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Form of
AUCTION AGENCY AGREEMENT
dated as of August [__], 2004
relating to the
Auction Market Preferred Shares
Series A and Series B
of
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
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AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of August
[__], 2004, is between First Trust/Four Corners Senior Floating Rate Income Fund
II (the "Fund") and Deutsche Bank Trust Company Americas.
The Fund proposes to issue an aggregate amount of 4,000 shares of its
Auction Market Preferred Shares Series A and Series 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 Fund desires that Deutsche Bank Trust Company Americas perform
certain duties as agent in connection with each Auction of AMPS (in such
capacity, the "Auction Agent"), and as the transfer agent, registrar, dividend
paying agent and redemption agent with respect to the AMPS (in such capacity,
the "Paying Agent"), upon the terms and conditions set forth in this Agreement,
and the Fund hereby appoints Deutsche Bank Trust Company Americas as said
Auction Agent and Paying Agent in accordance with these terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:
ARTICLE 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. Certain Defined Terms. As used herein and in the
Settlement Procedures, the following terms shall have the following meanings,
unless the context otherwise requires:
(a) "Agent Member" shall mean a member of, or participant in,
the Securities Depository that will act on behalf of a Beneficial Owner
of one or more AMPS or on behalf of a Potential Beneficial Owner.
(b) "Auction" shall have the meaning specified in Section 2.1
hereof.
(c) "Auction Procedures" shall mean the procedures as from
time to time in effect for conducting Auctions that are set forth in
Part II of the Statement.
(d) "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.
(e) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a broker-dealer substantially in the form
attached hereto as Exhibit A.
(f) "Closing" shall mean the date the Fund consummates the
transactions for the issuance and sale of the AMPS.
(g) "Fund Officer" shall mean 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 each Assistant Treasurer of the
Fund and every other officer or employee of the Fund designated as a
"Fund Officer" for purposes hereof in a notice from the Fund to the
Auction Agent.
(h) "Holder" means, with respect to AMPS, a registered holder
of AMPS as the same appears on the share ledger or share records of the
Fund.
(i) "Rate Multiple" shall have the meaning assigned to it in
Section 2.10.
(j) "Settlement Procedures" shall mean the Settlement
Procedures attached as Exhibit A to the Broker-Dealer Agreement.
(k) "Statement" shall mean the Statement Establishing and
Fixing the Rights and Preferences of Auction Market Preferred Shares of
the Fund 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.
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ARTICLE II
THE AUCTION
Section 2.1. Purpose; Incorporation by Reference of Auction Procedures
and Settlement Procedures. (a) The Board of Trustees of the Fund has adopted a
resolution appointing Deutsche Bank Trust Company Americas 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 (i) the
procedures set forth in this Section 2 and (ii) the Auction Procedures for the
purpose of determining the Applicable Rate for the AMPS for any subsequent 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 and in
the Settlement 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.
Section 2.2. Preparation for Each Auction; Maintenance of Registry of
Existing Holders. (a) As of the date hereof, the Fund shall provide the Auction
Agent with a list of the Broker-Dealers and shall deliver to the Auction Agent
for execution by the Auction Agent a Broker-Dealer Agreement signed by each such
Broker-Dealer. The Auction Agent shall keep such list current and accurate and
shall indicate thereon the identity of each Existing Holder, if any, whose most
recent Order was submitted and resulted in such Existing Holder continuing to
hold or purchase AMPS. Not later than five Business Days prior to any Auction
Date for which any change in such list of Broker-Dealers is to be effective, the
Fund shall notify the Auction Agent in writing of such change and, if any such
change is the addition of a Broker-Dealer to such list, the Fund 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 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 the Auction Date for any Auction shall be changed
after the Auction Agent shall have given the notice referred to in clause (vii)
of paragraph (a) of the Settlement Procedures, 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) The provisions contained in Section 4(b) of Part I of the Statement
concerning Special Rate Periods and the notification of a Special Rate Period
will be followed by the Fund 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.
(d) On each Auction Date, the Auction Agent shall determine the
Reference Rate and the Maximum Rate. Not later than 9:30 a.m. on each Auction
Date, the Auction Agent shall notify the Fund and the Broker-Dealers of the
Reference Rate and the Maximum Rate in effect on such Auction Date.
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(e) (i) The Auction Agent shall maintain a current registry of the
Existing Holders of the AMPS for purposes of each individual Auction based on
the information provided to it from time to time by the Broker-Dealer. The Fund
shall use commercially reasonable efforts to provide or cause to be provided to
the Auction Agent within ten Business Days following the date of the Closing a
list of the initial Existing Holders of AMPS, the number of shares purchased by
each such Existing Holder and the respective Broker-Dealer of each such Existing
Holder through which such Existing Holder purchased such AMPS. The Auction Agent
may rely upon, as conclusive evidence of the identities of the Existing Holders,
such list, the results of each Auction and notices from any Existing Holder, the
Agent Member of any Existing Holder or the Broker-Dealer of any Existing Holder
with respect to such Existing Holder's transfer of any AMPS to another Person.
(ii) In the event of any partial redemption of AMPS, upon notice by the
Fund to the Auction Agent of such partial redemption, the Auction Agent promptly
shall request the Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers of AMPS) from the
accounts of which AMPS have been called for redemption and the person or
department at such Agent Member to contact regarding such redemption. At least
two Business Days prior to the Auction preceding the date of redemption, the
Auction Agent shall request each Agent Member so identified to disclose to the
Auction Agent (upon selection by such Agent Member of the Existing Holders whose
AMPS are to be redeemed) the number of AMPS of each such Existing Holder, if
any, to be redeemed by the Fund, provided that the Auction Agent has been
furnished with the name and telephone number of a person or department at such
Agent Member from which it is to request such information. In the absence of
receiving any such information with respect to an Existing Holder, from such
Existing Holder's Agent Member or otherwise, the Auction Agent may continue to
treat such Existing Holder as having ownership of the number of AMPS shown in
the Auction Agent's registry of Existing Holders.
(iii) The Auction Agent shall register a transfer of the ownership of
AMPS from an Existing Holder to another Existing Holder, or to another Person if
permitted by the Fund, only if (A) such transfer is made pursuant to an Auction
or (B) if such transfer is made other than pursuant to an Auction, the Auction
Agent has been notified of such transfer in writing, in a notice substantially
in the form of Exhibit C to the Broker-Dealer Agreement, by such Existing Holder
or by the Agent Member of such Existing Holder only to or through a
Broker-Dealer that has entered into a Broker-Dealer Agreement with the Auction
Agent and the Fund or other persons as the Fund permits. The Auction Agent is
not required to accept any notice of transfer delivered for an Auction unless it
is received by the Auction Agent by 3:00 p.m. on the Business Day preceding the
Auction. The Auction Agent shall rescind a transfer made on the registry of the
Existing Holders of any AMPS if the Auction Agent has been notified in writing,
in a notice substantially in the form of Exhibit D to the Broker-Dealer
Agreement, by the Agent Member or the Broker-Dealer of any Person that (i)
purchased any AMPS and the seller failed to deliver such AMPS or (ii) sold any
AMPS and the purchaser failed to make payment to such Person upon delivery to
the purchaser of such AMPS.
(f) The Auction Agent may, but shall have no obligation to, request
that the Broker-Dealers, as set forth in Section 3.2(b) of the Broker-Dealer
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Agreements, provide the Auction Agent with a list of their respective customers
that such Broker-Dealers believe are Beneficial Owners of AMPS. The Auction
Agent shall keep confidential any such information and shall not disclose any
such information so provided to any Person other than the Broker-Dealer that
provided such information and the Fund, provided that the Auction Agent reserves
the right 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 its counsel in writing that its failure to do so would be unlawful.
Section 2.3. Auction Schedule. The Auction Agent shall conduct Auctions
on the Business Day immediately prior to the start of each Rate Period in
accordance with the schedule set forth below. Such schedule may be changed by
the Auction Agent with the consent of the Fund, which consent shall not be
withheld unreasonably. The Auction Agent shall give written notice of any such
change to each 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 2.2(d) 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 Bid Orders 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 2.4 hereof.
Section 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 Rate Period for the related AMPS by telephone or
other electronic means acceptable to the parties. The Auction Agent, unless
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instructed otherwise in writing by the Fund, is authorized to release the
Winning Bid Rate after each auction for public dissemination.
Section 2.5. Broker-Dealers. (a) Not later than 12:00 noon on each
Auction Date of AMPS, the Fund 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 3.5 of the Broker-Dealer Agreements for AMPS. The Auction Agent shall
apply such moneys as set forth in Section 3.5 of each such Broker-Dealer
Agreement.
(b) The Fund shall not designate any Person to act as a Broker-Dealer,
or permit an Existing Holder or a Potential Beneficial Owner to participate in
Auctions through any Person other than a Broker-Dealer, without the prior
written approval of the Auction Agent, which approval shall not be withheld
unreasonably. Notwithstanding the foregoing, the Fund may designate an Affiliate
or Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund, provided that at least one
Broker-Dealer Agreement would be in effect for each series of AMPS after such
termination.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time to
time shall enter into such Broker-Dealer Agreements as the Fund shall request in
writing.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
Section 2.6 Special Rate Periods. The provisions contained in Section
4 of the Statement concerning Special Rate Periods and the notification of a
Special Rate Period will be followed by the Fund 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.
Section 2.7 Determination of Maximum Rate. (a) (i) On each Auction
Date, the Auction Agent shall determine the Maximum Rate. If any Reference Rate
is not quoted on an interest or bond equivalent, as the case may be, basis, the
Auction Agent shall convert the quoted rate to the interest or bond equivalent
thereof as set forth in the definition of such rate in the Statement if the rate
obtained by the Auction Agent is quoted on a discount basis, or if such rate is
quoted on a basis other than an interest or bond equivalent or discount basis
the Auction Agent shall convert the quoted rate to an interest or bond
equivalent rate after consultation with the Fund as to the method of such
conversion.
(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 Fund so that the Fund
can determine whether to select a Substitute U.S. Government Securities Dealer
or Substitute U.S. Government Dealers to provide the quotation or quotations not
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being supplied by any U.S. Government Securities Dealer or U.S. Government
Securities Dealers. The Fund shall promptly advise the Auction Agent of any such
selection.
If any LIBOR Rate is to be determined by reference to Telerate Page
3750 or by rate quotations provided by LIBOR Dealer(s), as the case may be, and
Telerate Page 3750 is unavailable or the LIBOR Dealer(s) failed to provide rate
quotations, as the case may be (as described in the Statement), then the Auction
Agent shall immediately notify the Fund so that the Fund can determine whether
to select a Substitute LIBOR Dealer(s) to provide such rate quotation(s) not
being supplied. The Fund shall promptly advise the Auction Agent of any such
selection.
Section 2.8. Ownership of AMPS and Submission of Bids by the Fund and
Its Affiliates. Neither the Fund nor any Affiliate of the Fund may submit an
Order in any Auction, except that an Affiliate of the Fund that is a
Broker-Dealer may submit an Order 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 Fund 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 Fund. The Fund shall notify the Auction Agent if the Fund or, to the best of
the Fund's knowledge, any Affiliate of the Fund becomes a Beneficial Owner of
any AMPS. The restrictions in this Section 2.8 shall in no way limit the
activities of the Auction Agent. The Auction Agent shall have no duty or
liability with respect to enforcement of this Section 2.8.
Section 2.9. Access to and Maintenance of Auction Records. The Auction
Agent shall afford to the Fund, its agents, independent public accountants and
counsel, at reasonable times during normal business hours, to review and make
extracts or copies of (at the Fund's sole cost and expense), access to all
books, records, documents and other information concerning the conduct and
results of Auctions, provided that any such agent, accountant or counsel shall
furnish the Auction Agent with a letter from the Fund requesting that the
Auction Agent afford such person access. The Auction Agent shall maintain
records relating to any Auction for a period of at least two years after such
Auction, and such records, in reasonable detail, shall accurately and fairly
reflect the actions taken by the Auction Agent hereunder. The Fund agrees to
keep confidential any information regarding the customers of any Broker-Dealer
received from the Auction Agent in connection with this Agreement or any
Auction, and shall not disclose such information or permit the disclosure of
such information without the prior written consent of the applicable
Broker-Dealer to anyone except such agent, accountant or counsel engaged to
audit or review the results of Auctions as permitted by this Section 2.9. The
Fund reserves the right to disclose any such information if it is ordered to do
so by a court of competent jurisdiction or a regulatory body, judicial or
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quasi-judicial agency or authority having authority to compel such disclosure,
or if it is advised by its counsel that its failure to do so would be unlawful.
Any such agent, accountant or counsel, before having access to such information,
shall agree to keep such information confidential and not to disclose such
information or permit disclosure of such information without the prior written
consent of the applicable Broker-Dealer, provided that such agent, accountant or
counsel may reserve the right to disclose any such information if it is ordered
to do so by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having authority to compel such disclosure,
or if it is advised by its counsel that its failure to do so would be unlawful.
Section 2.10. Information Concerning Rates. If there is any change in
the credit rating of AMPS by a rating agency (or substitute or successor rating
agencies) then rating the AMPS that results in any change in the applicable
percentage of the Reference Rate for AMPS (the "Rate Multiple"), the Fund shall
notify the Auction Agent of such change in the Rate Multiple prior to the
Auction Date. In determining the Maximum Rate on any Auction Date, the Auction
Agent shall be entitled to rely on the last Rate Multiple for AMPS of which it
has most recently received notice from the Fund.
ARTICLE III
THE AUCTION AGENT AS PAYING AGENT
Section 3.1. The Paying Agent. The Board of Trustees of the Fund has
adopted resolutions appointing Deutsche Bank Trust Company Americas as Auction
Agent and Paying Agent. The Paying Agent hereby accepts such appointment and
agrees to act in accordance with its standard procedures and the provisions of
the Statement which are specified herein with respect to the AMPS and as set
forth in this Section 3.
Section 3.2. The Fund's Notices to the Paying Agent. Whenever any AMPS
are to be redeemed, the Fund shall mail a Notice of Redemption by first-class
mail, postage prepaid, to each Holder of AMPS being redeemed and to the Paying
Agent pursuant to Section 3(b) of Part I of the Statement.
Section 3.3. The Fund to Provide Funds for Dividends and Redemptions.
(a) Not later than 12:00 noon on the Business Day preceding each Dividend
Payment Date, the Fund shall deposit with the Paying Agent an aggregate amount
of Federal Funds or similar same-day funds equal to the declared dividends to be
paid to Holders on such Dividend Payment Date and shall give the Paying Agent
irrevocable instructions to apply such funds to the payment of such dividends on
such Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then by 12:00 noon
on the date fixed for redemption, the Fund shall deposit in trust with the
Paying Agent an aggregate amount of Federal Funds or similar same-day funds
sufficient to redeem such AMPS called for redemption and shall give the Paying
Agent irrevocable instructions and authority to pay the redemption price to the
Holders of AMPS called for redemption upon surrender of the certificate or
certificates therefor.
Section 3.4. Disbursing Dividends and Redemption Price. After receipt
of the Federal Funds or similar same-day funds and instructions from the Fund
described in Section 3.3 above, the Paying Agent shall pay to the Holders (or
former Holders) entitled thereto (i) on each corresponding Dividend Payment
Date, dividends on the AMPS, and (ii) on any date fixed for redemption, the
Redemption Price of any AMPS called for redemption. The amount of dividends for
any Rate Period to be paid by the Paying Agent to Holders will be determined by
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the Fund as set forth in Section 2 of Part I of the Statement. The Redemption
Price to be paid by the Paying Agent to the Holders of any AMPS called for
redemption will be determined as set forth in Section 3 of Part I of the
Statement. The Paying Agent shall have no duty to determine the Redemption Price
and may conclusively rely on the amount thereof set forth in the Notice of
Redemption.
ARTICLE IV
THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR
Section 4.1. Original Issue of Share Certificates. On the Date of
Original Issue for any AMPS, one certificate for AMPS shall be issued by the
Fund and registered in the name of Cede & Co., as nominee of the Securities
Depository, and countersigned by the Paying Agent.
Section 4.2. Registration of Transfer or Exchange of Shares. Except as
provided in this Section 4.2, the 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 Fund shall not have
selected a substitute Securities Depository acceptable to the Paying Agent prior
to such resignation, then, upon such resignation of the Securities Depository,
the AMPS, at the Fund's request and expense, may be registered for transfer or
exchange, and new certificates thereupon shall be issued in the name of the
designated transferee or transferees, upon surrender of the old certificate in
form deemed by the Paying Agent to be properly endorsed for transfer with (a)
all necessary endorsers' signatures guaranteed in such manner and form and by
such guarantor as the Paying Agent may reasonably require, (b) such assurances
as the Paying Agent shall deem necessary or appropriate to evidence the
genuineness and effectiveness of each necessary endorsement and (c) satisfactory
evidence of compliance with all applicable laws relating to the collection of
taxes in connection with any registration of transfer or exchange or funds
necessary for the payment of such taxes. If there is no Securities Depository,
at the Fund's option and upon its receipt of such documents as it deems
appropriate, any AMPS may be registered in the 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 thereof
upon transfer or exchange thereof at the Fund's expense.
Section 4.3. Removal of Legend. Any request for removal of a legend
indicating a restriction on transfer from a certificate evidencing AMPS shall be
accompanied by an opinion of counsel stating that such legend may be removed and
such AMPS may be transferred free of the restriction described in such legend,
said opinion to be delivered under cover of a letter from a Fund Officer
authorizing the Paying Agent to remove the legend on the basis of said opinion.
Section 4.4. Lost, Stolen or Destroyed Share Certificates. The Paying
Agent shall, at the Holder's expense, 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 Fund and by the Paying Agent, subject at all times to
provisions of law, the Statement governing such matters and resolutions adopted
by the Fund with respect to lost, stolen or destroyed securities. The Paying
Agent may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Fund to the Paying Agent to issue a
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replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Fund to the Paying Agent that such
issuance will comply with provisions of applicable law and the Statement and
resolutions of the Fund.
Section 4.5. Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share certificates which have been canceled and
any accompanying documentation thereto in accordance with applicable rules and
regulations of the Securities and Exchange Commission (the "Commission") for at
least one calendar year from the date of such cancellation. The Paying Agent,
upon written request by the Fund, shall afford to the Fund, its agents and
counsel access at reasonable times during normal business hours to review and
make extracts or copies (at the Fund's sole cost and expense) of such
certificates and accompanying documentation. Upon the expiration of this one
year period, the Paying Agent, upon written request by the Fund, shall deliver
to the Fund the canceled certificates and any accompanying documentation. In the
event that the Commission requests that any or all such records be furnished to
it, the Paying Agent shall provide the Fund with prompt written notice of such
request so that the Fund may appeal such request and the Paying Agent shall
cooperate with the Fund in any such appeal. In the event that such appeal is
unsuccessful, the Paying Agent shall be permitted to furnish to the Commission,
either at its principal office or at any regional office, complete, correct and
current hard copies of any and all records that were requested by the Commission
provided that the Paying Agent shall exercise reasonable efforts to obtain
assurance that confidential treatment will be accorded to such records.
Thereafter, such records shall not be destroyed by the Fund without the approval
of the Paying Agent, which approval shall not be withheld unreasonably, but will
be safely stored for possible future reference.
Section 4.6. Share Register. The Paying Agent shall maintain the share
register, which shall contain a list of the Holders, the number of AMPS held by
each Holder and the address of each Holder. The Paying Agent shall record in the
share register any change of address of a Holder upon notice by such Holder. In
case of any written request or demand for the inspection of the share register
or any other books of the Fund in the possession of the Paying Agent, the Paying
Agent will notify the Fund and secure instructions as to permitting or refusing
such inspection. The Paying Agent reserves the right, however, to exhibit the
share register or other records to any person in case it is (a) 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) advised by its counsel that its failure to do so would be
unlawful.
Section 4.7. Return of Funds. Any funds paid to the Paying Agent for
the paying of dividends but not applied to the payment of dividends, including
interest earned on such moneys, will, to the extent permitted by law, be repaid
to the Fund at the end of 60 days from the date on which such moneys were to
have been so applied. Upon written request, the Fund shall be entitled to
receive from the Paying Agent, promptly after the date fixed for redemption, any
cash deposited with the Paying Agent in excess of (i) the aggregate Redemption
Price of the AMPS called for redemption on such date and (ii) such other
amounts, if any, to which Holders of AMPS called for redemption may be entitled.
Any funds so deposited that are unclaimed at the end of two years from such
redemption date shall, to the extent permitted by law, be paid to the Fund upon
its written request. Funds, while deposited with the Auction Agent, will be held
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in trust for the payment of the applicable dividend, redemption price or, as may
be applicable under the Statement, other charges.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of the Fund. The Fund
represents and warrants to the Auction Agent that:
(i) the Fund has been duly organized and is validly existing
as a business trust under the laws of the State of Massachusetts, and
has full power to execute and deliver this Agreement and to authorize,
create and issue the AMPS;
(ii) the Fund is registered with the Commission under the 1940
Act as a closed-end, diversified, management investment company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes the legal, valid and
binding obligation of the Fund, enforceable against the Fund 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;
(iv) the form of the certificate evidencing the AMPS complies
with all applicable state and federal laws;
(v) the AMPS have been duly and validly authorized by the
Fund and, upon completion of the initial sale of the AMPS and receipt
of payment therefor, will be validly issued by the Fund, fully paid and
nonassessable;
(vi) at the time of the offering of the AMPS, the AMPS offered
will be registered under the Securities Act 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 be required in connection with the
issuance of the AMPS, except such action as required by applicable
state securities laws;
(vii) the execution and delivery of this 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 Declaration of Trust, any order
or decree of any court or public authority having jurisdiction over the
Fund or any mortgage, indenture, contract, agreement or undertaking to
which the Fund is a party or by which it is bound the effect of which
conflict, violation, breach or default would be material to the Fund;
and
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(viii) no taxes are payable upon or in respect of the execution
of this Agreement or will be payable upon or in respect of the issuance
of the AMPS.
Section 5.2. Representations and Warranties of the Auction Agent. The
Auction Agent represents and warrants to the Fund 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 only to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles.
ARTICLE VI
THE AUCTION AGENT
Section 6.1. Duties and Responsibilities. (a) The Auction Agent is
acting solely as agent for the Fund hereunder and owes no fiduciary duties to
any Person.
(b) 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 6.2. Rights of the Auction Agent. (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 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
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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 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 Auction Agent shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
(f) 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.
(g) 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.
(h) 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.
(i) 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 (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Auction Agent, be deemed to be conclusively proved and established by a
certificate describing such action as requested of the Fund or the
Broker-Dealer, signed by the Fund 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
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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 negligent.
Section 6.3. Compensation, Expenses and Indemnification. (a) The Fund
shall pay to the Auction Agent from time to time reasonable compensation for all
services rendered by it under this Agreement and under the Broker-Dealer
Agreements as shall be set forth in a separate writing signed by the Fund and
the Auction Agent, 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 or decrease materially the Auction Agent's
obligations hereunder or under the Broker-Dealer Agreements.
(b) The Fund shall reimburse the Auction Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Auction
Agent in accordance with any provision of this Agreement and of the
Broker-Dealer Agreements (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any expense, disbursement or
advance attributable to the Auction Agent's negligence or bad faith, upon
submission to the Fund of reasonable documentation thereof.
(c) The Fund shall indemnify the Auction Agent and its officers,
directors, employees and agents for, and hold them 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 under the Broker-Dealer Agreements, including the costs and
expenses of defending themselves against any claim of liability in connection
with their exercise or performance of any of their duties hereunder and
thereunder, except such as may result from its negligence or bad faith.
Section 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 except to the extent otherwise set forth in
Section 5.2 and except that the Auction Agent hereby represents that the
Agreement has been duly authorized, executed and delivered by the Auction Agent
and constitutes a legal and binding obligation of the Auction Agent.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Term of Agreement. (a) The term of this Agreement is
unlimited unless it shall be terminated as provided in this Section 7.1. The
Fund may terminate this Agreement at any time by so notifying the Auction Agent,
provided that, if any AMPS remain outstanding, the Fund shall have entered into
an agreement with a successor auction agent. The Auction Agent may terminate
this Agreement (i) upon prior notice to the Fund on the date specified in such
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notice, which date shall be no earlier than 60 days after delivery of such
notice or (ii) upon prior notice to the Fund on the date specified in such
notice if the Fund shall have failed to pay the amounts due the Auction Agent in
connection with its agency under this Agreement and under the Broker-Dealer
Agreements within 30 days of invoice. If the Auction Agent terminates this
Agreement while any AMPS remain outstanding, the Fund shall use its best efforts
to enter into an agreement with a successor auction agent containing
substantially the same terms and conditions as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the respective
rights and duties of the Fund and the Auction Agent under this Agreement shall
cease upon termination of this Agreement. The Fund's representations,
warranties, covenants and obligations to the Auction Agent under Sections 5.1
and 6.3 hereof shall survive the termination hereof. The Auction Agent's
representations, warranties, covenants and obligations under Section 5.2 hereof
shall survive the termination hereof. Upon termination of this Agreement, the
Auction Agent shall (i) resign as Auction Agent under the Broker-Dealer
Agreements, (ii) at the Fund's written request, deliver promptly to the Fund or
to another authorized party copies of all books and records maintained by it in
connection with its duties hereunder, and (iii) at the written request of the
Fund, transfer promptly to the Fund or to any successor auction agent any funds
deposited by the Fund with the Auction Agent (whether in its capacity as Auction
Agent or as Paying Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance with this Agreement.
Section 7.2. Communications. Except for (i) communications authorized
to be made 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 given to such party at its address or telecopier number set forth
below:
If to the Fund,
addressed to: Attn: W. Xxxxx Xxxxxxx
First Trust Portfolios, L.P.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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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
or such other address or telecopier 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 Fund by a Fund Officer and on
behalf of the Auction Agent by an Authorized Officer.
Section 7.3. 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 written agreements relating to the
compensation of the Auction Agent.
Section 7.4. Benefits. Nothing herein, express or implied, shall give
to any Person, other than the Fund, the Auction Agent and their respective
successors and assigns, any benefit of any legal or equitable right, remedy or
claim hereunder.
Section 7.5. Amendment; Waiver. (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 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.
Section 7.6. 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 the Fund and the Auction Agent. This Agreement
may not be assigned by either party hereto absent the prior written consent of
the other party, which consent shall not be withheld unreasonably.
Section 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.
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Section 7.8. 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 7.9. 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 AUCTION AGENCY 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.
Section 7.10. Limitation of Liability. A copy of the Declaration of
Trust of the Fund is on file with the Secretary of the Commonwealth of
Massachusetts. This Agreement has been executed on behalf of the Fund by an
officer of the Fund in such capacity and not individually and the obligations of
the Fund under this Agreement are not binding upon such officer or any of the
trustees or the shareholders of the fund individually but are binding only upon
the assets and property of the Fund.
[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.
FIRST TRUST/FOUR CORNERS SENIOR FLOATING
RATE INCOME FUND II
By: ______________________________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS
By: ______________________________________
Name:
Title:
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