<DOCUMENT>
<TYPE>EX-99.13
<SEQUENCE>19
<FILENAME>trustcoagreement.txt
<DESCRIPTION>EXHIBIT 99.13(C)
<TEXT>
-------------------------------------------------------------------------------

                            TRUST COMPANY AGREEMENT

                                    between

                        PATRIOT PREMIUM DIVIDEND FUND II


                                      and

                      MANUFACTURERS HANOVER TRUST COMPANY

                         Dated as of December 21, 1989

                                  Relating to

                   DUTCH AUCTION RATE TRANSFERABLE SECURITIES

                     PREFERRED STOCK SERIES A AND SERIES B

                                       of

                        PATRIOT PREMIUM DIVIDEND FUND II

-------------------------------------------------------------------------------



<PAGE>


      TRUST  COMPANY  AGREEMENT  dated  as  of December 21, 1989 between Patriot
Premium Dividend Fund II, a Massachusetts Business  Trust  (the  "Company"), and
Manufacturers Hanover Trust Company, a New York corporation, acting  through its
Corporate Trust Department (the "Trust Company").

      The   Company   proposes  to  issue  598  shares  of  Dutch  Auction  Rate
Transferable Securities  Preferred Stock Series A (the "Series A DARTS") and 598
shares of Dutch Auction Rate  Transferable  Securities  Preferred Stock Series B
(the  "Series  B  DARTS",  and  together with the Series A DARTS,  the  "DARTS")
pursuant to its Agreement and Declaration  of Trust and its By-Laws. The Company
desires that the Trust Company perform certain  duties  in  connection  with the
DARTS  upon the terms and conditions of this Agreement, and hereby appoints  the
Trust Company to act in the capacities set forth in this Agreement.

      NOW  THEREFORE,  in consideration of the premises and the mutual covenants
contained herein, the Company and the Trust Company agree as follows:

1.    Definitions and Rules of Construction.
      -------------------------------------

      1.1   Terms Defined by Reference to Restated Agreement and Declaration of
            Trust and the By-Laws.
            ---------------------

      Capitalized terms  not  defined  herein shall have the respective meanings
specified in the Declaration of Trust and the By-Laws.

      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 a member of, or
      participant in, the Securities Depository  that  will  act  on behalf of a
      Person and is identified as such in such Person's Purchaser's Letter.

                  (b)    "Auction"  shall  mean each periodic operation  of  the
      Auction Procedures that are set forth  in Section 6.9 of Article VI of the
      By-Laws.

                  (c)    "Auction Procedures"  shall mean the Auction Procedures
      that are set forth in Section 6.9 of Article VI of the By-Laws.

                  (d)    "Authorized  officer"  shall   mean  each  Senior  Vice
      President, Vice President, Assistant Vice President, Assistant Manager and
      Trust  Officer  of  the  Trust  Company  assigned to its  Corporate  Trust
      Department  and  every  other officer or employee  of  the  Trust  Company
      designated  as  an  "Authorized   officer"   for   purposes  hereof  in  a
      communication to the Company.

                  (e)    "Broker-Dealer  Agreement"  shall mean  each  agreement
      between the Trust Company and a Broker-Dealer substantially  in  the  form
      attached hereto as Exhibit A.

<PAGE>

                  (f)    "By-Laws"  shall  mean  the  By-Laws of the Company, as
      adopted by the Company's Board of Trustees on November  6,  1989,  and  as
      amended  on  December  14,  1989,  a  copy  of which is attached hereto as
      Exhibit B, as the same may be further amended from time to time.

                  (g)    "Company officer" shall mean  the Chairman of the Board
      of  Directors,  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 notice to the Trust Company.

                  (h)    DARTS  shall  mean  the Series A DARTS and the Series B
      DARTS.

                  (i)    "Declaration of Trust"  shall  mean  the  Agreement and
      Declaration of Trust of the Company, as filed by the Company on  September
      26,   1989  in  the  office  of  the  Secretary  of  the  Commonwealth  of
      Massachusetts  as  amended on December 14, 1989 and filed in the office of
      the Secretary of the Commonwealth of Massachusetts on December 14, 1989, a
      copy of which is attached hereto as Exhibit C.

                  (j)    "Fiscal  Year-End Dividend Period" with respect to each
      series of the DARTS shall mean  the Dividend Period for which the Dividend
      Payment Date is the first Dividend  Payment Date for such series occurring
      in the fiscal year following the fiscal  year  in  respect  of  which  the
      Company is obligated to pay Additional Dividends to the Holders.

                  (k)    "Purchaser's  Letter"  shall  mean a master purchaser's
      letter substantially in the form attached hereto as Exhibit D.

                  (l)    "Series  A  DARTS" shall mean the  Dutch  Auction  Rate
      Transferable Securities Preferred  Stock  Series A, liquidation preference
      $100,000 per share, to be issued by the Company.

                  (m)    "Series  B DARTS" shall mean  the  Dutch  Auction  Rate
      Transferable Securities Preferred  Stock  Series B, liquidation preference
      $100,000 per share, to be issued by the Company.

                  (n)    "Settlement  Procedures"   shall  mean  the  Settlement
      Procedures attached hereto as Exhibit E.

      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 shallinclude    the
      plural number and vice versa.


                                       3
<PAGE>

                  (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 the meaning, construction or effect of-any provision
      of this Agreement.

                  (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 By-Laws  provide  that  the  Applicable Rate on the
      shares  of  each series of the DARTS for each Dividend  Period  after  the
      initial Dividend  Period  for  such  series  shall,  except  under certain
      circumstances,  be  the  rate  per  annum  that  a  bank  or trust company
      appointed  by the Company advises results from the implementation  of  the
      Auction Procedures for such series of the DARTS. The Board of Directors of
      the Company  has  adopted  a  resolution  appointing Manufacturers Hanover
      Trust Company as Trust Company for purposes  of  implementing  the Auction
      Procedures  for each series of the DARTS.  The Trust Company 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 the DARTS.  Separate  Auctions  will be conducted with respect to
      each series of the DARTS.

                  (b)    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 for Each Auction; Maintenance of Registry of Beneficial
            Owners.
            ------

                  (a)    Not later than the Date of original  Issue, the Company
      will  provide  the Trust Company with a list of the Broker-Dealers  and  a
      manually signed copy of each Broker-Dealer Agreement. Not later than seven
      days prior to any  Auction  Date  for  which  any  change  in such list of
      Broker-Dealers  is  to  be  effective,  the Company will notify the  Trust
      Company in writing of such change and, if  any such change is the addition
      of a Broker-Dealer to such list, shall cause  to be delivered to the Trust
      Company  for  execution  by  the  Trust Company a Broker-Dealer  Agreement
      manually  signed  by such Broker-Dealer.  The  Trust  Company  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  Trust Company has given the notice pursuant to
      clause (vii) of paragraph (a)  of  the  Settlement  Procedures,  the Trust

                                       4
<PAGE>

      Company, by such means as the Trust Company 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 and 9:15 A.M. on the old Auction Date.

                  (c)    (i)   If  the  number  of Dividend Period Days for both
      series of DARTS is adjusted as provided in  Section 6.4 (b) (i) of Article
      VI of the By-Laws, not later than 21 days prior  to  the  first day of the
      first Dividend Period for such series of the DARTS for which  such  change
      is first to be effective, the Company shall provide the Trust Company with
      a  form of notice of such change to be sent to Existing Holders by Broker-
      Dealers  pursuant  to  Section 2.4(c) of the Broker-Dealer Agreements. The
      Trust Company shall provide  each  Broker-Dealer  with such form of notice
      not later than five days after receipt thereof from the Company.

                  (ii)   If  (a)  there is any change in the  credit  rating  of
either  series  of the DARTS referred  to  in  the  definition  of  the  Maximum
Applicable Rate by  either  rating agency (or any substitute or successor rating
agency) that results in any change in the Prevailing Rating for either series of
DARTS after the date of this  Agreement  or  (b)  if the most recent Auction for
either series of DARTS resulted in an Applicable Rate  equal  to  or higher than
the  percentage of the 60-day "AA" Composite Commercial Paper Rate specified  in
column I or column II of the table in the definition of Maximum Applicable Rate,
the Company  shall  notify  the  Trust  Company in writing of such change in the
Prevailing Rating or that the Applicable  Rate  exceeded such percentage and, in
each case, shall notify the Trust Company of the  corresponding  percentage (the
"Applicable  Percentage")  to  be  used  by  the Trust Company to calculate  the
Maximum Applicable Rate prior to 9:00 a.m. on  the  Auction Date for such series
of DARTS. The Applicable Percentage in effect on the  date of this Agreement for
the Series A DARTS and the Series B DARTS is 110%. The  Trust  Company  shall be
entitled  to  rely  on  the  last Applicable Percentage of which it has received
notice from the Company (or, in  the  absence  of  such  notice,  the Applicable
Percentage  set  forth  in  the  preceding sentence) in determining the  Maximum
Applicable Rate as set forth in Section 2.2(d) (i) hereof.

                  (d)    (i)  On each  Auction  Date  for  either  series of the
      DARTS,  the  Trust  Company  shall  determine  the  60-day  "AA" Composite
      Commercial  Paper  Rate,  the  Minimum  Applicable  Rate  and  the Maximum
      Applicable Rate. If the 60-day "AA" Composite Commercial Paper Rate is not
      quoted  on  an interest basis, the Trust Company shall convert the  quoted
      rate to its interest  equivalent  thereof as set forth in Section 6.2(eee)
      of Article VI of the By-Laws if the  rate obtained by the Trust Company is
      quoted on a discount basis or, if the  rate  obtained by the Trust Company
      is quoted on another basis, the Trust Company  shall  convert  such quoted
      rate to its interest equivalent after consultation with the Company  as to
      the  method  of  such conversion. Not later than 9:30 A.M. on each Auction
      Date for either series  of  the  DARTS, the Trust Company shall notify the
      Company and the Broker-Dealers of  the  60-day  "AA"  Composite Commercial
      Paper Rate and the Maximum Applicable Rate so determined.

                  (ii)  If the 60-day "AA" Composite Commercial  Paper  Rate is
to  be based on rates supplied by the Commercial Paper Dealers, and one or  more
of the  Commercial Paper Dealers shall fail to provide a quotation or quotations
for the determination  of  the  60-day "AA" Composite Commercial Paper Rate, the
Trust Company shall immediately notify  the  Company  so  that  the  Company can
determine  whether  to select a Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers  to  provide  the  quotation  or  quotations  not being

                                       5
<PAGE>

supplied  by  such  Commercial  Paper  Dealer  or  Commercial Paper Dealers. The
Company shall promptly advise the Trust Company of any such selection.

                  (e)    (i)  The Trust Company shall maintain a registry of the
      beneficial owners of the shares of each series  of  the  DARTS,  who shall
      constitute  Existing  Holders  of  shares  of such series for purposes  of
      Auctions, and shall indicate therein the identity of each Existing Holder,
      if any, on whose behalf each Broker-Dealer submitted the most recent Order
      in any Auction that resulted in such Existing Holder continuing to hold or
      purchasing shares of such series of the DARTS.  The  Trust  Company  shall
      keep  such  registry  current  and  accurate. The Company shall provide or
      cause the Broker-Dealers to provide on  its behalf to the Trust Company on
      the Date of Original Issue a list of the  initial  Existing Holders of the
      shares  of  each series of the DARTS and the respective  Broker-Dealer  of
      each such Existing  Holder  through  which  such Existing Holder purchased
      such shares of each series of the DARTS. The  Trust Company may rely upon,
      as  evidence  of the identities of the Existing Holders,  such  list,  the
      results of Auctions  and  notices  from  the  Broker-Dealer  of  each such
      Existing Holder with respect to such Existing Holder's transfer of  shares
      of  such  series  of  the  DARTS to another Person. Except as permitted by
      Sections 2.2(f), 2.7 and 4.7  hereof, the Trust Company shall not disclose
      this information to any other Person.

                  (ii)   In the event  of  any  partial  redemption of shares of
either series of the DARTS, the Trust Company shall, at least  two Business Days
prior to the next Auction for shares of such series, request the Agent Member of
each Existing Holder of shares of such series to disclose to the  Trust  Company
(upon selection by such Agent Member of the Existing Holders whose shares are to
be redeemed) the number of shares of DARTS of such series, if any, of each  such
Existing Holder, if any, which are subject to such redemption, provided that the
Trust  Company  has  been  furnished, at least three Business Days prior to such
Auction, with the name and telephone  number  of  a person or department at such
Agent Member from which it shall request such information.  Upon  the refusal of
the Agent Member to release such information, the Trust Company shall deliver to
such Agent Member a facsimile copy of such Existing Holder's Purchaser's Letter,
which authorizes and instructs such Agent Member to release such information  to
the Trust Company. In the absence of receiving any such information with respect
to  an  Existing  Holder,  the Trust Company may continue to treat such Existing
Holder as the beneficial owner  of  the  number  of shares of such series of the
DARTS shown in the Trust Company's registry.

                  (iii)    The  Trust Company shall be  required  to  register a
transfer of shares of the DARTS from an  Existing  Holder to another Person only
if  such  transfer  is  made  to a Person that has delivered  or  caused  to  be
delivered a signed Purchaser's  Letter  to  the  Trust  Company  and if (A) such
transfer is pursuant to an Auction or (B) the Trust Company has been notified in
writing  (I) in a notice substantially in the form of Exhibit E to  the  Broker-
Dealer Agreements,  by  an  Existing  Holder  or  the Broker-Dealer or the Agent
Member  of  such  Existing  Holder  of  such  transfer  or   (II)  in  a  notice
substantially in the form of Exhibit G to the Broker-Dealer Agreements,  by  the
Broker-Dealer  of  any Person that purchased or sold such shares of the DARTS in
an Auction of the failure  of  such  shares  of the DARTS to be transferred as a

                                       6
<PAGE>

result of such Auction. The Trust Company is not  required  to  accept  any such
notice for an Auction unless it is received by the Trust Company by 3:00 P.M. on
the Business Day preceding such Auction Date.

                  (f)    The  Trust  Company may request the Broker-Dealers,  as
      set forth in the Broker-Dealer Agreements,  to  provide  the Trust Company
      with a list of their respective customers that such Broker-Dealers believe
      are  Existing Holders of shares of either series of the DARTS.  The  Trust
      Company  shall  keep  confidential  such  registry of Existing Holders and
      shall not disclose the identities of the Existing  Holders  to  any Person
      other   than   the  Company  and  the  Broker-Dealer  that  provided  such
      information.

                  (g)    The  Trust  Company  is  not  required  to  accept  the
      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 Purchaser's Letter intending that such amendment
      is to take effect with  respect  to  an  Auction  unless  such Purchaser's
      Letter or such amendment is received by the Trust Company by  3:00 P.M. on
      the Business Day preceding such Auction Date.

      2.3   Auction Schedule.
            ----------------

      The Trust Company shall conduct Auctions for each series of the  DARTS  in
accordance  with  the  schedule set forth below. Such schedule may be changed by
the Trust Company with the  consent  of  the Company, which consent shall not be
unreasonably withheld. The Trust Company 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 on Auction Date                                Event
   --------------------                                -----

Between 9:30 A.M.                      Trust Company  advises  the  Company  and
                                       Broker-Dealers  of 60-day "AA"  Composite
                                       Commercial   Paper   Rate,   the  Minimum
                                       Applicable  Rate and  Maximum  Applicable
                                       Rate as set  forth in  Section  2.2(d)(i)
                                       hereof.

Between 9:30 A.M. and                  Trust Company assembles information
12:30 P.M.                             communicated  to it by Broker-Dealers as
                                       provided in Section  6.9(c) of Article VI
                                       of the  By-Laws.  Submission  Deadline is
                                       1:00  P.M.  or  such  other  time  on any
                                       Auction   Date  as  the   Trust   Company
                                       specifies.

Not earlier than 12:30 P.M.            Trust Company makes determinations
                                       pursuant to Section  6.9(d)(i) of Article
                                       VI of the By-Laws.

By approximately 3:00 P.M.             Trust Company advises Company of results
                                       of Auction as provided in Section 6.9 (d)
                                       (ii) of Article VI of the By-Laws.

                                       Submitted  Bids and Submitted Sell Orders
                                       are  accepted  and rejected and shares of

                                       7
<PAGE>

                                       the  DARTS   allocated   as  provided  in
                                       Section  6.9(e)  of  Article  VI  of  the
                                       By-Laws.

                                       Trust  Company  gives  notice of  Auction
                                       results  as set  forth in the  Settlement
                                       Procedures.

      2.4   Notice of Auction Results.
            -------------------------

      The  Trust  Company  shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.

      2.5   Broker-Dealers.
            --------------

                  (a)    Not later than 12:00 noon on each Dividend Payment Date
      for either series of the DARTS, the Company shall pay to the Trust Company
      an amount in cash equal to the product of (i) a fraction, the numerator of
      which is the number of  days  in  the  Dividend  Period  beginning  on the
      relevant  Dividend  Payment Date (calculated by counting the first day  of
      such  Dividend  Period  but  excluding  the  last  day  thereof)  and  the
      denominator of which  is  360  times  (ii)  1/4 of 1% times (iii) $100,000
      times (iv) the aggregate number of shares of such series of the DARTS then
      outstanding.  The Trust Company shall advise the  Company  of  the  amount
      referred to in the preceding sentence in respect of such Auction not later
      than 4:00 P.M.  on  the Business Day preceding such Dividend Payment Date.
      The Trust Company shall  apply  such monies as set forth in Section 2.5 of
      the Broker-Dealer Agreements. To  the  extent that any such moneys are not
      payable to a Broker-Dealer because Sufficient  Clearing Bids did not exist
      in the relevant Auction and shares of the DARTS  therefore continued to be
      held despite being subject to a Submitted Sell Order,  the  Trust  Company
      shall repay such money to the Company.

                  (b)    The  Company  shall  obtain  the  consent  of the Trust
      Company  prior  to  selecting any Person to act as a Broker-Dealer,  which
      consent shall not be unreasonably withheld.

                  (c)    The  Trust  Company  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  Trust  Company
      shall from time to time enter  into  such  Broker-Dealer Agreements as the
      Company shall request.

                  (e)    The  Trust Company shall maintain  a  list  of  Broker-
      Dealers.

      2.6   Ownership of Shares of the DARTS and Submission of Bids by the
            Company and Affiliates.
            ----------------------

      The Company shall notify the Trust Company if the Company or any affiliate
(as such term is defined under  the  Investment  Company  Act  of  1940)  of the
Company  acquires any shares of the DARTS. Neither the Company nor any affiliate
of the Company  shall  submit  any order in any Auction. The Trust Company shall
have no duty or liability with respect to the enforcement of this Section 2.6.


                                       8
<PAGE>

      2.7   Access to and Maintenance of Auction Records.
            --------------------------------------------

      The Trust Company, upon the  written  request of the Company, shall afford
to the Company and its agents, independent public  accountants and legal counsel
access at reasonable times during normal business hours  to  all books, records,
documents and other information concerning the conduct and results  of Auctions.
For  purposes  of  the  preceding sentence, the parties hereto acknowledge  that
Broker-Dealers shall not  be  deemed  agents  of  the Company. The Trust Company
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  a
longer period not in excess of six years, then for such longer period), and such
records  shall,  in reasonable detail, accurately and fairly reflect the actions
taken by the Trust Company hereunder.

3.    The Trust Company as Paying Agent.
      ---------------------------------

      3.1   Company to Provide for Dividends and Redemptions.
            ------------------------------------------------

                  (a)    Not   later   than  12:00  noon  on  the  Business  Day
      immediately preceding each Dividend  Payment  Date  with  respect to which
      dividends  (or  Additional  Dividends with respect to the Fiscal  Year-End
      Dividend Period) on the shares  of  the  DARTS  have  been  declared,  the
      Company  shall  deposit  or  cause  to be deposited with the Trust Company
      sufficient funds (available on such Dividend  Payment  Date  in  New  York
      City) for the payment of such dividends or Additional Dividends; provided,
      however,  that  the Company shall not be required to make any deposit with
      the Trust company in respect of Additional Dividends other than Additional
      Dividends payable with respect to the Fiscal Year-End Dividend Period. The
      Company shall give  the  Trust  Company  irrevocable instructions to apply
      such funds deposited with the Trust Company and, if applicable, the income
      and proceeds therefrom, to the payment of  such  dividends  or  Additional
      Dividends on such Dividend Payment Date. The Company may direct the  Trust
      Company   to  invest  any  available  funds  in  Short-Term  Money  Market
      Instruments;  provided  that  the proceeds of any such investments will be
      available in New York City at the  opening  of  business  on such Dividend
      Payment Date.

                  (b)    If the Company shall give a Notice of Redemption, then,
      not  later  than 12:00 noon of the Business Day immediately preceding  the
      date fixed for  redemption,  the  Company  shall  deposit  with  the Trust
      Company  sufficient  funds (available on such redemption date in New  York
      City) to redeem the shares  of  DARTS called for redemption in such Notice
      of Redemption and shall give the Trust Company irrevocable instructions to
      apply such funds and, if applicable, the income and proceeds therefrom, to
      the payment of the redemption price  for  such  shares  of  the DARTS upon
      surrender  of  the  certificate or certificates therefor. The Company  may
      direct the Trust Company to invest any available funds in Short-Term Money
      Market Instruments; provided  that  the  proceeds  of any such investments
      will  be  available  in New York City at the opening of  business  on  the
      redemption date.

                  (c)    The  Trust  Company  shall not be liable or responsible
      for  any  loss,  in  whole  or in part, incurred  or  resulting  from  any
      investments made pursuant to  paragraph  (a)  or  (b) of this Section 3.1,

                                       9
<PAGE>

      such investments being solely for the account of and  at  the  risk of the
      Company.  The  Trust  Company shall also not be liable to the extent  that
      investments made by the  Trust  Company  at  the  direction of the Company
      pursuant to clause (a) or (b) of this Section 3.1 do not constitute Short-
      Term Money Market Instruments.

                  (d)    If pursuant to paragraph (a) or (b) of this Section 3.1
      the Company directs the Trust Company to invest in Short-Term Money Market
      Instruments  and  the Trust Company receives income on  such  investments,
      then the Trust Company  shall  (to  the  extent  that  such  income is not
      required to pay dividends, Additional Dividends or the redemption price of
      shares  to  be  redeemed,  as  the  case may be), upon the request of  the
      Company, transmit such income to the Company.

      3.2   Disbursing Dividend and Redemption Price.
            ----------------------------------------

      Subject to receipt of the requisite funds  and instructions by the Company
as provided in Section 3.1 hereof, the Trust Company shall pay to the Holders of
shares of each series of the DARTS (i) on each Dividend  Payment  Date  for such
series of the DARTS, dividends and, if applicable, Additional Dividends (to  the
extent  that  the  company  has  deposited  with  the Trust Company, pursuant to
Section 3.1(a) hereof, funds for the payment thereof)  on  such  series  of  the
shares of the DARTS, and (ii) on any date fixed for redemption of shares of such
series  of  the DARTS, the redemption price for any shares of such series of the
DARTS called  for  redemption upon presentation and surrender of the certificate
or certificates evidencing  shares  of  such  series  of  the DARTS held by such
Holders  and  called for redemption. The amount of dividends  for  any  Dividend
Period or portion thereof to be paid by the Trust Company to the Holders will be
determined by the  Company'  as set forth in Section 6.4(c) of Article VI of the
By-Laws.

      The  amount  of Additional  Dividends  payable  for  any  Fiscal  Year-End
Dividend Period for  any  taxable  year  to  be paid by the Trust Company to the
Holders will be determined by the Company as set  forth in Sections 6.4(d) (iii)
and (iv) of Article VI of the By-Laws. The redemption  price  to  be paid by the
Trust Company to the Holders will be determined by the Company as set  forth  in
Sections  6.6(a)  and  6.6(b)  of  Article  VI of the By-Laws. The Company shall
deliver  to  the  Trust  Company any Notice of Redemption  required  by  Section
6.6(c)(ii) of Article VI of the By-Laws when mailed to the Holders of the shares
to be redeemed. Such notice  shall  contain  the  information  required  by such
Section  6.6(c) (ii) to be stated in the Notice of Redemption. The Trust Company
shall have  no duty to determine the redemption price and may rely on the amount
thereof set forth in such notice.

      3.3   Certificates of Eligible Asset Coverage and Dividend Coverage
            -------------------------------------------------------------

                  (a)    (i)  The  Company  shall,  no  later  than the close of
      business  on the second Business Day immediately following  each  Eligible
      Asset Evaluation  Date,  deliver  to  the  Trust Company a fully completed
      Certificate  of  Eligible Asset Coverage, substantially  in  the  form  of
      Exhibit F hereto (a "Certificate of Eligible Asset Coverage"), dated as of
      such Eligible Asset Evaluation Date.

                  (ii)   The  Company shall, no later than the close of business
on  the  second  Business  Day  immediately  following  each  Dividend  Coverage

                                       10
<PAGE>

Evaluation Date, deliver to the Trust  Company  a fully completed Certificate of
Dividend Coverage, substantially in the form of Exhibit G hereto (a "Certificate
of Dividend Coverage"), dated as of such Dividend Coverage Evaluation Date.

                  (b)    If Item 9 of the Certificate of Eligible Asset Coverage
      indicates that the Eligible Asset Coverage  was not met as of any Eligible
      Asset Evaluation Date, or if the Certificate of Eligible Asset Coverage is
      not delivered when required, then the Company,  no later than the close of
      business on the second Business Day following the Eligible Asset Cure Date
      related to such Eligible Asset Evaluation Date, shall deliver to the Trust
      Company  a  Certificate  of  Eligible Asset Coverage,  dated  as  of  such
      Eligible Asset Cure Date, indicating  that the Eligible Asset Coverage was
      met as of such Eligible Asset Cure Date.

                  (c)    If  Item 2.F of the Certificate  of  Dividend  coverage
      indicates that the Dividend  Coverage  was  not  met  as  of  any Dividend
      Coverage  Evaluation  Date, or if the Certificate of Dividend Coverage  is
      not delivered when required,  then the Company, no later than the close of
      business on the second Business  Day  following the Dividend Coverage Cure
      Date with respect to such Dividend Coverage Evaluation Date, shall deliver
      to the Trust Company a Certificate of Dividend  Coverage, dated as of such
      Dividend Coverage Cure Date, indicating that the  Dividend Coverage is met
      as of such Dividend Coverage Cure Date.

      3.4   Accountants' Certificates.
            -------------------------

                  (a)    With  respect  to  the Certificate  of  Eligible  Asset
      Coverage relating to the Eligible Asset  Evaluation  Date  on  the Date of
      original  Issue  and,  thereafter,  with  respect  to  the Certificate  of
      Eligible  Asset  Coverage relating to every succeeding seventh  Evaluation
      Date (or, if the Eligible  Asset  Coverage  is  not  met  as  of  any such
      Eligible  Asset Evaluation Date, the Eligible Asset Cure Date with respect
      to any such  Eligible  Asset Evaluation Date), the Company shall cause the
      Independent  Accountants   to   deliver   an   Accountants'   Certificate,
      substantially  in  the  form of Exhibit H hereto, to the Trust Company  no
      later than the close of business  on the sixth Business Day following each
      such  Eligible  Asset  Evaluation Date  (such  sixth  Business  Day  being
      referred to herein as the "Confirmation Date").

                  (b)    With  respect  to  the Certificate of Dividend Coverage
      relating to any Dividend Coverage Cure  Date,  the Company shall cause the
      Independent   Accountants   to   deliver   an  Accountants'   Certificate,
      substantially in the form of Exhibit I hereto,  to  the  Trust  Company no
      later than the close of business on the second Business Day following such
      Dividend Coverage Cure Date.

                  (c)    With  respect  to  the  Certificate  of  1940 Act Asset
      Coverage relating to any 1940 Act Cure Date, the Company shall  cause  the
      Independent   Accountants   to   deliver   an   Accountants'  Certificate,
      substantially in the form of Exhibit J hereto, to  the  Trust  Company  no
      later than the close of business on such 1940 Act Cure Date.


                                       11
<PAGE>

                  (d)    If  an Accountants' Certificate is not delivered to the
      Trust Company by the close of business on any Confirmation Date confirming
      that the Eligible Asset  Coverage was met as of the related Eligible Asset
      Evaluation Date or Eligible  Asset Cure Date, as the case may be, then the
      Company, no later than the close  of  business  on the fourth Business Day
      following such Confirmation Date, shall deliver to  the  Trust  Company  a
      Certificate  of  Eligible  Asset Coverage, dated as of the second Business
      Day following such Confirmation  Date,  indicating that the Eligible Asset
      Coverage was met as of such second Business  Day,  together  with,  if  so
      required  by the Amended and Restated By-Laws, an Accountants' Certificate
      confirming such Certificate of Eligible Asset Cure Asset Coverage.

      3.5   Notice of Special Meeting of Holders of the DARTS of the Company.
            ----------------------------------------------------------------

                  (a)    If  an  event described in Section 6.7 of Article VI of
      the By-Laws occurs, then the  Trust  Company  shall, upon receipt from the
      Company of a notice of a special meeting of the  holders  of shares of the
      DARTS (a "Special Meeting") in substantially the form set forth in Exhibit
      K hereto with appropriate insertions (the "Notice"), mail such  notice  to
      all Holders of shares of the DARTS who were Holders of record at the close
      of business on the fifth Business Day preceding the date of mailing of the
      Notice  (the  "Record  Date").  The  Trust Company shall insert the Record
      Date, the date of the Special Meeting and the time of day of such meeting,
      as specified by the Company, in the Notice.

                  (b)    If  at any time after  the  Trust  Company  shall  have
      mailed the Notice but before the Special Meeting shall have been held, all
      accumulated and unpaid dividends  (including Additional Dividends, if any)
      on all then-outstanding shares of the  Series  A  DARTS  and  the Series B
      DARTS  including  the  accumulated  and  unpaid  dividends for the current
      Dividend Period for the DARTS, of either series, shall  have  been paid or
      declared and a sum sufficient for the payment of such dividends  deposited
      with  the  Trust  Company, the Trust Company shall, upon receipt from  the
      Company  of  a  notice   of   cancellation  of  such  Special  Meeting  in
      substantially the form set forth  in Exhibit L hereto, mail such notice as
      soon as practicable to all Holders of shares of the DARTS who were Holders
      of record at the close of business on the fifth Business Day preceding the
      date the Notice was mailed.

                  (c)    The Company shall  provide a temporary chairman for any
      Special Meeting. The Trust Company shall have no obligations in connection
      with  such meeting, except with respect  to  the  mailing  of  the  Notice
      pursuant to this Agreement.

      3.6   Dividends on Common Stock; Notice to Holders.
            --------------------------------------------

      So long  as any shares of the DARTS are outstanding, the Company shall not
declare, pay or  set  apart  for  payment  any dividend or other distribution in
respect of the Common Stock or any other stock  of the Company ranking junior to
the  shares  of  the  DARTS  as to dividends or upon liquidation,  or  call  for
redemption, redeem, purchase or  otherwise  acquire for consideration any shares
of the Common Stock or any other stock of the  Company  ranking  junior  to  the
shares  of  the DARTS as to dividends or upon liquidation, unless, in each case,

                                       12
<PAGE>

the Company has  prior  to  such  transaction  provided the Trust Company with a
certificate, substantially in the form of Exhibit M hereto.

4.    The Trust Company as Transfer Agent and Registrar.
      -------------------------------------------------

      4.1   Original Issue of Stock Certificates.
            ------------------------------------

      With respect to each series of the DARTS,  on  the Date of Original Issue,
one certificate representing all of the shares of the  Series  A  DARTS  and one
certificate representing all of the shares of the Series B DARTS shall be issued
by  the  Company  and, at the request of the Company, registered in the name  of
Cede & Co. and countersigned by the Trust Company.

      4.2   Registration of Transfer or Exchange of Shares.
            ----------------------------------------------

      Except as otherwise  provided  in  this  Section  4.2, shares of the DARTS
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 Trust Company prior to such resignation,
then  upon such resignation, the shares of each series of  the  DARTS  shall  be
registered  for  transfer  or exchange, and new certificates shall be issued, in
the name or names of the designated transferee or transferees, upon surrender of
the old certificates in form  deemed  by the Trust Company properly endorsed for
transfer with all necessary endorsers' signatures guaranteed, in such manner and
form as the Trust Company may require, by a guarantor reasonably believed by the
Trust Company to be responsible, accompanied  by  such  assurances  as the Trust
Company  shall  deem  necessary  or appropriate to evidence the genuineness  and
effectiveness  of  each  necessary  endorsement  and  satisfactory  evidence  of
compliance with all applicable laws relating to the collection of taxes or funds
necessary for the payment of such taxes.

      4.3   Removal of Legend.
            -----------------

      All requests for removal of legends on certificates representing shares of
the DARTS indicating restrictions on transfer shall be accompanied by an opinion
of counsel stating that such legends  may  be removed and the shares represented
by such certificate may be freely transferred.  Such  opinion shall be delivered
under cover of a letter from a Company Officer authorizing  the Trust Company to
remove the legend on the basis of said opinion.

      4.4   Lost Stock Certificates.
            -----------------------

      The  Trust company 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 the Trust Company, subject at all times to provisions of law, the By-Laws of
the  Company  governing  such  matters  and resolutions adopted by the Board  of
Directors of the Company with respect to  such  matters.  The  Trust Company may
issue  new certificates in exchange for and upon the cancellation  of  mutilated
certificates.  Any  request  by  the  Company  to  the  Trust Company 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 Trust Company  that  such
issuance will comply with such provisions of law and By-Laws and resolutions  of
the Board of Directors of the Company.


                                       13
<PAGE>

      4.5   Disposition of Cancelled Certificates; Record Retention.
            -------------------------------------------------------

      In  accordance with applicable rules and regulations of the Securities and
Exchange Commission,  the  Trust  Company  shall retain stock certificates which
have  been  cancelled  in  transfer  or  in  exchange   and   the   accompanying
documentation  for  two  calendar  years.  Upon  the  expiration of the two-year
period,  the  Trust  Company  shall  deliver  to  the  Company   such  cancelled
certificates  and  the  accompanying  documentation. The Company shall,  at  its
expense, 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 and  the  Board  of  Governors of the Federal
Reserve System. The Company shall also 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  Company  without
concurrence of the Trust Company but shall be safely stored  for possible future
reference.

      4.6   Stock Books.
            -----------

      For  so long as the Trust Company is acting as transfer agent  for  either
series of the  DARTS,  the  Trust Company shall maintain the Stock Books listing
the Holders of the shares of  the  Series  A  DARTS  and the Series B DARTS, the
number of shares of Series A DARTS and the Series B DARTS  held  by  each Holder
and  the  address  of  each  Holder.  In  case  of any request or demand for the
inspection  of  the  Stock  Books  of  the Company or any  other  books  in  the
possession of the Trust Company, the Trust  Company shall notify the Company and
secure  instructions as to permitting or refusing  such  inspection.  The  Trust
Company reserves  the  right, however, to exhibit the Stock Books or other books
to any Person if it is advised by its counsel that its failure to do so would be
unlawful.

      4.7   List of Holders.
            ---------------

      If the Company is  obligated to pay Additional Dividends in respect of any
dividends paid to the Holders,  other  than  Additional  Dividends  payable with
respect to the Fiscal Year-End Dividend Period, the Trust Company shall,  within
10  days  of  its  receipt  from  the  Company  of a notice of its intent to pay
Additional Dividends in substantially the form set  forth  in  Exhibit  N hereto
with  appropriate  insertions  and  signed  by  the Chairman of the Board or the
President  and the principal financial or accounting  officer  of  the  Company,
furnish the  Company  with  a list of the Existing Holders as of the record date
for the corresponding Dividend  Payment  Date for each Dividend Period specified
in such certificate.

      4.8   Return of Funds.
            ---------------

      Any funds deposited with the Trust Company  hereunder  .by the Company for
any reason, including but not limited to redemption of shares of the DARTS, that
remain  unpaid  after  two  years  shall  be repaid to the Company upon  written
request of the Company.

5.    Representations and Warranties of the Company.
      ---------------------------------------------


                                       14
<PAGE>

      The Company represents and warrants to the Trust Company that:

                  (a)    the Company has been  duly  organized  and  is  validly
      existing as a business trust in good standing under the laws of the  State
      of  Massachusetts and has full power to execute and deliver this Agreement
      and to authorize, create and issue the shares of the DARTS, and the shares
      of the  DARTS have been duly authorized, validly issued and are fully paid
      and non-assessable;

                  (b)    this  Agreement  has  been duly and validly authorized,
      executed  and delivered by the Company and,  assuming  due  authorization,
      execution and delivery by the Trust Company, constitutes the legal, valid,
      binding  and  enforceable  obligation  of  the  Company,  subject,  as  to
      enforceability,  to  bankruptcy, insolvency, reorganization and other laws
      of general applicability  relating to or affecting creditors rights and to
      general equitable principles;

                  (c)    the form  of  the certificates evidencing the shares of
      the Series A DARTS and the Series  B  DARTS  complies  with all applicable
      laws of the State of Massachusetts;

                  (d)    the shares of the DARTS have been duly registered under
      the  Securities Act of 1933, as amended, and no 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 the issuance of the shares of the DARTS, except  as  required
      by applicable state securities laws;

                  (e)    the  execution  and  delivery  of  this  Agreement, the
      performance  by the Company of its obligations hereunder and the  issuance
      and delivery of the shares of the DARTS do not and will not conflict with,
      violate, or result in a breach of, the terms, conditions or provisions of,
      or constitute  a default under, the Declaration of Trust or the By-Laws of
      the Company, any  law  or  regulation, any order or decree of any court or
      public  authority  having  jurisdiction,   or   any  mortgage,  indenture,
      contract, agreement or undertaking to which the Company  is  a party or by
      which it is bound; and

                  (f)    no  taxes  are  payable  upon  or  in  respect  of  the
      execution of this Agreement or the issuance of the shares of the DARTS.

6.    The Trust Company.
      ----------------

      6.1   Duties and Responsibilities.
            ---------------------------

                  (a)    The  Trust  Company  is  acting  solely as agent of the
      Company hereunder and owes no fiduciary duty to any other Person by reason
      of this Agreement.

                  (b)    The Trust Company undertakes to perform such duties and
      only such duties as are specifically set forth in his  Agreement,  and  no
      implied  covenants  or  obligations  shall   be  read  into this Agreement
      against the Trust Company.


                                       15
<PAGE>

                  (c)    The Trust Company shall have no duty  or responsibility
      to  verify or determine the accuracy of any document delivered  to  it  in
      accordance  with the terms hereunder. The Trust Company shall have no duty
      or responsibility to enforce the obligations of the Company to provide the
      Trust Company with any notice or document.

                  (d)    In  the absence of bad faith or negligence on its part,
      the Trust Company 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. The Trust Company shall not be liable for any
      error of judgment made in good faith unless  the  Trust Company shall have
      been negligent in ascertaining the pertinent facts.

      6.2   Rights of the Trust Company.
            ---------------------------

                  (a)    The Trust Company 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 Trust Company shall not be
      liable for acting upon any telephone communication authorized hereby which
      the Trust Company believes in good faith to have been given by the Company
      or by a Broker-Dealer. The Trust Company  may  record by tape or otherwise
      telephone communications with the Company or any  of the Broker-Dealers or
      both.

                  (b)    The  Trust Company may consult with  counsel,  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 Trust Company 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 Trust  Company  may perform its duties and exercise
      its rights hereunder either directly or by or through agents or attorneys.

      6.3   Trust Company's Disclaimer.
            --------------------------

      The Trust Company makes no representation  as  to  the  correctness of the
recitals  in  or  the validity or adequacy of this Agreement, the  Broker-Dealer
Agreements or the shares of the DARTS.

      6.4   Compensation Expenses and Indemnification.
            -----------------------------------------

                  (a)    The  Company  shall  pay the Trust Company from time to
      time reasonable compensation for all services rendered by it hereunder and
      under the Broker-Dealer Agreements.

                  (b)    The Company shall reimburse  the Trust Company upon its
      request  for  all  reasonable  out-of-pocket expenses,  disbursements  and
      advances incurred or made by the  Trust  Company  in  accordance  with any


                                       16
<PAGE>

      provision hereof or 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
      negligence or bad faith.

                  (c)    The  Company shall indemnify the Trust Company against,
      and  hold it harmless from,  any  loss,  liability  or  expense,  incurred
      without  negligence  or  bad  faith  on  its  part,  arising  out of or in
      connection   with   its   agency  hereunder  or  under  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
      any of its duties hereunder and thereunder for which  it  is  entitled  to
      indemnification hereunder or thereunder.

7.    Miscellaneous.
      -------------

      7.1   Term of Agreement.
            -----------------

                  (a)    The  term of this Agreement shall continue indefinitely
      until this Agreement shall  be terminated as provided in this Section 7.1.
      The Company may terminate this  Agreement  at any time by so notifying the
      Trust Company; provided that the Company has  entered into an agreement in
      substantially the form of this Agreement with a successor Trust Company or
      no shares of the DARTS remain outstanding. The Trust Company may terminate
      this Agreement upon notice to the Company on the  date  specified  in such
      notice which date shall be no earlier than the 98th day after the delivery
      of such notice.

                  (b)    Except as otherwise provided in this paragraph (b), the
      respective  rights  and  duties of the Company and the Trust Company under
      this  Agreement  shall cease  upon  termination  of  this  Agreement.  The
      Company's representations,  warranties,  covenants  and obligations to the
      Trust  Company  under  Sections  5  and  6.4  hereof  shall  survive   the
      termination  hereof. Upon termination of this Agreement, the duties of the
      Trust Company  under  each of the Broker-Dealer Agreements shall cease and
      at the Company's request,  the Trust Company shall promptly deliver to the
      Company copies of all books  and  records  maintained  by it in connection
      with its duties hereunder.

      7.2   Communications.
            --------------

      Except for (i) communications authorized to be made by telephone  pursuant
to  this  Agreement  or  the  Auction  Procedures  and  (ii)  communications  in
connection with Auctions (other than those expressly required to be in writing),
all  notices,  requests and other communications to any party hereunder shall be
in writing (including  telecopy  or  similar writing) and shall be given to such
person addressed to it, at its address or telecopier number set forth below:



 If to the Company,                   Patriot Premium Dividend
  addressed:                             Fund II
                                      211 Congress Street
                                      Boston, Massachusetts  02110

                                       17
<PAGE>

                                      Attention:  Mary Lomasney
                                      Telecopier No.: 617-426-6230
                                      Telephone No.: 617-426-3310

If to the Trust                       Manufacturers Hanover Trust
  Company, addressed:                    Company
                                      Corporate Trust Department
                                      40 Wall Street
                                      20th Floor
                                      New York, New York 10015
                                      Attention: Corporate Trust
                                      Department

                                      Telecopier No.: 212-742-1790
                                      Telephone No.:  212-623-5601



                                       18
<PAGE>


with a copy, except                   Manufacturers Hanover Trust
  communications in                      Company
  connection with                     450 West 33rd Street, 15th Floor
  Auctions, to:                       New York, New York 10020
                                      Attention: Agency
                                        Administration

                                      Telecopier No.: 212-765-2549

                                      Telephone No.:  212-957-1740

or to such other address, telephone or telecopier number as such party may
hereafter 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 Trust Company 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 Trust Company.

      7.4   Benefits.
            --------

      Nothing herein, express or implied, shall give to any  Person,  other than
the Company, the Trust Company 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 the parties hereto.  The  Company
      shall  notify  the Trust Company of any change in the Declaration of Trust
      or the By-Laws prior  to  the effective date of any such change; provided,
      however, that any change in  the By-Laws that would have a material effect
      on  the  Trust Company's duties  under  the  Auction  Procedures  must  be
      approved by  the  Trust  Company, which approval shall not be unreasonably
      withheld.

                  (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 assigns of each of the Company and
the Trust Company.


                                       19
<PAGE>

      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.

      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.

                               PATRIOT PREMIUM.DIVIDEND FUND II




                               By: /s/ Walter M. Cabot, Jr.
                                   _________________________________________
                                   Name: Walter M. Cabot, Jr.
                                   Title: President


                               MANUFACTURERS HANOVER TRUST COMPANY


                               By:  _________________________________________
                                     Name
                                     Title:




                                       20

</TEXT>
</DOCUMENT>
