EXHIBIT 13 (b)
AUCTION AGENCY AGREEMENT
between
VAN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADVANTAGE MUNICIPAL INCOME TRUST II
and
BANKERS TRUST COMPANY
Dated as of November 10, 1993
Relating to
Auction Preferred Shares
Series A and Series B
of
VAN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADVANTAGE MUNICIPAL INCOME TRUST II
TABLES OF CONTENTS
PAGE
1. Definitions and Rules of Construction................................................... 1
1.1 Terms Defined by Reference to APS..................................... 1
Provisions............................................................ 1
1.2 Terms Defined Herein.................................................. 1
1.3 Rules of Construction................................................. 3
2. The Auction............................................................................. 4
2.1 Purpose; Incorporation by Reference
of Auction Procedures and Settle-
ment Procedures....................................................... 4
2.2 Preparation of Each Auction; Main-
tenance of Registry of Beneficial
Owners................................................................ 4
2.3 Information Concerning Rates.......................................... 7
2.4 Auction Schedule...................................................... 11
2.5 Designation of Special Dividend
Period................................................................ 12
2.6 Allocation of Taxable Income.......................................... 14
2.7 Failure to Deposit.................................................... 14
2.8 Broker-Dealers........................................................ 17
2.9 Ownership of APS...................................................... 17
2.10 Access to and Maintenance of Auc-
tion Records.......................................................... 18
2.11 Dividend and Redemption Price De-
posit................................................................. 18
3. The Auction Agent as Dividend and
Redemption Price Disbursing Agent....................................................... 18
4. The Auction Agent as Transfer Agent and Registrar....................................... 19
4.1 Issue of Share Certificates........................................... 19
4.2 Registration of Transfer of Shares.................................... 19
4.3 Removal of Legend on Restricted
Shares................................................................ 19
4.4 Lost Share Certificates............................................... 20
4.5 Disposition of Cancelled Certifi-
▇▇▇▇▇; Record Retention............................................... 20
4.6 Share Transfer Books.................................................. 20
4.7 Return of Funds....................................................... 21
5. Representations and Warranties of the Fund.............................................. 21
6. The Auction Agent....................................................................... 22
6.1 Duties and Responsibilities........................................... 22
6.2 Rights of the Auction Agent........................................... 23
6.3 Auction Agent's Disclaimer............................................ 23
6.4 Compensation, Expenses and
Indemnification....................................................... 24
7. Miscellaneous........................................................................... 24
7.1 Term of Agreement..................................................... 25
7.2 Communications........................................................ 25
7.3 Entire Agreement...................................................... 26
7.4 Benefits.............................................................. 26
7.5 Amendment; Waiver..................................................... 26
7.6 Successors and Assigns................................................ 26
7.7 Limitation of Liability............................................... 27
7.8 Severability.......................................................... 27
7.9 Execution in Counterparts............................................. 27
7.10 Governing Law......................................................... 27
2
AUCTION AGENCY AGREEMENT dated as of November 10, 1993 between VAN
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADVANTAGE MUNICIPAL INCOME TRUST II, a Massachusetts business
trust (the "Fund"), and BANKERS TRUST COMPANY, a New York banking corporation
(the "Auction Agent").
WHEREAS, the Fund proposes to issue two series of preferred shares of
beneficial interest, par value $.01 per share, liquidation preference $50,000
per share, designated Auction Preferred Shares, Series A ("APS Series A") and
Auction Preferred Shares, Series B ("APS Series B") (together) the APS Series A
and APS Series B are referred to herein as the "APS") pursuant to the APS
Provisions (as hereinafter defined) and desires that the Auction Agent perform
certain duties in connection with the APS upon the terms and subject to the
conditions of this Agreement, and hereby appoints the Auction Agent to act in
the capacities set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to APS Provisions. Capitalized terms not
defined herein shall have the respective meanings meanings specified in the APS
Provisions.
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
and is identified as such in such Bidder's Master Purchaser's Letter.
(b) "APS Provisions" shall mean the Certifi-cate of Vote of
the Fund's Board of Trustees establishing the series of shares of APS pursuant
to the Declaration of Trust of the Fund and attached hereto as Exhibit D.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of the form of APS Provisions.
(e) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Assistant Treasurer and
Assistant Secretary 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 Fund.
(f) "Broker-Dealer" shall mean any broker-dealer, commercial
bank or other entity permitted by law to perform the functions of a
Broker-Dealer that is a member of, or a participant in, the Securities
Depository or is an affiliate of such member or participant, has been selected
by the Fund and has entered into a Broker-Dealer Agreement that remains
effective.
(g) "Broker-Dealer Agreement" shall mean each agreement among
the Fund, the Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
(h) "Existing Holder," when used with respect to shares of any
series of APS, shall mean a Person who has signed a Master Purchaser's Letter
and is listed as the beneficial owner of such shares of APS in the records of
the Auction Agent.
(i) "Fund Officer" shall mean the Chairman of the Board of
Trustees of the Fund, 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 to the Auction
Agent.
(j) "Master Purchaser's Letter" shall mean a letter addressed
to the Fund, the Auction Agent, a Broker-Dealer and an Agent Member,
substantially in the form attached hereto as Exhibit B.
(k) "Potential Holder," when used with respect to shares of
any series of APS, shall mean any
2
Person, including any Existing Holder of shares of such series of APS, (i) who
shall have executed a Master Purchaser's Letter and (ii) who may be interested
in acquiring shares of such series of APS (or, in the case of an Existing Holder
of shares of such series of APS, additional shares of such series of APS).
(l) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit C.
(m) "Underwriters" shall mean ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇
▇▇▇▇▇▇ Shearson Inc., PaineWebber Incorporated, Prudential Securities
Incorporated, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated, ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. and
any other person named as an underwriter of the APS in the Underwriting
Agreements or any schedules thereto.
(n) "Underwriting Agreements" shall mean the Underwriting
Agreements dated November 4, 1993 among the Fund and the Underwriters.
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.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures. (a) The APS Provisions provide that the Applicable Rate
per annum for
3
each series of APS for each Subsequent Dividend Period after the Initial
Dividend Period with respect to each series of APS shall, except under certain
conditions, be equal to the rate per annum that a bank or trust company
appointed by the Fund advises has resulted on the Business Day preceding the
first day of such Subsequent Dividend Period from implementation of the Auction
Procedures for such series. Each periodic implementation of the Auction
Procedures is hereinafter referred to as an "Auction." The Board of Trustees has
adopted a resolution appointing Bankers Trust Company as Auction Agent for
purposes of the Auction Procedures for each series of the APS. The Auction Agent
accepts such appointment and agrees to follow the procedures set forth in this
Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for each series of APS for each Subsequent Dividend Period
thereof for which the Applicable Rate is to be determined by an Auction.
(a) 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 of Each Auction; Maintenance of Registry of Beneficial
Owners. (a) Not later than seven days prior to the first Auction Date for the
first series of APS, the Fund shall provide the Auction Agent with a list of the
Broker-Dealers and a manually signed copy of each Broker- Dealer Agreement for
execution by the Auction Agent. Not later than seven days prior to any Auction
Date for any series of APS for which any change in such list of Broker-Dealers
is to be effective, the Fund 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; provided,
however, that if the Fund proposes to designate any Special Dividend Period of
any series of APS pursuant to Section 4 of Part I of the APS Provisions, not
later than 11:00 A.M., New York City time, on the Business Day next preceding
the Auction next preceding the first day of such Special Dividend Period, upon
the written request of the Auction Agent the Fund shall provide the Auction
Agent with a list of the Broker-Dealers for such series and a manually signed
copy of each Broker-Dealer Agreement or a new Schedule A to the Broker-Dealer
Agreement (which
4
Schedule A shall replace and supersede any previous Schedule A to such
Broker-Dealer Agreement) with each Broker-Dealer for such series. The Auction
Agent and the Fund shall have entered into as 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 any series of APS
shall be changed after the Auction Agent shall have given the notice referred to
in clause (vi) of paragraph (a) at the Settlement Procedures, or after the
notice referred to in Section 2.5(a) hereof, if applicable, the Auction Agent,
by such means as the, Auction Agent deems practicable, shall give notice of such
change to the Broker-Dealers for such series not later than .the earlier 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 registry of the
beneficial owners of the shares of each series of APS who shall constitute
Existing Holders of shares of such series of APS 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
bald or purchasing shares of such series of APS. The Auction Agent shall keep
such registry current and accurate. The Fund shall provide or cause to be
provided to the Auction Agent at or prior to the Date of Original Issue of each
series of APS a list of the Initial Existing holders of the shares of each such
series, 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
shall advise the Fund in writing whenever the number of Existing Holders is 500
or more. The Auction Agent may rely upon, as conclusive evidence of the
identities of the Existing Holders of shares of any series of APS; (A) such
list, (B) the results of Auctions and (C) notices from any Existing Holder, the
Agent Member of any Existing Holder or the Broker-Dealer of any Existing Holder
as described in the first sentence of Section 2.2(c)(iii) hereof.
(ii) In the event of any partial redemption of any
series of APS, the Auction Agent shall, at least two Business Days
prior to the
5
next Auction for such series, request the Agent Member of each Existing
Holder of shares of APS of such series to disclose to the Auction Agent
(upon selection by such Agent Member of the Existing holders whose
shares of APS of such series are to be redeemed) the number of shares
of APS of such series, if any, of such Existing Holder which are
subject to such redemption, provided the Auction Agent has been
furnished with the name and telephone number of a person or department
at such Agent Member from which is shall request such information. Upon
any refusal of an Agent Member to release such information, the Auction
Agent shall deliver to such Agent Member a facsimile copy of the
Existing Holder's Master Purchaser's Letter, which authorizes and
instructs such Agent Member to release such information to the Auction
Agent. 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 the beneficial owner of the number oL shares of APS of such series
shown in the Auction Agent's registry.
(iii) The Auction Agent shall be required to register
a transfer of shares of APS of any series from an Existing Holder of
such shares of APS to another Person only if such transfer is made to a
Person that has delivered, or on whose behalf has been delivered, a
signed Master Purchaser's Letter to the Auction Agent and if (A) such
transfer is pursuant to an Auction or (B) the Auction Agent has been
notified in writing (I) in a notice substantially in the form of
Exhibit D to the Broker-Dealer Agreements by such Existing Holder, the
Agent Member of such Existing Holder or the Broker-Dealer of such
Existing Holder of such transfer or (II) in a notice substantially in
the form of Exhibit E to the Broker-Dealer Agreements by the
Broker-Dealer of any Person that purchased or sold such APS in an
Auction of the failure of such shares of APS to be transferred as a
result of such Auction. The Auction Agent is not required to accept any
such notice for an Auction unless it is received by the
6
Auction Agent by 3:00 P.M. on the Business Day preceding such Auction.
(iv) The Auction Agent is not required to accept the
Master Purchaser's Letter of any Potential Holder who wishes to submit
a Bid for the first time in an Auction or of any Potential Holder or
Existing Holder who wishes to amend its Master Purchaser's Letter
unless such letter or amendment is received by the Auction Agent by
3:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may request the Broker-Dealers, as set
forth in the Broker-Dealer Agreements, to provide the Auction Agent with a list
of their respective customers that such Broker-Dealers believe are Existing
Holders of shares of any series of APS. The Auction Agent shall keep
confidential such registry of Existing Holders and shall not disclose the
identities of the Existing Holders of such shares of APS to any Person other
than the Fund and the Broker-Dealer that provided such information.
2.3 Information Concerning Rates. (a) The Applicable Percentage on the
date of this Agreement for APS is 110%. If there is any change in the credit
rating of APS by either of the rating agencies (or substitute or successor
rating agencies) referred to in the definition of "Applicable Percentage"
resulting in any change in the Applicable Percentage for APS after the date of
this Agreement, the Fund shall notify the Auction Agent in writing of such
change in the Applicable Percentage prior to 12:00 Noon on the Business Day
prior to the next Auction Date for any series of APS succeeding such change. If
the Fund designates all or a portion of any dividend on shares of any series of
APS to consist of net capital gains or other income taxable for federal income
tax purposes, it will indicate, in its notice in the form of Exhibit K hereto to
the Auction Agent pursuant to Section 2.6 hereof, the Applicable Percentage for
such series to be in effect for the Auction Date on which the dividend rate for
such dividend is to be fixed. In determining the Maximum Rate for any series of
APS on any Auction Date as set forth in Section 2.3(b)(i) hereof, the Auction
Agent shall be entitled to rely on the last Applicable Percentage for APS of
which it has most recently received notice from the Fund (or, in the absence of
such notice, the percentage set forth in the first sentence of
7
this paragraph (a)), except that if the Fund shall have notified the Auction
Agent of an Applicable Percentage to be in effect for an Auction Date in
accordance with the preceding sentence, the Applicable Percentage in effect for
the next succeeding Auction Date of any series of APS shall be, unless the Fund
notifies the Auction Agent of a change in the Applicable Percentage for such
succeeding Auction Date pursuant to this Section 2.3(a), the Applicable
Percentage that was in effect on the first preceding Auction Date for APS with
respect to which the dividend, the rate for which was fixed on such Auction
Date, did not include any net capital gains or other income taxable for federal
income tax purposes.
(b) (i) On each Auction Date for any series of APS, the
Auction Agent shall determine the Maximum Rate for such series. The Maximum Rate
for any series of APS on any Auction Date shall be:
(A) in the case of any Auction Date which is
not the Auction Date immediately prior to the first day of any
proposed Special Dividend Period of more than 28 days
designated by the Fund pursuant to Section 4 of Part I of the
APS Provisions, the product of (1) the Reference Rate on such
Auction Date for the next Rate Period of such series and (2)
the Applicable Percentage on such Auction Date, unless such
series has or had a Special Dividend Period (other than a
Special Dividend Period of 28 Rate Period Days or less) and an
Auction at which Sufficient Clearing Bids existed has not yet
occurred for a Minimum Dividend Period of such series after
such Special Dividend Period, in which case the higher of:
(1) the dividend rate on shares of such series of APS
for the then-ending Rate Period, and
(2) the product of (x) the higher of (I) the "AA"
Composite Commercial Paper Rate on such Auction Date for the
then-ending Rate Period of such series, if such Rate Period is less
8
than one year, or the Treasury Rate on such Auction Date for such Rate
Period, if such Rate Period is one year or greater and (II) the "AA"
Composite Commercial Paper Rate on such Auction Date for such Special
Dividend Period of such series, if such Special Dividend Period is less
than one year, or the Treasury Rate on such Auction Date for such
Special Dividend Period, if such Special Dividend Period is one year or
greater, and (y) the Applicable Percentage on such Auction Date; or
(B) in the case of any Auction Date which is
the Auction Date immediately prior to the first day of any
proposed special Dividend Period of more than 28 days
designated by the Fund pursuant to Section 4 of Part I of the
APS Provisions, the product of (1) the highest of (x) the
Reference Rate on such Auction Date for the then-ending Rate
Period of such series, if such Rate Period is less than one
year, or the Treasury Rate on such Auction Date for such Rate
Period, if such Rate Period is one year or greater, (y) the
Reference Rate on such Auction Date for such Special Dividend
Period of such series for which the Auction is being held, if
such Special Dividend Period is less than one year, or the
Treasury Rate on such Auction Date for such Special Dividend
Period of such series for which the Auction is being held, if
such special Dividend Period is one year or greater, and (z)
the Reference Rate an such Auction Date for Minimum Dividend
Periods and (2) the Applicable Percentage on such Auction
Date.
Not later than 9:30 A.M. on each Auction Date, the Auction Agent shall notify
the Fund and the Broker-Dealers of the Maximum Rate so determined and the
Reference Rate and Treasury Rate(s), as the case may be, used to make such
determination.
(ii) From and after a Failure to Deposit by the Fund
during any Rate Period of any
9
series of APS, until such failure is cured and a late charge, if
applicable, is paid, in accordance with subparagraph (c)(i) of Section
2 of Part I of the APS Provisions, on the first day of each Rate Period
of such series the Auction Agent shall determine the Treasury Rate for
such Rate Period, if such Rate Period is one year or greater, and the
Reference Rate for Minimum Dividend Periods and Rate Periods that are
less than one year. Not later than 9:30 A.M. on each such first day,
the Auction Agent shall notify the Fund of the applicable Reference
Rate and Treasury Rate.
(iii) If any Reference Rate or Treasury Rate, as the
case may be, is not quoted on an interest basis, the Auction Agent
shall convert the quoted rate to the interest equivalent thereof as set
forth in the definition of such rate in the APS Provisions if the rate
obtained by the Auction Agent is quoted on a discount basis, or if such
rate is quoted on a basis other than an interest or discount basis the
Auction Agent shall convert the quoted rate to an interest rate after
consultation with the Fund as to the method of such conversion.
(iv) If any "AA" Composite Commercial Paper Rate is
to be based on rates supplied by Commercial Paper Dealers and one or
more of the Commercial Paper Dealers shall not provide a quotation for
the determination of such "AA" Composite Commercial Paper Rate, the
Auction Agent shall immediately notify the Fund so that the Fund 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 Fund shall promptly advise the Auction
Agent of any such selection.
(v) If any Treasury 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 Rate, the Auction Agent shall
immediately notify the Fund so that the Fund can determine whether to
10
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 Fund shall promptly advise
the Auction Agent of any such selection.
(c) The greater of the maximum marginal regular federal
individual income tax rate applicable to ordinary income or the maximum marginal
regular federal corporate income tax rate (the "Highest Marginal Rate") on the
date of this Agreement is 34%. If there is any change in the Highest Marginal
Rate, the Fund shall notify the Auction Agent in writing of such change prior to
12:00 Noon on the Business Day prior to the next Auction Date for APS succeeding
such change. In determining the Maximum Rate for any series of APS on any
Auction Date, the Auction Agent shall be entitled to rely on the Highest
Marginal Rate of which it has most recently received notice from the Fund (or,
in the absence of such notice, the percentage set forth in the first sentence of
this paragraph (c)).
2.4 Auction Schedule. The Auction Agent shall conduct Auctions in
accordance with the schedule set forth below. Such schedule may be changed by
the Auction Agent with the consent of the Fund, 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
---- -----
By 9:30 A.M. Auction Agent advises the Fund and
Broker-Dealers of the applicable Maximum
Rate and the Reference Rate and Treasury
Rate(s), as the case may be, used in
determining such Maximum Rate as set
forth in Section 2.3(b)(i) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information
communicated to it by
11
Broker-Dealers as provided in Section
3(a) of the Auction Procedures.
Submission Deadline is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations
pursuant to Section 4(a) of the Auction
Procedures.
By approximately 3:00 P.M. Auction Agent advises Fund of results of
Auction as provided in Section 4(b) of
the Auction Procedures. Submitted Bids
and Submitted Sell Orders are accepted
and rejected and shares of APS allocated
as provided in Section 5 of the Auction
Procedures. Auction Agent gives notice
of Auction results as set forth in
paragraph (a) of the Settlement
Procedures.
2.5 Designation of Special Dividend Period. (a) The APS Provisions will
provide that, subject to the Fund's option to designate a Special Dividend
Period as referred to in paragraph (b) of this Section 2.5, (i) each Rate Period
(other than the Initial Dividend Period) will consist of 7 days for each of APS
Series A and APS Series B and (ii) each Rate Period following a Rate Period of
any series of APS that is other than a Minimum Dividend Period will be 7 days
for each of APS Series A and APS Series B. Not less than 10 nor more than 20
days prior to the last day of any such Rate Period that is not a Minimum
Dividend Period, (i) the Fund shall deliver to the Auction Agent a notice of the
Auction Date of the next succeeding Auction for such series in the form of
Exhibit E hereto and (ii) the Auction Agent shall deliver such notice by
first-class mail, postage prepaid, to each Existing Holder of shares of such
series at the address specified in such Existing Holder's Master Purchaser's
Letter and to the Broker-Dealers for such series as promptly as practicable
after its receipt of such notice from the Fund.
(b) Pursuant to the APS Provisions, the Fund may, at its
option, designate a Special Dividend Period for
12
any series of APS in the manner described in Section 4 of Part I of the APS
Provisions.
(i) If the Fund proposes to designate any succeeding
Subsequent Dividend Period of any series of APS as a Special Dividend
Period of more than 28 Rate Period Days, (A) the Fund shall deliver to
the Auction Agent a notice of such proposed Special Dividend Period in
the form of Exhibit F hereto not less than 20 nor more than 30 days
prior to the first day of such proposed Special Dividend Period and (B)
the Auction Agent on behalf of the Fund shall deliver such notice by
first-class mail, postage prepaid, to each Existing Holder of shares of
such series of APS at the address specified in such Existing Holder's
Master Purchaser's Letter and to the Broker-Dealers for such series as
promptly as practicable after its receipt of such notice from the Fund.
(ii) If the Board of Trustees determines to designate
such succeeding Subsequent Dividend Period as a Special Dividend
Period, (A) the Fund shall deliver to the Auction Agent a notice of
such determination in the form of Exhibit G hereto not later than 11:00
A.M. on the second Business Day next preceding the first day of such
proposed Special Dividend Period and (B) the Auction Agent shall
deliver such notice to the Broker-Dealers for such series not later
than 3:00 P.M. on such second Business Day.
(iii) If the Fund shall deliver to the Auction Agent
a notice stating that the Fund has determined not to exercise its
option to designate such succeeding Subsequent Dividend Period as a
Special Dividend Period with respect to which it has delivered a notice
in the form of Exhibit F hereto not later than 11:00 A.M. on the second
Business Day next preceding the first day of such proposed Special
Dividend Period, or shall fail to timely deliver either such notice or
a notice in the form of Exhibit G hereto, the Auction Agent shall
deliver a notice in the form of Exhibit H hereto to the Broker-Dealers
for such series not later than 3:00 P.M. on such second Business Day.
13
A change in the length of a Rate Period to a Rate Period of more than
28 Rate Period Days shall not occur if (a) on the Auction Date next
preceding the first day of such Special Dividend Period Sufficient
Clearing Bids shall not exist or (b) a Failure to Deposit shall have
occurred prior to such change with respect to shares of such series of
APS and shall not have been cured in accordance with the APS
Provisions.
2.6 Allocation of Taxable Income. The Fund may, at its option,
designate all or a portion of any dividend on shares of any series of APS to
consist of net capital gains or other income taxable for federal income tax
purposes by delivering to the Auction Agent a notice in the form of Exhibit K
hereto of such designation 15 days prior to the Auction Date on which the
Applicable Rate for such dividend is to be fixed or by retroactively allocating
income taxable for federal income tax purposes as provided in the APS
Provisions. The Auction Agent will deliver such notice to the Broker-Dealers for
such series on the Business Day following its receipt of such notice from the
Fund. Within two Business Days after any Auction Date involving the allocation
of income taxable for federal income tax purposes, or if the Fund retroactively
allocates income taxable for federal income tax purposes as provided in the APS
Provisions, the Auction Agent shall notify each Broker-Dealer for the related
series as to the dollar amount per share of such taxable income and income
exempt from federal income taxation included in the related dividend.
2.7 Failure to Deposit. (a) If:
(i) any Failure to Deposit shall have occurred with
respect to shares of any series of APS during any Rate Period thereof
(other than any Special Dividend Period, if such Special Dividend
Period is one year or greater, or any Rate Period succeeding any
Special Dividend Period, if such Special Dividend Period is one year or
greater, during which a Failure to Deposit occurred that has not been
cured); and
(ii) prior to 12:00 Noon, New York City time, on the
third Business Day next succeeding the date on which such Failure to
Deposit occurred, such Failure to Deposit shall have been cured in
accordance with the next succeeding sent-
14
ence and the Fund shall have paid to the Auction Agent a late charge
equal to the sum of (A) if such Failure to Deposit consisted of the
failure timely to pay to the Auction Agent the full amount of dividends
with respect to any Dividend Period on the shares of such series, an
amount computed by multiplying (1) 200% of the Reference Rate (or
Treasury Rate, if applicable) for the Rate Period during which such
Failure to Deposit occurs on the Dividend Payment Date for such
Dividend Period by (2) a fraction, the numerator of which shall be the
number of days for which such Failure to Deposit has not been cured in
accordance with the next succeeding sentence (including the day such
Failure to Deposit occurs and excluding the day such Failure to Deposit
is cured) and the denominator of which shall be 365, and applying the
rate obtained against the aggregate liquidation preference of the
outstanding shares of such series of APS and (B) if such Failure to
Deposit consisted of the failure timely to pay to the Auction Agent the
Optional Redemption Price or Mandatory Redemption Price, as the case
may be, of the shares of such series of APS, if any, for which Notice
of Redemption has been given by the Fund pursuant to paragraph (b) of
Section 3 of Part I of the APS Provisions, an amount computed by
multiplying (x) 200% of the Reference Rate (or Treasury Rate, if
applicable) for the Rate Period during which such Failure to Deposit
occurs on the redemption date by (y) a fraction, the numerator of which
shall be the number of days for which such Failure to Deposit was not
cured in accordance with the next succeeding sentence (including the
day such Failure to Deposit occurs and excluding the day such Failure
to Deposit was cured) and the denominator of which shall be 365, and
applying the rate obtained against the aggregate liquidation preference
of the outstanding shares of such series of APS to be redeemed, then
the Auction Agent shall deliver a notice in the form of Exhibit I
hereto by first-class mail, postage prepaid, to the Broker-Dealers for
such series not later than one Business Day after its receipt of the
payment from the Fund curing such Failure to Deposit and such late
charge. A Failure to Deposit with respect to any series of APS shall
have been cured (if such
15
Failure to Deposit is not solely due to the willful failure of the Fund
to make the required payment to the Auction Agent) with respect to any
Rate Period thereof if, not later than 12:00 Noon, New York City time,
on the fourth Business Day preceding the Auction Date for the Rate
Period subsequent to such Rate Period, the Fund shall have paid to the
Auction Agent (A) all accumulated and unpaid dividends on the shares of
such series of APS and (B) without duplication, the Optional Redemption
Price or Mandatory Redemption Price, as the case may be, for the shares
of such series of APS, if any, for which Notice of Redemption has been
given by the Fund pursuant to paragraph (b) of Section 3 of Part I of
the APS Provisions.
(b) If:
(i) any Failure to Deposit shall have occurred with
respect to shares of any series of APS during a Rate Period thereof
(other than any Special Dividend Period, if such Special Dividend
Period is one year or greater, or any Rate Period succeeding any
Special Dividend Period, if such Special Dividend Period is one year or
greater, during which a Failure to Deposit occurred that has not been
cured), and, prior to 12:00 Noon on the third Business Day next
succeeding the date on which such Failure to Deposit occurred, such
Failure to Deposit shall not have been cured within the meaning of the
last sentence of Section 2.7(a) hereof and the Fund shall not have paid
to the Auction Agent the late charge described in such Section 2.7(a),
but such Failure to Deposit shall subsequently be so cured; or
(ii) any Failure to Deposit shall have occurred with
respect to shares of any series of APS during a Special Dividend
Period, if such Special Dividend Period is one year or greater, or
during any Rate Period succeeding any Special Dividend Period, if such
Special Dividend Period is one year or greater, during which a Failure
to Deposit occurred, and such Failure to Deposit shall subsequently
have been cured within the meaning of the last sentence of Section
2.7(a) hereof,
16
then the Auction Agent shall deliver a notice in the form of Exhibit J
hereto to the Broker-Dealers for such series not later than one
Business Day after the receipt of the payment from the Fund during such
Failure to Deposit. Notwithstanding the foregoing, the Auction Agent
shall conduct an Auction on an Auction Date which occurs simultaneously
with the date of commencement of a Failure to Deposit.
2.8 Broker-Dealers. (a) Not later than 12:00 Noon on each Auction Date
for any series of APS, the Fund shall pay to the Auction Agent an amount in cash
equal to the aggregate fees payable to the Broker-Dealers for such series
pursuant to Section 2.8 of the Broker-Dealer Agreements for such series. The
Auction Agent shall apply such moneys as set forth in Section 2.8 of each such
Broker-Dealer Agreement.
(b) The Fund 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.
(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 APS
after such termination.
(d) Subject to the Auction Agent's having consented to the
selection of the relevant Broker-Dealer pursuant to Section 2.8(b) hereof, the
Auction Agent shall from time to time enter into such Broker-Dealer Agreements
with one or more Broker-Dealers as the Fund shall request, and shall enter into
such schedules to any such Broker-Dealer Agreements as the Fund shall request,
which schedules, among other things, shall set forth the series of APS to which
such Broker-Dealer Agreement relates.
2.9 Ownership of Shares of APS. The Fund shall notify the Auction Agent
if the Fund or any affiliate of the Fund acquires any shares of APS of any
series. Neither the Fund nor any affiliate of the Fund shall submit any Order in
any Auction for APS, except as set forth in the next sentence. Any Broker-Dealer
that is an affiliate of the Fund may submit Orders in Auctions, but only if such
orders are not for its own account. For purposes of this Section 2.9, a
Broker-Dealer shall not be deemed to be an affiliate of
17
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 trustee of the Fund. The Auction Agent
shall have no duty or liability with respect to enforcement of this Section 2.9.
2.10 Access to and Maintenance of Auction Records. The Auction Agent
shall, upon the receipt of prior written notice from the Fund, afford to the
Fund access at reasonable times during normal business hours to all books,
records, documents and other information concerning the conduct and results of
Auctions. 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.
2.11 Dividend and Redemption Price Deposit. The Fund shall pay to the
Auction Agent, not later than 12:00 noon, New York City time, (A) on the
Business Day next preceding any Dividend Payment Date for such series, in funds
available on such Dividend Payment Date in the City of New York, New York, the
full amount of any dividend (whether or not earned or declared) to be paid on
such Dividend Payment Date on any share of such series and (B) on the Business
Day next preceding any redemption date in funds available on such redemption
date for such series in The City of New York, New York, the Redemption Price to
be paid on such redemption date for any share of such series after notice of
redemption is given as set forth in the Certificate of Vote.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing
agent, shall pay to the Holders of shares of APS of any series (i) on each
Dividend Payment Date for such series, dividends on the shares of APS of each
series, (ii) on any date fixed for redemption of shares of APS of any series,
the Redemption Price of any shares of such series 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 Fund with which to
pay such dividends, Redemption Price or late charge. The amount of dividends for
any Rate Period for any
18
series of APS to be paid by the Auction Agent to the Holders of such shares of
such series will be determined by the Fund as set forth in Section 2 of Part I
of the APS Provisions with respect to such series. The Redemption Price of any
shares to be paid by the Auction Agent to the Holders will be determined by the
Fund as set forth in Section 3 of Part I of the APS Provisions with respect to
such series. The Fund shall notify the Auction Agent in writing of a decision to
redeem shares of any series of APS 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 (b) of Section 3 of Part I of the APS Provisions. Such
notice by the Fund to the Auction Agent shall contain the information required
by paragraph (b) of Section 3 of Part I of the APS Provisions to be stated in
the notice of redemption required to be mailed by the Auction Agent to such
Holders.
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Share Certificates. Upon the Date of Original Issue of
each series of APS, one certificate representing all of the shares of each such
series issued on such date shall be issued by the Fund and, at the request of
the Fund, registered in the name of Cede & Co. and countersigned by the Auction
Agent.
4.2 Registration of Transfer of Shares. Shares of each series of APS
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 shares of any series of APS indicating restrictions on transfer shall
be accompanied by an opinion of counsel stating that such legends may be removed
and such shares freely transferred, such opinion to be delivered under cover of
a letter from a Fund Officer authorizing the Auction Agent to remove the legend
on the basis of said opinion.
4.4 Lost 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 Fund and the Auction Agent, subject at all times to
provisions of law, the By-Laws of the Fund governing such matters and
resolutions adopted by the Fund
19
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 Fund 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
Fund to the Auction Agent that such issuance will comply with such provisions of
law and the By-Laws and resolutions of the Fund.
4.5 Disposition of Cancelled Certificates; Record Retention. The
Auction Agent shall retain all 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
two calendar years. Upon the expiration of this two-year period, the Auction
Agent shall deliver to the Fund the cancelled certificates and accompanying
documentation. The Fund also shall undertake to furnish to the Securities and
Exchange Commission and to the Board of Governors of the Federal Reserve System,
upon demand, at either the principal 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 Fund without the concurrence of the
Auction Agent.
4.6 Share Transfer Books. For so long as the Auction Agent, Bankers
Trust Company, is acting as the transfer agent for any series of APS pursuant to
this Agreement, it shall maintain a share transfer book containing a list of the
Holders of the shares of each series of APS, the number of shares of each series
held by such Holders and the address of each Holder. The Auction Agent shall
record in such share transfer books any change of address of a Holder upon
notice by such Holder. In case of any request or demand for the inspection of
the share transfer books of the Fund or any other books in the possession of the
Auction Agent, the Auction Agent will notify the Fund and secure instructions as
to permitting or refusing such inspection. The Auction Agent reserves the right,
however, to exhibit the share transfer books or other books to any Person in
case it is advised by its 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 Fund for any reason, including but not limited to redemption of
shares of APS of any series, that remain unpaid after ninety days shall be
20
repaid to the Fund upon the written request of the Fund, together with interest,
if any, earned thereon.
5. Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(a) the Fund has been duly organized and is subsisting as a
voluntary association with transferable shares (commonly referred to as a
business trust) under the laws of The Commonwealth of Massachusetts and has all
necessary power and authority to execute and deliver this Agreement and to
authorize, create and issue the shares of each series of APS;
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and, assuming due authorization, execution
and delivery by the Auction Agent, constitutes the legal, valid and binding
obligation of the Fund subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium, receivership or similar laws, whether statutory or
decisional, relating to or affecting creditors' rights and to general equitable
principles (regardless of whether enforcement is sought in equity or at law);
(c) the form of the certificate evidencing the shares of APS
complies with all applicable laws of The Commonwealth of Massachusetts;
(d) the shares of APS, when issued, delivered and paid for on
the Date of Original Issue as contemplated by the Underwriting Agreements, will
have been duly authorized, validly issued, fully paid and nonassessable, except
as provided under Massachusetts law;
(e) assuming the Underwriters comply with their obligations
under the Underwriting Agreements and that the purchasers of the APS comply with
their obligations in the Master Purchaser's Letter, no consent, authorization or
order of, or filing or registration with, any court, governmental agency or
official (except such as have been obtained and such as may be required under
the Securities Act of 1933, as amended, or the Investment Company Act of 1940,
as amended, or under the blue sky or state securities laws) is
21
required in connection with the execution and delivery of this Agreement or the
issuance of the shares of the APS; and
(f) the issuance and sale of the APS, the execution, delivery
and performance of this Agreement, compliance by the Fund with all provisions
hereof, and the consummation of the transactions contemplated hereby or by the
Underwriting Agreements or the Broker-Dealer Agreements, will not conflict with,
constitute a breach of any of the terms or provisions of, or a default under, or
result in the creation or imposition of any material lien, charge or encumbrance
upon any of the assets of the Fund pursuant to the terms of any agreement,
indenture or instrument to which the Fund is a party or by which the Fund is
bound, or result in a violation of the Declaration of Trust, APS Provisions or
By-Laws of the Fund or of any order, rule or regulation of any court or
governmental agency having jurisdiction over the Fund or its property which
conflict, breach, default, lien or violation, individually or in the aggregate,
would have a material adverse effect on the business, financial position or
results of operations of the Fund.
6. The Auction Agent.
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 other Person
by reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and the
Broker-Dealer Agreements, and no implied covenants or obligations shall be read
into this Agreement against the Auction Agent.
(c) In the absence of bad faith or gross negligence on its
part, the Auction Agent shall not be liable for any action taken, suffered, or
omitted or for any error of judgment made by it in the performance of its duties
under this Agreement except that the Auction Agent shall be liable for any error
of judgment made in good faith if the Auction Agent shall have been grossly
negligent in ascertaining the pertinent facts.
(d) Any funds deposited with the Auction Agent hereunder by
the Fund for any reason, including the payment of dividends or the redemption of
shares of APS of
22
any series, that remain with the Auction Agent after 90 days shall be repaid to
the Fund upon the written request of the Fund, together with interest, if any,
earned thereon.
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 believed 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 Fund or by any
Broker-Dealer. The Auction Agent may record telephone communications with the
Fund or with any Broker-Dealer.
(b) The Auction Agent may consult with counsel reasonably
acceptable to the Fund and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend
or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and shall
not be responsible for any misconduct on the part of any agent or attorney
appointed by it with due care hereunder except as set forth above in Section
6.1(c).
6.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity or adequacy of this Agreement (except as to
the Auction Agent's duties hereunder and as to the due authorization, execution
and delivery of this Agreement), the Broker-Dealer Agreements (except as to the
Auction Agent's duties thereunder) or the shares of any series of APS.
6.4 Compensation, Expenses and Indemnification. (a) The Fund shall pay
the Auction Agent from time to time reasonable compensation for all services
rendered by it
23
under this Agreement and the Broker-Dealer Agreements in such amounts as may be
agreed to by the Fund and the Auction Agent from time to time.
(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 the
Broker-Dealer Agreements (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any expense or disbursement
attributable to its gross negligence or bad faith.
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection with its
agency under this Agreement and the Broker-Dealer Agreements, including the
costs and expenses of defending itself against any claim or liability in
connection with its exercise or performance of its duties hereunder and
thereunder for which indemnification is provided by this subsection.
7. Miscellaneous.
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 any time by so notifying the Auction Agent in writing,
provided that the Fund has entered into an agreement in substantially the form
of this Agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon written notice to the Fund, such termination to be
effective on the earlier of (i) the date specified in such notice which shall
not be earlier than 90 days after the giving of such notice or (ii) the date on
which a successor trust company is appointed by the Fund pursuant to an
agreement containing substantially the same terms and conditions as this
Agreement.
(b) Except as otherwise provided in this paragraph (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 obligations
under Section 6.4 hereof and its representations and warranties contained in
Section 5 hereof and the Auction Agent's obligations and liabilities under
Sections 2.10 and 4.5 hereof
24
shall survive the termination hereof. Upon termination of this Agreement, the
Auction Agent shall, at the Fund's request, promptly deliver to the Fund copies
of all books and records maintained by it in connection with its duties
hereunder.
7.2 Communications. Except for (a) communications authorized to be by
telephone pursuant to this Agreement or the Auction Procedures and (b)
communications in connection with Auctions (other than those expressly required
to be in writing) and unless otherwise specified by the terms of this Agreement
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) given to such person at its
address or telecopy number set forth below:
If to the Company, Van ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Advantage
addressed: Municipal Income Trust II
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy sent to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF to the Auction Agent, Bankers Trust Company
addressed: Corporate Trust and Agency Group
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Auction Rate Securities
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
25
or to such other address as the party to whom the communication is addressed
shall have previously communicated to the other party. Communications shall be
given on behalf of the Fund by a Fund Officer and on behalf of the Auction Agent
by an Authorized Officer. Communications shall be effective when received at the
proper address.
7.3 Entire Agreement. This Agreement contains the entire agreement
among the parties relating to the subject matter hereof, and there are, no other
representations, endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties.
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.
7.5 Amendment; Waiver. (a) This Agreement shall not be deemed or
construed to be modified, amended, rescinded, cancelled or waived, in whole or
in part, except by a written instrument signed by a duly authorized
representative of the party to be charged. The Fund shall notify the Auction
Agent and each Broker-Dealer of any change in the Fund's Declaration of Trust,
as amended and restated as of the date hereof, prior to the effective date of
any such change.
(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 rights or remedies with respect to any
subsequent breach.
7.6 Successors and Assigns. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the respective successors of each part
the Fund and the Auction Agent.
7.7 Limitation of Liability. Pursuant to the provisions of Article V,
Section 5.5 of the Fund's Declaration of Trust, as amended or restated as of the
date hereof, this Agreement is entered into by the trustees of the Fund not
individually, but as trustees under such Declaration of Trust and the
obligations of the Fund hereunder are not binding upon any such trustees or
share-
26
holders of the Fund, individually, but bind only the trust estate.
7.8 Severability. If any clause, provision or section hereof shall be
ruled invalid or unenforceable by any court of competent jurisdiction, the
invalidity or unenforceability of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections hereof.
7.9 Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
7.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
27
IN WITNESS WHEREOF, the parties hereto have caused this
Auction Agency Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the date first above written.
VAN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ADVANTAGE
MUNICIPAL INCOME
TRUST II
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
BANKERS TRUST COMPANY
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
28
EXHIBITS
EXHIBIT A - Form of Broker-Dealer Agreement
EXHIBIT B - Form of Master Purchaser's Letter
EXHIBIT C - Settlement Procedures
EXHIBIT D:- Form of APS Provisions
EXHIBIT E - Form of Notice of Auction Dates
EXHIBIT F - Form of Notice of Proposed Change of Length of
Rate Period
EXHIBIT G - Form of Notice of Change of Length of Rate Period
EXHIBIT H - Form of Notice of Determination Not to Change Length of
Rate Period
EXHIBIT I - Form of Notice of Cure of Failure to Deposit
EXHIBIT J - Form of Notice of Subsequent Cure of Failure to
Deposit
EXHIBIT K - Form of Notice of Capital Gain and Taxable
Ordinary Income Dividend