Exhibit 99.2(k)(4)
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AUCTION AGENT AGREEMENT
between
MUNIYIELD QUALITY FUND II, INC.
and
THE BANK OF NEW YORK
Dated as of [__], 2005
Relating to
AUCTION MARKET PREFERRED STOCK
("AMPS"),
Series D
of
MUNIYIELD QUALITY FUND II, INC.
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THIS AUCTION AGENT AGREEMENT, dated as of [__], 2005, is between
MUNIYIELD QUALITY FUND II, INC., a Maryland corporation (the "Company"), and
THE BANK OF NEW YORK, a New York banking corporation.
The Company proposes to duly authorize and issue 400 shares of Auction
Market Preferred Stock, Series D ("Series D AMPS") with a par value of $.10
per share and a liquidation preference of $25,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared),
pursuant to the Company's Articles Supplementary (as defined below). The
Series D AMPS are sometimes referred to as the "AMPS." A separate Auction (as
defined below) will be conducted for the AMPS. The Company desires that The
Bank of New York perform certain duties as agent in connection with each
Auction of shares of AMPS (in such capacity, the "Auction Agent"), and as the
transfer agent, registrar, dividend disbursing agent and redemption agent with
respect to the shares of AMPS (in such capacity, the "Paying Agent"), upon the
terms and conditions of this Agreement, and the Company hereby appoints The
Bank of New York as said Auction Agent and Paying Agent in accordance with
those terms and conditions (hereinafter generally referred to as the "Auction
Agent," except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Auction Agent agree as
follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
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1.1. Terms Defined by Reference to Articles Supplementary.
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Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.
1.2. Terms Defined Herein.
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As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context
otherwise requires:
(a) "Affiliate" shall mean any Person, other ▇▇▇▇ ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, made known to the Auction
Agent to be controlled by, in control of, or under common control
with, the Company or its successors.
(b) "Agent Member" of any Person shall mean such Person's agent
member of the Securities Depository that will act on behalf of a
Bidder.
(c) "Articles Supplementary" shall mean the Articles Supplementary
of the Company, establishing the powers, preferences and rights of
the AMPS, filed on [__], 2005 with the state of Maryland.
(d) "Auction" shall have the meaning specified in Section 2.1
hereof.
(e) "Auction Agent Acceptance Fee" means an acceptance fee as set
forth in a written agreement between the Auction Agent and the
Company.
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(f) "Auction Agent Fee" means the fees, other than the Auction
Agent Acceptance Fee, set forth in a written agreement signed by
the Auction Agent and the Company.
(g) "Auction Procedures" shall mean the Auction Procedures that
are set forth in Paragraph 10 of the Articles Supplementary.
(h) "Authorized Officer" shall mean each Vice President, Assistant
Vice President, and Assistant Treasurer of the Auction Agent
assigned to the Dealing and Trading Group of its Corporate Trust
Department, and every other officer or employee of the Auction
Agent designated as an "Authorized Officer" for purposes hereof in
a written communication to the Company.
(i) "Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
(j) "Company Officer" shall mean the Chairman and Chief Executive
Officer, the President, each Vice President (whether or not
designated by a number or word or words added before or after the
title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Company
and every other officer or employee of the Company designated as a
"Company Officer" for purposes hereof in a written notice from the
Company to the Auction Agent.
(k) "Holder" shall be a holder of record of one or more shares of
AMPS, listed as such in the stock register maintained by the
Paying Agent pursuant to Section 4.6 hereof.
(l) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
1.3. Rules of Construction.
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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.
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(d) All references herein to a particular time of day shall be to
Eastern Standard Time.
II. THE AUCTION.
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2.1. Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures.
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(a) The Articles Supplementary provide that the Applicable Rate on
shares of Series D AMPS for each Dividend Period therefor after
the Initial Dividend Period shall be the rate per annum that a
commercial bank, trust company or other financial institution
appointed by the Company advises results from implementation of
the Auction Procedures. The Board of Directors of the Company has
adopted a resolution appointing The Bank of New York as Auction
Agent for purposes of the Auction Procedures. The Auction Agent
hereby accepts such appointment and agrees that, on each Auction
Date, it shall follow the procedures set forth in this Section 2
and the Auction Procedures for the purpose of determining the
Applicable Rate for the AMPS for the next Dividend Period
therefor. 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 hereof to the
same extent as if such provisions were set forth fully herein. In
the case of any conflict between the terms of any document
incorporated herein by reference and the terms hereof, the Auction
Agent is, subject to its obligations as set forth in Section 6.1,
authorized to perform its duties according to the terms hereof,
and shall have no liability for so doing.
2.2. Preparation for Each Auction; Maintenance
of Registry of Existing Holders.
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(a) As of the date hereof, the Company shall provide the Auction
Agent with a list of the Broker-Dealers and shall cause to be
delivered 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 a list of Broker-Dealers with whom it has
signed such Broker-Dealer Agreements, and shall endeavor to keep
such list current and accurate and shall indicate thereon, or on a
separate list, the identity of each Existing Holder, if any, whose
most recent Order was submitted by a Broker-Dealer on such list
and resulted in such Existing Holder continuing to hold or
purchasing shares of 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 Company 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 Company 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
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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
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 paragraph 2 of the Articles
Supplementary concerning Special Dividend Periods and the
notification of a Special Dividend Period will be followed by the
Company 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) (i) On each Auction Date, the Auction Agent shall determine
the Reference Rate and the Maximum Applicable Rate. If the rate
obtained by the Auction Agent is not quoted on an interest or
discount basis, the Auction Agent shall convert the quoted rate to
an interest rate after consultation with the Company as to the
method of such conversion. Not later than 9:30 A.M. on each
Auction Date, the Auction Agent shall notify the Company and the
Broker-Dealers of the Reference Rate so determined and of the
Maximum Applicable Rate.
(ii) If the Reference Rate is the applicable LIBOR Rate and
such rate is to be based on rates supplied by LIBOR Dealers and
one or more of the LIBOR Dealers shall not provide a quotation for
the determination of the applicable LIBOR Rate, the Auction Agent
promptly shall notify the Company so that the Company can
determine whether to select a Substitute LIBOR Dealer or
Substitute LIBOR Dealers to provide the quotation or quotations
not being supplied by any LIBOR Dealer or LIBOR Dealers. The
Company promptly shall advise the Auction Agent of any such
selection. If the Company does not select any such Substitute
LIBOR Dealer or Substitute LIBOR Dealers, then the rates shall be
supplied by the remaining LIBOR Dealer or LIBOR Dealers.
(iii) If, after the date of this Agreement, there is any
change in the prevailing rating of AMPS by either of the rating
agencies (or Substitute Rating Agency or successor rating agency)
referred to in the definition of the Maximum Applicable Rate,
subject to the provisions of paragraph 12 of the Articles
Supplementary, thereby resulting in any change in the
corresponding applicable percentage or corresponding applicable
spread for the AMPS, as set forth in said definition (the
"Percentage or Spread"), the Company shall notify the Auction
Agent in writing of such change in the Percentage or Spread prior
to 9:00 A.M. on the Auction Date for AMPS next succeeding such
change. The Percentage or
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Spread for the AMPS on the date of this Agreement is as specified
in paragraph 10(a)(vii) of the Articles Supplementary. The Auction
Agent shall be entitled to conclusively rely on the last
Percentage or Spread of which it has received notice from the
Company (or, in the absence of such notice, the Percentage or
Spread set forth in the preceding sentence) in determining the
Maximum Applicable Rate as set forth in Section 2.2(d)(i) hereof.
(e) The Auction Agent shall maintain a current registry of
the Existing Holders of the shares of AMPS for purposes of each
Auction. The Company shall use its best 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, and the Broker-Dealer of each such Existing
Holder through which such Existing Holder purchased such shares.
The Auction Agent may conclusively rely upon, as 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 shares of
AMPS to another Person.
(f) In the event of any partial redemption of AMPS, upon
notice by the Company 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
shares) from the accounts of which shares have been called for
redemption and the person or department at such Agent Member to
contact regarding such redemption, and at least two Business Days
prior to the Auction preceding the date of redemption with respect
to shares of AMPS being partially redeemed, 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 shares are to be redeemed) the number of shares of
AMPS of each such Existing Holder, if any, to be redeemed by the
Company, 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 shares of AMPS shown
in the Auction Agent's registry of Existing Holders.
(i) The Auction Agent shall register a transfer of the
ownership of shares of AMPS from an Existing Holder to another
Existing Holder, or to another Person if permitted by the Company,
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
Agreements, by such Existing Holder or by the Agent Member of such
Existing Holder. 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 next
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preceding the applicable Auction Date. The Auction Agent shall
rescind a transfer made on the registry of the Existing Holders of
any shares of 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 shares of AMPS and the seller
failed to deliver such shares or (ii) sold any shares of AMPS and
the purchaser failed to make payment to such Person upon delivery
to the purchaser of such shares.
(g) The Auction Agent may, but shall not be obligated, to request
that the Broker-Dealers, as set forth in Section 3.2(c) of the
Broker-Dealer Agreements, provide the Auction Agent with a list of
their respective customers that such Broker-Dealers believe are
Beneficial Owners of shares 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 relevant
Broker-Dealer and the Company; provided, however, that the Auction
Agent reserves the right and is authorized to disclose any such
information if (i) 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, (ii) it is advised by its counsel that its failure to
do so would be unlawful or (iii) failure to do so would expose the
Auction Agent to loss, liability, claim, damage or expense for
which it has not received indemnity or security satisfactory to
it.
2.3. Auction Schedule.
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The Auction Agent shall conduct Auctions in accordance with the schedule
set forth below. Such schedule may be changed by the Auction Agent with the
consent of the Company, which consent shall not be withheld unreasonably. The
Auction Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective. The Auction Agent will follow The Bond Market
Association's Market Practice U.S. Holiday Recommendations for shortened
trading days for bond markets (the "BMA Recommendation") unless the Auction
Agent is instructed otherwise by the Company. In the event of a BMA
Recommendation on an Auction Date, the Submission Deadline will be 11:30 A.M.
instead of 1:00 P.M. and as a result the notice of Auction results will occur
at an earlier time.
Time Event
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By 9:30 A.M. Auction Agent advises the Company and the
Broker-Dealers of the Reference Rate and
the Maximum Applicable Rate as set forth
in Section 2.2(d)(i) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Paragraph 10(c)(i) of the
Articles Supplementary. Submission
deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations
pursuant to Paragraph 10(d)(i) of the
Articles Supplementary.
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By approximately Auction Agent advises the Company of the
3:00 P.M. results of the Auction as provided in
Paragraph 10(d)(ii) of the Articles
Supplementary.
Submitted Bids and Submitted Sell Orders
are accepted and rejected in whole or in
part and shares of AMPS allocated as
provided in Paragraph 10(e) of the
Articles Supplementary. Auction Agent
gives notice of the Auction results as set
forth in Section 2.4 hereof.
2.4. Notice of Auction Results.
-------------------------
On each Auction Date, the Auction Agent shall notify Broker-Dealers of
the results of the Auction held on such date by telephone or other mutually
acceptable electronic means as set forth in Paragraph (a) of the Settlement
Procedures. Unless instructed otherwise in writing by the Company, the Auction
Agent is authorized to release the Applicable Rate determined as a result of
the Auction for public dissemination.
2.5. Broker-Dealers.
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(a) Not later than 12:00 noon on each Auction Date, the Company
shall pay to the Auction Agent in Federal Funds or similar
same-day funds an amount in cash equal to (i) in the case of any
Auction Date immediately preceding a 7-Day Dividend Period, the
product of (A) a fraction the numerator of which is the number of
days in such Dividend Period (calculated by counting the first day
of such Dividend Period but excluding the last day thereof) and
the denominator of which is 360, times (B) 1/4 of 1%, times (C)
$25,000 times (D) the sum of the aggregate number of Outstanding
shares of AMPS and (ii) in the case of any Special Dividend
Period, the amount determined by mutual consent of the Company and
the Broker-Dealers pursuant to Section 3.5 of the Broker-Dealer
Agreements. The Auction Agent shall apply such moneys as set forth
in Section 3.5 of the Broker-Dealer Agreements and shall
thereafter remit to the Company any remaining funds paid to the
Auction Agent pursuant to this Section 2.5(a).
(b) The Company may designate an Affiliate or ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ 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 Company.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time
to time shall enter into such Broker-Dealer Agreements as the
Company shall request.
(e) Subject to Section 2.2(a), the Auction Agent shall maintain a
list of Broker-Dealers.
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2.6. Ownership of Shares of AMPS and Submission of Bids
by the Company and its Affiliates.
---------------------------------
Neither the Company nor any Affiliate of the Company may submit any Sell
Order or Bid, directly or indirectly, in any Auction, except that an Affiliate
of the Company that is a Broker-Dealer may submit a Sell Order or Bid on
behalf of a Beneficial Owner or a Potential Beneficial Owner. The Company
shall notify the Auction Agent if the Company or, to the best of the Company's
knowledge, any Affiliate of the Company becomes a Beneficial Owner of any
shares of AMPS. Any shares of AMPS redeemed, purchased or otherwise acquired
(i) by the Company shall not be reissued, except in accordance with the
requirements of the Securities Act of 1933, as amended, or (ii) by its
Affiliates shall not be transferred (other than to the Company). The Auction
Agent shall have no duty or liability with respect to enforcement of this
Section 2.6.
2.7. Access to and Maintenance of Auction Records.
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The Auction Agent shall afford to the Company, its agents, independent
registered public accounting firm and counsel, access at reasonable times
during normal business hours to review and make extracts or copies (at the
Company's sole cost and expense) of all books, records, documents and other
information concerning the conduct and results of Auctions, provided that any
such agent, accounting firm or counsel shall furnish the Auction Agent with a
letter from the Company requesting that the Auction Agent afford such person
access. The Auction Agent shall maintain records relating to any Auction for a
period of two years after such Auction (unless requested by the Company to
maintain such records for such longer period not in excess of four years, then
for such longer period which shall not be in excess of four years), and such
records, in reasonable detail, shall accurately and fairly reflect the actions
taken by the Auction Agent hereunder. The Company 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, accounting firm or counsel engaged to audit or review the results
of Auctions as permitted by this Section 2.7, provided that the Company
reserves the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to the Company. Any such agent, accounting firm 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, accounting firm or counsel may reserve the right to
disclose any such information if it is advised by its counsel that its failure
to do so would (i) be unlawful or (ii) expose it to liability, unless the
Broker-Dealer shall have offered indemnification satisfactory to such agent,
accountant or counsel. The Auction Agent shall have no liability in connection
with allowing access to the Company's books, records, documents and other
information pursuant to the terms of this Section 2.7 to the Company, its
agents, independent public accountants and counsel.
III. THE AUCTION AGENT AS PAYING AGENT.
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3.1. The Paying Agent.
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The Board of Directors of the Company has adopted a resolution
appointing The Bank of New York as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Company in connection with any
shares of AMPS (in such capacity, the "Paying Agent"). The Paying Agent hereby
accepts such appointment and agrees to act in accordance with its standard
procedures and the provisions of the Articles Supplementary which are
specified herein with respect to the shares of AMPS and as set forth in this
Section 3.
3.2. The Company's Notices to the Paying Agent.
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Whenever any shares of AMPS are to be redeemed, the Company promptly
shall deliver to the Paying Agent a Notice of Redemption upon the terms set
forth in Section 4(c) of the Articles Supplementary, which will be mailed by
the Company to each Holder at least five Business Days prior to the date such
Notice of Redemption is required to be mailed pursuant to the Articles
Supplementary. The Paying Agent shall have no responsibility to confirm or
verify the accuracy of any such Notice.
3.3. The Company to Provide Funds for Dividends and Redemptions.
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(a) Not later than noon on each Dividend Payment Date, the Company
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 Company shall give a Notice of Redemption, then by noon
of the date fixed for redemption, the Company shall deposit in
trust with the Paying Agent an aggregate amount of Federal Funds
or similar same-day funds sufficient to redeem such shares of AMPS
called for redemption and shall give the Paying Agent irrevocable
instructions and authority to pay the redemption price to the
Holders of shares of AMPS called for redemption upon surrender of
the certificate or certificates therefor.
3.4. Disbursing Dividends and Redemption Price.
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After receipt of the Federal Funds or similar same-day funds and
instructions from the Company described in Sections 3.3(a) and (b) above, the
Paying Agent shall pay to the Holders (or former Holders) entitled thereto (i)
on each corresponding Dividend Payment Date, dividends on the shares of AMPS
and (ii) on any date fixed for redemption, the redemption price of any shares
of AMPS called for redemption. The amount of dividends for any Dividend Period
to be paid by the Paying Agent to Holders will be determined by the Company as
set forth in Paragraph 2 of the Articles Supplementary. The redemption price
to be paid by the Paying Agent to the Holders of any shares of AMPS called for
redemption will be determined as set forth in Paragraph 4 of the Articles
Supplementary. The Company shall notify the Paying Agent in writing of a
decision to redeem any shares of AMPS on or prior to the date specified in
Section 3.2 above, and such notice by the Company to the Paying Agent shall
contain the information required to be stated in a Notice of Redemption
required to be mailed by the
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Company to such Holders. The Paying Agent shall have no duty to determine the
redemption price and may rely conclusively on the amount thereof set forth in
a Notice of Redemption.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
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4.1. Original Issue of Stock Certificates.
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On the Date of Original Issue for any share of AMPS, one certificate for
the AMPS shall be issued by the Company and registered in the name of Cede &
Co., as nominee of the Securities Depository, and countersigned by the Paying
Agent. The Company will give the Auction Agent prior written notice and
instruction as to the issuance and redemption of AMPS.
4.2. Registration of Transfer or Exchange of Shares.
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Except as provided in this Section 4.2, the shares of AMPS shall be
registered solely in the name of the Securities Depository or its nominee. If
the Securities Depository shall give notice of its intention to resign as
such, and if the Company shall not have selected a substitute Securities
Depository acceptable to the Paying Agent prior to such resignation, then upon
such resignation, the shares of AMPS, at the Company's request, 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 properly endorsed
for transfer with (a) all necessary endorsers' signatures guaranteed in such
manner and form as the Paying Agent may require by a guarantor reasonably
believed by the Paying Agent to be responsible, (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.
4.3. Removal of Legend.
-----------------
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing shares of AMPS shall be accompanied by an
opinion of counsel stating that such legend may be removed and such shares may
be transferred free of the restriction described in such legend, said opinion
to be delivered under cover of a letter from a Company Officer authorizing the
Paying Agent to remove the legend on the basis of said opinion.
4.4. Lost, Stolen or Destroyed Stock Certificates.
--------------------------------------------
The Paying Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Company
and by the Paying Agent, subject at all times to provisions of law, the
By-Laws of the Company governing such matters and resolutions adopted by the
Company with respect to lost, 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 Company to the Paying 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 Company to the Paying Agent
that such issuance will comply with provisions of applicable law and the
By-Laws and resolutions of the Company.
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4.5. Disposition of Canceled Certificates; Record Retention.
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The Paying Agent shall retain stock certificates which have been
canceled in transfer or in exchange and accompanying documentation in
accordance with applicable rules and regulations of the Securities and
Exchange Commission for two calendar years from the date of such cancellation.
The Paying Agent, upon written request by the Company, shall afford to the
Company, its agents and counsel access at reasonable times during normal
business hours to review and make extracts or copies (at the Company's sole
cost and expense) of such certificates and accompanying documentation. Upon
request by the Company at any time during this two-year period, the Paying
Agent shall deliver to the Company the canceled certificates and accompanying
documentation. The Company, at its expense, shall retain such records for a
minimum additional period of four calendar years from the date of delivery of
the records to the Company and shall make such records available during this
period at any time, or from time to time, for reasonable periodic, special, or
other examinations by representatives of the Securities and Exchange
Commission. The Company also shall undertake to furnish to the Securities and
Exchange Commission, upon demand, either at their principal office or at any
regional office, complete, correct and current hard copies of any and all such
records.
4.6. Stock Register.
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The Paying Agent shall maintain the stock register, which shall contain
a list of the Holders, the number of shares held by each Holder and the
address of each Holder. The Paying Agent shall record in the stock 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 stock register or any
other books of the Company in the possession of the Paying Agent, the Paying
Agent will notify the Company and secure instructions as to permitting or
refusing such inspection; provided, however, that the Auction Agent reserves
the right and is authorized to permit such inspection if (i) 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, (ii) it is advised by its counsel that its failure to do so would
be unlawful or (iii) failure to do so would expose the Auction Agent to loss,
liability, claim, damage or expense for which it has not received indemnity or
security satisfactory to it.
4.7. Return of Funds.
---------------
Any funds deposited with the Paying Agent by the Company for any reason
under this Agreement, including for the payment of dividends or the redemption
of shares of AMPS, that remain with the Paying Agent after 12 months shall be
repaid to the Company upon written request by the Company.
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V. REPRESENTATIONS AND WARRANTIES.
------------------------------
5.1. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to the Auction Agent that:
(i) the Company is duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Maryland, and has full power to execute and deliver this Agreement
and to authorize, create and issue the shares of AMPS;
(ii) the Company is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as
amended, as a closed-end, diversified, management investment
company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject as to such
enforceability to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equitable principles;
(iv) the forms of the certificate evidencing the shares of
AMPS comply with all applicable laws of the State of Maryland;
(v) the shares of AMPS have been duly and validly authorized
by the Company and, upon completion of the initial sale of the
shares of AMPS and receipt of payment therefor, will be validly
issued, fully paid and nonassessable;
(vi) at the time of the offering of the shares of AMPS, the
shares offered will be registered under the Securities Act of
1933, as amended, and no further action by or before any
governmental body or authority of the United States or of any
state thereof is required in connection with the execution and
delivery of this Agreement or will be required in connection with
the issuance of the shares of AMPS, except such action as required
by applicable state securities or insurance laws, all of which
action will have been taken;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the shares of AMPS do not and will not
conflict with, violate, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, the
Charter or the By-Laws of the Company, any law or regulation
applicable to the Company, any order or decree of any court or
public authority having jurisdiction over the Company, or any
mortgage, indenture, contract, agreement or undertaking to which
the Company is a party or by which it is bound; and
(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 shares of AMPS.
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5.2. Representations and Warranties of the Auction Agent.
---------------------------------------------------
The Auction Agent represents and warrants to the Company that 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.
VI. THE AUCTION AGENT.
-----------------
6.1. Duties and Responsibilities.
---------------------------
(a) The Auction Agent is acting solely as agent for the Company
hereunder and owes no fiduciary duties to any Person except as
specifically provided by this Agreement. The Auction Agent owes no
duties to any person other than the Company by reason of this
Agreement.
(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 willful misconduct 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 the
absence of willful misconduct unless the Auction Agent shall have
been negligent in ascertaining (or failing to ascertain) the
pertinent facts.
(d) 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; acts of war or terrorism;
epidemics; riots; interruptions, loss or malfunctions of
utilities; computer (hardware or software) or communications
services; accidents; labor disputes (including, without
limitation, strikes or work stoppages); 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. In no
event shall the Auction Agent be responsible or liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit), even
if the Auction Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
6.2. Rights of the Auction Agent.
---------------------------
(a) The Auction Agent may conclusively rely upon, and shall be
protected in acting or refraining from acting upon, any
communication authorized hereby and
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any written instruction, notice, request, direction, consent,
report, certificate, share certificate or other instrument, paper
or document reasonably believed by it to be genuine. The Auction
Agent shall not be liable for acting upon any telephone
communication or by other electronic means acceptable to the
parties authorized hereby which the Auction Agent believes in good
faith to have been given by the Company or by a Broker-Dealer. The
Auction Agent may record telephone communications with the Company
or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice, and
the written 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.
The Auction Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in
writing with the Company.
(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 have no obligation or liability with
respect to the registration or exemption therefrom of the AMPS
under the federal or state securities laws or with respect to the
sufficiency or the conformity of any transfer of the AMPS to the
terms of the Auction Agreement, the Broker-Dealer Agreements, the
AMPS or any other document contemplated thereby.
6.3. Auction Agent's Disclaimer.
--------------------------
The Auction Agent makes no representation as to the validity or the
adequacy of this Agreement, the Broker-Dealer Agreements or the AMPS.
6.4. Compensation, Expenses and Indemnification.
------------------------------------------
(a) The Company shall pay to the Auction Agent reasonable
compensation for all services rendered by it under this Agreement
and under the Broker-Dealer Agreements as shall be agreed by the
Auction Agent and the Company from time to time as shall be set
forth in a separate writing signed by the Company 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 materially the
Auction Agent's obligations hereunder or under the Broker-Dealer
Agreements.
(b) The Company 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
15
disbursements of its agents and counsel), except any expense,
disbursement or advance attributable to its negligence or willful
misconduct.
(c) The Company shall indemnify the Auction Agent, for, and hold
it harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on its part 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 itself against any claim of liability in connection with
its exercise or performance of any of its duties hereunder and
thereunder, except such as may result from its negligence or
willful misconduct.
VII. 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 Company may
terminate this Agreement at any time by so notifying the Auction
Agent, provided that if any AMPS remain outstanding the Company
shall have entered into an agreement in substantially the form of
this Agreement with a successor auction agent. The Auction Agent
may terminate this Agreement upon prior notice to the Company on
the date specified in such notice, which date shall be no earlier
than 60 days after delivery of such notice. If the Auction Agent
resigns while any shares of AMPS remain outstanding, the Company
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 Company and the Auction Agent
under this Agreement shall cease upon termination of this
Agreement. The Company's representations, warranties, covenants
and obligations to the Auction Agent under Sections 5 and 6.4
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 Company's
request, deliver promptly to the Company copies of all books and
records maintained by it in connection with its duties hereunder,
and (iii) at the request of the Company, transfer promptly to the
Company or to any successor auction agent any funds deposited by
the Company 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.
(c) If the AMPS shall no longer settle through an electronic book
entry system, the Auction Agent (but not necessarily the Paying
Agent) shall cease to perform its duties hereunder, and under any
Broker-Dealer Agreement.
7.2. Communications.
--------------
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Except for (i) communications authorized to be made by telephone (or by
other electronic means acceptable to the parties) 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 Company, MUNIYIELD QUALITY FUND II, INC.
addressed to: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction The Bank of New York
Agent, addressed to: Corporate Trust-Dealing and Trading Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Auction Desk
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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 Company by a Company
Officer and on behalf of the Auction Agent by an Authorized Officer.
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
inferred, between the parties relating to the subject matter hereof, except
for agreements relating to the compensation of the Auction Agent.
7.4. Benefits.
--------
Nothing herein, express or implied, shall give to any Person, other than
the Company, 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, 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. The Company shall
notify the Auction Agent of any change in the Articles
17
Supplementary prior to the effective date of any such change. If
any such change in the Articles Supplementary materially increases
the Auction Agent's obligations hereunder, the Company shall
obtain the written consent to the Auction Agent prior to the
effective date of 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 right or remedy 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 and permitted assigns of each of the
Company 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.
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.
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.
7.9. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed in said State.
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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.
MUNIYIELD QUALITY FUND II, INC.
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-----------------------------------
Name:
Title:
19