EXHIBIT (K)(3)
▇▇▇▇▇▇▇ RREEF REAL ESTATE FUND II, INC.
___________________________
AUCTION AGENCY AGREEMENT
dated as of November __, 2003
Relating to
Auction Preferred Stock
of
▇▇▇▇▇▇▇ RREEF Real Estate Fund II, Inc.
____________________________
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
This Auction Agency Agreement (this "Agreement"), dated as of
November __, 2003, is between ▇▇▇▇▇▇▇ RREEF Real Estate Fund II, Inc. (the
"Fund") and Deutsche Bank Trust Company Americas, a New York corporation.
The Fund proposes to issue 2,800 shares of Series M Auction
Preferred Stock, 2,800 shares of Series T Auction Preferred Stock, 2,800
shares of Series W Auction Preferred Stock, 2,800 shares of Series Th Auction
Preferred Stock and 2,800 shares of Series F Auction Preferred Stock, par
value $.01 per share, liquidation preference $25,000 per share (together the
"Preferred Shares"), pursuant to the Fund's Articles Supplementary (as defined
below).
The Fund desires that Deutsche Bank Trust Company Americas
perform certain duties as agent in connection with each Auction of Preferred
Shares (in such capacity, the "Auction Agent"), and as the transfer agent,
registrar, dividend paying agent and redemption agent with respect to the
Preferred Shares (in such capacity, the "Paying Agent"), upon the terms and
conditions of this Agreement, and the Fund hereby appoints Deutsche Bank Trust
Company Americas 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 Fund and the Auction Agent agree as
follows:
1. Definitions and Rules of Construction.
1.1. Terms Defined by Reference to the Articles Supplementary.
Capitalized terms not defined herein shall have the respective
meanings specified in the Articles Supplementary.
1.2. Terms Defined Herein.
As used herein, the following terms shall have the following
meanings, unless the context otherwise requires:
(a) "Agent Member" of any Person shall mean such Person's
agent member of the Securities Depository that will act on behalf of a Bidder.
(b) "Articles Supplementary" shall mean the Articles
Supplementary Creating and Fixing the Rights of Auction Preferred Stock filed by
the Fund in the office of the State Department of Assessments and Taxation of
the State of Maryland.
(c) "Auction" shall have the meaning specified in Section
2.1 hereof.
(d) "Auction Procedures" shall mean the Auction
Procedures that are set forth in Part II of the Articles Supplementary.
(e) "Authorized Officer" shall mean each Managing
Director, Vice President, Assistant Vice President and Associate of the Auction
Agent and every other officer or employee of the Auction Agent designated as an
"Authorized Officer" for purposes hereof in a written communication from the
Auction Agent to the Fund.
(f) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a Broker-Dealer substantially in the form attached
hereto as Exhibit A.
(g) "Fund Officer" shall mean the Chairman, the
President, each Vice President (whether or not designated by a number or word or
words added before or after the title "Vice President"), the Secretary, the
Treasurer, each Assistant Secretary and each Assistant Treasurer of the Fund and
every other officer or employee of the Fund designated as a "Fund Officer" for
purposes hereof in a notice from the Fund to the Auction Agent.
(h) "Holder" shall be a holder of record of one or more
Preferred Shares, listed as such in the share register maintained by the Paying
Agent pursuant to Section 4.6 hereof.
(i) "Interest Equivalent" means a yield on a 360-day
basis of a discount basis security which is equal to the yield on an equivalent
interest-bearing security.
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.
(a) The Articles Supplementary provide that the
Applicable Rate on the Preferred Shares for each Dividend Period therefore after
the initial Dividend Period shall be the rate per annum that a commercial bank,
trust company or other financial institution appointed by the Fund advises
results from the implementation of the Auction Procedures. The Board of
Directors of the Fund has adopted a resolution appointing Deutsche Bank Trust
Company
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Americas as Auction Agent for purposes of the Auction Procedures. The Auction
Agent hereby accepts such appointment and agrees that, on each Auction Date, it
shall follow the procedures set forth in this Section 2 and the Auction
Procedures for the purpose of determining the Applicable Rate for any series of
the Preferred Shares for such series'next Dividend Period. Each periodic
operation of such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction
Procedures are incorporated herein by reference in their entirety and shall be
deemed to be a part hereof to the same extent as if such provisions were set
forth fully herein.
2.2. Preparation for Each Auction; Maintenance of Registry of
Existing Holders.
(a) As of the date hereof, the Fund shall provide the
Auction Agent with a list of the Broker-Dealers and shall 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 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 purchase Preferred Shares. Not later than five Business Days prior to
any Auction Date for which any change in such list of Broker-Dealers is to be
effective, the Fund shall notify the Auction Agent in writing of such change
and, if any such change is the addition of a Broker-Dealer to such list, the
Fund shall cause to be delivered to the Auction Agent for execution by the
Auction Agent a Broker-Dealer Agreement signed by such Broker-Dealer. The
Auction Agent shall have entered into a Broker-Dealer Agreement with each
Broker-Dealer prior to the participation of any such Broker-Dealer in any
Auction.
(b) In the event that the Auction Date for any Auction
shall be changed after the Auction Agent shall have given the notice, 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 Section 4 of Part I of
the Articles Supplementary concerning Special Dividend Periods and the
notification of a Special Dividend Period will be followed by the Fund and, to
the extent applicable, the Auction Agent, and the provisions contained therein
are incorporated herein by reference in their entirety and shall be deemed to be
a part of this Agreement to the same extent as if such provisions were set forth
fully herein.
(d) (i) On each Auction Date, the Auction Agent shall
determine the `AA' Financial Composite Commercial Paper Rate or the Treasury
Index Rate, as the case may be, and the Maximum Rate. If the `AA' Financial
Composite Commercial Paper Rate or the Treasury Index Rate, as the case may be,
is not quoted on an interest basis but is quoted on a discount basis, the
Auction Agent shall convert the quoted rate to an `interest equivalent', or, 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 Fund as to the method of such conversion. Not later than
9:30 A.M. on each Auction Date, the Auction Agent shall
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notify the Fund and the Broker-Dealers of the 'AA' Financial Composite
Commercial Paper Rate or the Treasury Index Rate, as the case may be, so
determined and of the Maximum Rate.
(ii) If the 'AA' Financial Composite Commercial
Paper Rate is to be based on rates supplied by Commercial Paper Dealers and one
or more of the Commercial Paper Dealers shall not provide a quotation for the
determination of the applicable 'AA' Financial Composite Commercial Paper Rate,
the Auction Agent immediately shall 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
promptly shall advise the Auction Agent of any such selection. If the Fund does
not select any such substitute Commercial Paper Dealer or substitute Commercial
Paper Dealers, then the rates shall be supplied by the remaining Commercial
Paper Dealer or Commercial Paper Dealers.
(e) (i) The Auction Agent shall maintain a current
registry of the Existing Holders of the Preferred Shares for purposes of each
individual Auction. The Fund shall use commercially reasonable efforts to
provide or cause to be provided to the Auction Agent within ten Business Days
following the date of the Closing a list of the initial Existing Holders of
Preferred Shares, and the Broker-Dealer of each such Existing Holder through
which such Existing Holder purchased such shares. The Auction Agent may 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 Preferred Shares to another Person.
(ii) In the event of any partial redemption of
Preferred Shares, upon notice by the Fund to the Auction Agent of such partial
redemption, the Auction Agent promptly shall request the Securities Depository
to notify the Auction Agent of the identities of the Agent Members (and the
respective numbers of 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. At least two Business Days prior to the Auction
preceding the date of redemption, the Auction Agent shall request each Agent
Member so identified to disclose to the Auction Agent (upon selection by such
Agent Member of the Existing Holders whose shares are to be redeemed) the number
of Preferred Shares of each such Existing Holder, if any, to be redeemed by the
Fund, provided that the Auction Agent has been furnished with the name and
telephone number of a person or department at such Agent Member from which it is
to request such information. In the absence of receiving any such information
with respect to an Existing Holder, from such Existing Holder's Agent Member or
otherwise, the Auction Agent may continue to treat such Existing Holder as
having ownership of the number of Preferred Shares shown in the Auction Agent's
registry of Existing Holders.
(iii) The Auction Agent shall register a transfer
of the ownership of Preferred Shares from an Existing Holder to another Existing
Holder, or to another Person if permitted by the Fund, only if (A) such transfer
is made pursuant to an Auction or (B) if such transfer is made other than
pursuant to an Auction, the Auction Agent has been notified of such transfer in
writing, in a notice substantially in the form of Exhibit B 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
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is received by the Auction Agent by 3:00 P.M. on the Business Day next preceding
the applicable Auction Date. The Auction Agent shall rescind a transfer made on
the registry of the Existing Holders of any Preferred Shares if the Auction
Agent has been notified in writing, in a notice substantially in the form of
Exhibit C to the Broker-Dealer Agreement, by the Agent Member or the
Broker-Dealer of any Person that (i) purchased any Preferred Shares and the
seller failed to deliver such shares or (ii) sold any Preferred Shares and the
purchaser failed to make payment to such Person upon delivery to the purchaser
of such shares.
(f) The Auction Agent may request that the Broker
Dealers, as set forth in Section 3.2(b) 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 Preferred Shares. 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 Fund, provided that the Auction Agent reserves the right to disclose any
such information if it is advised by its counsel that its failure to do so would
be unlawful.
2.3. Auction Schedule.
The Auction Agent shall conduct Auctions for the Preferred
Shares weekly in accordance with the schedule set forth below. Such schedule may
be changed by the Auction Agent with the consent of the Fund, which consent
shall not be withheld unreasonably. The Auction Agent shall give 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.
TIME EVENT
By 9:30 A.M. Auction Agent shall advise the Fund and the
Broker-Dealers of the 'AA' Financial
Composite Commercial Paper Rate or the
Treasury Index Rate, as the case may be, and
the Maximum Rate as set forth in Section
2.2(a) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 3(a) of Part II of the
Articles Supplementary. Submission deadline
is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent shall make determinations
pursuant to Section 4(a) of Part II of the
Articles Supplementary.
By approximately 3:00 P.M. Auction Agent shall advise the Fund of the
results of the Auction as provided in
Section 4(b) of Part II of the Articles
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TIME EVENT
Supplementary. Submitted Bids and Submitted
Sell Orders will be accepted and rejected in
whole or in part and Preferred Shares will
be allocated as provided in Section 5 of
Part II of the Articles Supplementary.
Auction Agent shall give 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
through the Auction Agent's Auction Processing System.
2.5. Broker-Dealers.
(a) Not later than 12:00 noon on each Dividend Payment
Date, the Fund 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 Dividend Period of less than one year, the product of
(A) a fraction the numerator of which is the number of days in such Dividend
Period (calculated by counting the first 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 Preferred Shares for which the Auction is conducted and (ii) in the
case of any Special Dividend Period, the amount determined by mutual consent of
the Fund 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 Fund any
remaining funds paid to the Auction Agent pursuant to this Section 2.5(a).
(b) The Fund shall not designate any Person to act as a
Broker-Dealer, or permit an Existing Holder or a Potential Beneficial Owner to
participate in Auctions through any Person other than a Broker-Dealer, without
the prior written approval of the Auction Agent, which approval shall not be
withheld unreasonably. Notwithstanding the foregoing, the Fund may, without
prior written approval of the Auction Agent, designate an Affiliate or UBS
Securities LLC to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Fund.
(d) Subject to Section 2.5(b) hereof, the Auction Agent
from time to time shall enter into such Broker-Dealer Agreements as the Fund
shall request.
(e) The Auction Agent shall maintain a list of
Broker-Dealers.
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2.6. Ownership of Preferred Shares and Submission of Bids by The
Fund and its Affiliates.
The Fund shall notify the Auction Agent if to the best of the
Fund's knowledge, any Affiliate of the Fund becomes a Beneficial Owner of any
Preferred Shares, except as set forth in the next sentence. An Affiliate of the
Fund that is a Broker-Dealer may submit a Sell Order or Bid on behalf of a
Beneficial Owner or a Potential Beneficial Owner. For purposes of this Section
2.6, a Broker-Dealer shall not be an affiliate solely because one or more of the
directors or executive officers of the Broker-Dealer or of any person controlled
by, in control of or under common control with such Broker-Dealer is a director
of the Fund. 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.
The Auction Agent shall afford to the Fund, its agents,
independent public accountants and counsel, access at reasonable times during
normal business hours to review and make extracts or copies (at the Fund's sole
cost and expense) of all books, records, documents and other information
concerning the Auction Agent's Services hereunder. The Auction Agent shall
maintain records relating to any Auction for a period of at least two years
after such Auction (unless requested by the Fund to maintain such records for
such longer period not in excess of four years, then for such longer period),
and such records, in reasonable detail, shall accurately and fairly reflect the
actions taken by the Auction Agent hereunder. At the end of such period, if
requested in writing, the Auction Agent shall deliver such records to the Fund.
3. The Auction Agent as Paying Agent.
3.1. The Paying Agent.
The Board of Directors of the Fund has adopted another
resolution appointing Deutsche Bank Trust Company Americas as auction agent,
transfer agent, dividend paying agent and registrar for the Fund in connection
with any Preferred Shares (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 Preferred Shares and as set forth in this
Section 3.
3.2. The Fund's Notices to the Paying Agent.
Whenever any Preferred Shares are to be redeemed, the Fund
promptly shall deliver to the Paying Agent a Notice of Redemption, which will be
delivered by the Paying Agent to each Holder within one business day of receipt.
The Paying Agent shall have no responsibility to confirm or verify the accuracy
of any such Notice.
3.3. The Fund to Provide Funds for Dividends and Redemptions.
(a) Not later than noon on each Dividend Payment Date,
the Fund shall deposit with the Paying Agent an aggregate amount of Federal
Funds or similar same-day funds equal to the declared dividends to be paid to
Holders on such Dividend Payment Date, and shall
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give the Paying Agent irrevocable instructions to apply such funds to the
payment of such dividends on such Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then
by 12:00 noon of the date fixed for redemption, the Fund shall deposit in trust
with the Paying Agent an aggregate amount of Federal Funds or similar same-day
funds sufficient to redeem such Preferred Shares called for redemption and shall
give the Paying Agent irrevocable instructions and authority to pay the
redemption price to the Holders of Preferred Shares called for redemption upon
surrender of the certificate or certificates therefore.
3.4. Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar same-day funds
and instructions from the Fund described in Section 3.3 above, the Paying Agent
shall pay to the Holders (or former Holders) entitled thereto (i) on each
corresponding Dividend Payment Date, dividends on the Preferred Shares, and (ii)
on any date fixed for redemption, the redemption price of any Preferred Shares
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 Fund as set forth
in Section 2 of Part I of the Articles Supplementary. The redemption price to be
paid by the Paying Agent to the Holders of any Preferred Shares called for
redemption will be determined as set forth in Section 3 of Part I of the
Articles Supplementary. The Paying Agent shall have no duty to determine the
redemption price and may rely on the amount thereof set forth in a Notice of
Redemption.
4. The Paying Agent as Transfer Agent and Registrar.
4.1. Original Issue of Stock Certificates.
On the Date of Original Issue for any share of Preferred
Shares, one certificate for the Preferred Shares shall be issued by the Fund and
registered in the name of Cede & Co., as nominee of the Securities Depository,
and countersigned by the Paying Agent.
4.2. Registration of Transfer or Exchange Of Shares.
Except as provided in this Section 4.2, the Preferred Shares
shall be registered solely in the name of the Securities Depository or its
nominee. If the Securities Depository shall give notice of its intention to
resign as such, and if the Fund shall not have selected a substitute Securities
Depository acceptable to the Paying Agent prior to such resignation, then upon
such resignation the Preferred Shares, at the Fund'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 to be properly endorsed for
transfer with (a) all necessary endorsers' signatures guaranteed in such manner
and form and by such guarantor as the Paying Agent may reasonably require, (b)
such assurances as the Paying Agent shall deem necessary or appropriate to
evidence the genuineness and effectiveness of each necessary endorsement and (c)
satisfactory evidence of compliance with all applicable laws relating to the
collection of taxes in connection with any registration of transfer or exchange
or funds necessary for the payment of such taxes. If the certificate or
certificates for Preferred Shares are not held by the Securities Depository or
its nominee,
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payments upon transfer of shares in an Auction shall be made in Federal Funds or
similar same-day funds to the Auction Agent against delivery of certificates
therefore.
4.3. Removal of Legend.
Any request for removal of a legend indicating a restriction
on transfer from a certificate evidencing Preferred Shares 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 Fund 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 Fund and by the Paying Agent, subject at all times to
provisions of law, the Articles Supplementary governing such matters and
resolutions adopted by the Fund with respect to lost, stolen or destroyed
securities. The Paying Agent may issue new certificates in exchange for and upon
the cancellation of mutilated certificates. Any request by the Fund to the
Paying Agent to issue a replacement or new certificate pursuant to this Section
4.4 shall be deemed to be a representation and warranty by the Fund to the
Paying Agent that such issuance will comply with provisions of applicable law
and the Articles Supplementary and resolutions of the Fund.
4.5. Disposition of Canceled Certificates; Record Retention.
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 (the "SEC") for at least two calendar years from the date of such
cancellation. The Paying Agent, upon written request by the Fund, shall afford
to the Fund, its agents and counsel access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund's sole cost
and expense) of such certificates and accompanying documentation. Upon request
by the Fund at any time after the expiration of this two-year period, the Paying
Agent shall deliver to the Fund the canceled certificates and accompanying
documentation. The Fund, at its expense, shall retain such records for a minimum
additional period of at least four calendar years from the date of delivery of
the records to the Fund 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 SEC. The Fund also shall undertake to
furnish to the SEC, upon demand, either at its principal office or at any
regional office, complete, correct and current hard copies of any and all such
records. Thereafter, such records shall not be destroyed by the Fund without the
approval of the Paying Agent, which approval shall not be withheld unreasonably,
but will be safely stored for possible future reference.
4.6. Return of Funds.
Any funds deposited with the Paying Agent by the Fund for any
reason under this Agreement, including for the payment of dividends or the
redemption of Preferred Shares, that
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remain with the Paying Agent after 12 months shall be repaid to the Fund upon
written request by the Fund.
5. Representations and Warranties.
5.1. Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(i) the Fund is a duly incorporated and validly existing
corporation in good standing under the laws of the State of Maryland, and has
full corporate power to execute and deliver this Agreement and to authorize,
create and issue the Preferred Shares;
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes the legal, valid and binding
obligation of the Fund, enforceable against the Fund in accordance with its
terms, subject 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;
(iii) the form of the certificates evidencing the Preferred
Shares comply with all applicable laws of the State of Maryland;
(iv) when issued, the shares of Preferred Shares will have
been duly registered under the Securities Act of 1933, as amended, and no
further action by or before any governmental body or authority of the United
States or of any state thereof is required in connection with the execution and
delivery of this Agreement or will be required in connection with the issuance
of the Preferred Shares;
(v) the execution and delivery of this Agreement and the
issuance and delivery of the Preferred Shares 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 Articles of Incorporation (as amended by one or
more Articles Supplementary) or the By-Laws of the Fund, any order or decree of
any court or public authority having jurisdiction over the Fund, or any
mortgage, indenture, contract, agreement or undertaking to which the Fund is a
party or by which it is bound the effect of which conflict, violation, default
or breech would be material to the Fund, taken as a whole; and
(vi) 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 Preferred Shares.
5.2. Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Fund that:
(i) the Auction Agent is duly organized and is validly
existing as a banking corporation in good standing under the laws of the State
of New York, and has the corporate power to enter into and perform its
obligations under this Agreement; and
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(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal, valid and
binding obligation of the Auction Agent, enforceable against the Auction Agent
in accordance with its terms, subject 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.
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 Person except as provided by
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 bad faith or negligence on its
part, the Auction Agent shall not be liable for any action taken, suffered or
omitted by it or for any error of judgment made by it in the performance of its
duties under this Agreement.
6.2. Rights of the Auction Agent.
(a) The Auction Agent may rely upon, and shall be
protected in acting or refraining from acting upon, any communication authorized
hereby and 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 authorized hereby which the Auction Agent
reasonably believes in good faith to have been given by the Fund or by a
Broker-Dealer. The Auction Agent may record telephone communications with the
Fund or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its
choice, and the 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 reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise
its rights hereunder either directly or by or through agents or attorneys.
6.3. Compensation, Expenses and Indemnification.
(a) The Fund shall pay to the Auction Agent from time to
time reasonable compensation for all services rendered by it under this
Agreement and under the Broker-Dealer Agreements as shall be set forth in a
separate writing signed by the Fund and the Auction Agent,
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subject to adjustments if the Preferred Shares no longer are held of record by
the Securities Depository or its nominee or if there shall be such other change
as shall increase or decrease materially the Auction Agent's obligations
hereunder or under the Broker-Dealer Agreements.
(b) The Fund shall reimburse the Auction Agent upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Auction Agent in accordance with any provision of this Agreement and of
the Broker-Dealer Agreements (including the reasonable compensation, expenses
and disbursements of its agents and counsel), except any expense, disbursement
or advance attributable to its 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
negligence or bad faith on the part of the Auction Agent arising out of or in
connection with its agency under this Agreement and under the Broker-Dealer
Agreements, including the costs and expenses of defending 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 bad faith.
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 at any time by so notifying the Auction Agent, provided that, if any
Preferred Shares remain outstanding, the Fund shall have entered into an
agreement with a successor auction agent. The Auction Agent may terminate this
Agreement upon prior notice to the Fund on the date specified in such notice,
which date shall be no earlier than 60 days after delivery of such notice;
provided, however, in the event that the Auction Agent has not been paid for its
services, such date shall be no earlier than 30 days after delivery of such
notice.
(b) Except as otherwise provided in this Section 7.1(b),
the respective rights and duties of the Fund and the Auction Agent under this
Agreement with respect to Preferred Shares shall cease upon termination of this
Agreement. The Fund's representations, warranties, covenants and obligations to
the Auction Agent under Sections 5 and 6.3 hereof shall survive the termination
of the Agreement. Upon termination of this Agreement, the Auction Agent shall
(i) resign as Auction Agent under the Broker-Dealer Agreements, (ii) at the
Fund's request, deliver promptly to the Fund copies of all books and records
maintained by it in connection with its duties hereunder, and (iii) at the
request of the Fund, transfer promptly to the Fund or to any successor auction
agent any funds deposited by the Fund with the Auction Agent (whether in its
capacity as Auction Agent or as Paying Agent) pursuant to this Agreement which
have not been distributed previously by the Auction Agent in accordance with
this Agreement.
7.2. Communications.
Except for (i) communications authorized to be made by
telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications in connection with Auctions (other than those expressly required
to be in writing), all notices, requests and other
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communications to any party hereunder shall be in writing (including telecopy or
similar writing) and shall be given to such party at its address or telecopier
number set forth below:
If to the Fund, ▇▇▇▇▇▇▇ RREEF Real Estate Fund II, Inc.
addressed to: c/o Deutsche Asset Management, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent, Deutsche Bank Trust Company Americas
addressed to: as Auction Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Auction Rate Securities
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone 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 Fund by
a Fund 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 implied, between the parties relating to the subject matter hereof,
except for agreements relating to the compensation of the Auction Agent.
7.4. Benefits.
Nothing herein, express or implied, shall give to any Person,
other than the 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, canceled or waived, in whole or in part, except by
a written instrument signed by the parties hereto.
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(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 Fund and the Auction Agent. This Agreement may not be assigned by either
party hereto absent the prior written consent of the other party, which consent
shall not be withheld unreasonably.
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.
▇▇▇▇▇▇▇ RREEF REAL ESTATE FUND II, INC.
____________________________________________
By:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS
____________________________________________
By:
Title:
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