) shall make all dividend payments on the
AMPS available in same-day funds on each Dividend Payment Date to customers that
use Broker-Dealer (or its affiliate) as Agent Member.
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Section 5.4 Communications.
Except for (i) communications authorized to be made by telephone
pursuant to this Agreement or the Auction Procedures and (ii) communications
with the Auctions (other than those expressly required to be made in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party at its address or telecopier number set forth below:
If to the Auction Agent, addressed to:
Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Mail Stop NYC60 2715
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Broker-Dealer, addressed to:
Telephone:
Facsimile:
or such other address or facsimile as such party hereafter may specify for such
purpose by notice to the other party. Each such notice, request or communication
shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of Broker-Dealer by a Broker-Dealer
Officer and on behalf of the Auction Agent by an Authorized Officer.
Broker-Dealer may record telephone communications with the Auction Agent.
Section 5.5 Entire Agreement.
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.
Section 5.6 Benefits.
Nothing in this Agreement, express or implied, shall give to any
person, other than the Fund, which is a third party beneficiary of this
Agreement, the Auction Agent and Broker-Dealer and their respective successors
and permitted assigns, any benefit of any legal or equitable right, remedy or
claim under this Agreement.
Section 5.7 Amendment; Waiver.
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(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by a duly authorized
representative of the party to be charged.
(b) Failure of either party to this Agreement to exercise any
right or remedy hereunder in the event of a breach of this Agreement by
the other party shall not constitute a waiver of any such right or
remedy with respect to any subsequent breach.
Section 5.8 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of
Broker-Dealer and the Auction Agent. This Agreement may not be assigned by
either party hereto absent the prior written consent of the other party.
Section 5.9 Severability.
If any clause, provision or Section of this Agreement shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or Section shall not affect any
remaining clause, provision or Section hereof.
Section 5.10 Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
Section 5.11 Governing Law, Jurisdiction, Waiver of Trial By Jury.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW, OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF NEW YORK). THE PARTIES AGREE HERETO THAT ALL ACTIONS AND
PROCEEDINGS ARISING OUT OF THIS BROKER-DEALER AGREEMENT OR ANY TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE BROUGHT IN THE COURTS LOCATED IN THE BOROUGH OF
MANHATTAN, CITY OF NEW YORK, STATE OF NEW YORK.
EACH PARTY WAIVES ANY OBJECTION THAT IT MAY HAVE THAT SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN THE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF
NEW YORK AND STATE OF NEW YORK WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME. [EACH OF THE PARTIES HERETO ALSO IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
By:_____________________________________
Name:___________________________________
Title:__________________________________
[Broker-Dealer]
By:_____________________________________
Name:___________________________________
Title:__________________________________
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EXHIBIT A
SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings
specified in the Statement.
(a) On each Auction Date, the Auction Agent shall notify by
telephone, or through the Auction Agent's auction processing system,
the Broker-Dealers that participated in the Auction held on such
Auction Date and submitted an Order on behalf of any Beneficial Owner
or Potential Beneficial Owner of:
(i) the Applicable Rate fixed for the next succeeding Rate
Period;
(ii) whether Sufficient Clearing Bids existed for the
determination of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer")
submitted a Bid or a Sell Order on behalf of a Beneficial Owner, the
number of 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 AMPS 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 AMPS 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
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(vii) the Auction Date of the next succeeding Auction with
respect to the AMPS.
(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 AMPS and advise
such Potential Beneficial Owner of the Applicable Rate for the next
succeeding Rate 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 Rate Period;
(iii) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate for the
next succeeding Rate Period;
(iv) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted an Order of the Auction Date for the next
succeeding Auction; and
(v) advise each Potential Beneficial Owner on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole or in
part, of the Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to
(a) above, each Broker-Dealer that submitted a Bid or a Sell Order on
behalf of a Potential Beneficial Owner or a Beneficial Owner shall, in
such manner and at such time or times as in its sole discretion it may
determine, allocate any funds received by it pursuant to (b)(i) above
and any 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:
A-2
(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 AMPS to such Broker-Dealer pursuant to (b)(ii) above
the amount necessary to purchase such AMPS against receipt of such
AMPS, and (B) deliver such AMPS through the Securities Depository to a
Buyer's Broker-Dealer (or its Agent Member) identified to such Seller's
Broker-Dealer pursuant to (a)(v) above against payment therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent Member
of the Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to a Seller's Broker-Dealer (or its
Agent Member) identified pursuant to (a)(vi) above the amount necessary
to purchase the AMPS to be purchased pursuant to (b)(i) above against
receipt of such AMPS, and (B) deliver such AMPS through the Securities
Depository to the Agent Member of the purchaser thereof against payment
therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d)(i) above
shall instruct the Securities Depository to execute the transactions
described in (b)(i) or (ii) above, and the Securities Depository shall
execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in (d)(ii) above, and the Securities Depository shall execute
such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in (d)(iii) above, and the Securities Depository shall
execute such transactions.
(f) If a Beneficial Owner selling AMPS in an Auction fails to
deliver such AMPS (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 AMPS 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 AMPS shall constitute good delivery.
Notwithstanding the foregoing terms of this paragraph (f), any delivery
or non-delivery of AMPS which shall represent any departure from the
results of an Auction, as determined by the Auction Agent, shall be of
no effect unless and until the Auction Agent shall have been notified
of such delivery or non-delivery in accordance with the provisions of
the Auction Agency Agreement and the Broker-Dealer Agreements.
A-3
EXHIBIT B
AUCTION BID FORM
Submit To: Issue:
Auction Rate Preferred Shares
("AMPS") of First Trust/Four Corners
Senior Floating Rate Income Fund II
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder: _________________________
BENEFICIAL OWNER
Shares now held ______________________ HOLD __________________
BID at rate of_______________________
SELL ________________________________
POTENTIAL BENEFICIAL OWNER
# of AMPS___________
BID at rate of___________
Notes:
(1) If submitting more than one Bid for one Bidder, use additional Auction
Bid Forms.
(2) If one or more Bids covering in the aggregate more than the number of
outstanding AMPS held by any Beneficial Owner are submitted, such bid
shall be considered valid in the order of priority set forth in the
Auction Procedures on the above issue.
(3) A Hold or Sell Order may be placed only by a Beneficial Owner covering
a number of AMPS not greater than the number of AMPS currently held.
(4) Potential Beneficial Owners may make only Bids, each of which must
specify a rate. If more than one Bid is submitted on behalf of any
Potential Beneficial Owner, each Bid submitted shall be a separate Bid
with the rate specified.
(5) Bids may contain no more than three figures to the right of the decimal
point (.001 of 1%). Fractions will not be accepted.
B-1
(6) An Order must be submitted in whole AMPS of AMPS with an aggregate
liquidation preference of $25,000.
_________________________________________
Authorized Signature:_____________________
Name:_____________________________________
Title:____________________________________
B-2
EXHIBIT C
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: _________________________________________________________________
("AMPS")
We are (check one):
[ ] the Existing Holder named below;
[ ] the Broker-Dealer for such Existing Holder; or
[ ] the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred _______
AMPS to _________________________
_______________________________________
(Name of Existing Holder)
_______________________________________
(Name of Broker-Dealer)
_______________________________________
(Name of Agent Member)
By:_____________________________
Printed Name:_____________________
Title:_____________________________
C-1
EXHIBIT D
(Note: To be used only for failures to deliver or to pay for
AMPS sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for _____________________ (the "Purchaser"),
which purchased _____ AMPS of _____________________________________________ in
the Auction held on ____________________ from the seller of such AMPS.
We hereby notify you that (check one):
______ the Seller failed to deliver such AMPS to the Purchaser.
______ the Purchaser failed to make payment to the Seller upon delivery
of such AMPS.
Name________________________________
By:_________________________________
Printed Name:_______________________
Title:______________________________
D-1
