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EXHIBIT (k)(2)
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AUCTION AGENT AGREEMENT
between
MUNIHOLDINGS CALIFORNIA INSURED FUND V, INC.
and
IBJ WHITEHALL BANK & TRUST COMPANY
Dated as of ___________ ___ , 1999
Relating to
AUCTION MARKET PREFERRED STOCK(R)
("AMPS"(R)),
Series A and B
of
MUNIHOLDINGS CALIFORNIA INSURED FUND V, INC.
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(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
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THIS AUCTION AGENT AGREEMENT, dated as of __________ __, 1999, is between
MUNIHOLDINGS CALIFORNIA INSURED FUND V, INC., a Maryland corporation (the
"Company"), and IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking
corporation.
The Company proposes to duly authorize and issue ________ shares of
Auction Market Preferred Stock(R), Series A ("Series A AMPS"), and _______
shares of Auction Market Preferred Stock(R), Series B ("Series B AMPS"), each
with a par value of $.10 per share and a liquidation preference of $25,000 per
share plus an amount equal to accumulated but unpaid dividends (whether or not
earned or declared), pursuant to the Company's Articles Supplementary (as
defined below). The Series A AMPS and Series B AMPS are sometimes herein
referred to together as the "AMPS." A separate Auction (as defined below) will
be conducted for each series of AMPS. The Company desires that IBJ Whitehall
Bank & Trust Company perform certain duties as agent in connection with each
Auction of shares of AMPS (in such capacity, the "Auction Agent"), and as the
transfer agent, registrar, dividend disbursing agent and redemption agent with
respect to the shares of AMPS (in such capacity, the "Paying Agent"), upon the
terms and conditions of this Agreement, and the Company hereby appoints IBJ
Whitehall Bank & Trust Company as said Auction Agent and Paying Agent in
accordance with those terms and conditions (hereinafter generally referred to as
the "Auction Agent," except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1. Terms Defined by Reference to
Articles Supplementary.
Capitalized terms not defined herein shall have the respective
meanings specified in the Articles Supplementary.
(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
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1.2. Terms Defined Herein.
As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person, other xxxx Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, made known to the
Auction Agent to be controlled by, in control of, or under
common control with, the Company or its successors.
(b) "Agent Member" of any Person shall mean such Person's
agent member of the Securities Depository that will act on
behalf of a Bidder.
(c) "Articles Supplementary" shall mean the Articles
Supplementary of the Company, establishing the powers,
preferences and rights of the AMPS, filed on _____________,
1999 with the State Department of Assessments and Taxation of
the State of Maryland.
(d) Auction" shall have the meaning specified in Section
2.1 hereof.
(e) "Auction Procedures" shall mean the Auction
Procedures that are set forth in Paragraph 10 of the Articles
Supplementary.
(f) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Trust
Officer, and Assistant Secretary and Assistant Treasurer of
the Auction Agent assigned to its Corporate Trust and Agency
Group and every other officer or employee of the Auction
Agent designated as an "Authorized Officer" for purposes
hereof in a communication to the Company.
(g) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a Broker-Dealer substantially
in the form attached hereto as Exhibit A.
(h) "Company Officer" shall mean the Chairman and Chief
Executive Officer, the President, each Vice President
(whether or not designated by a number or word or words added
before or after the title "Vice President"), the Secretary,
the Treasurer, each Assistant Secretary and each Assistant
Treasurer of the Company and every other officer or employee
of the Company designated as a "Company Officer" for purposes
hereof in a notice from the Company to the Auction Agent.
(i) "Holder" shall be a holder of record of one or more
shares of AMPS, listed as such in the stock register
maintained by the Paying Agent pursuant to Section 4.6
hereof.
(j) "Settlement Procedures" shall mean the Settlement
Procedures attached as Exhibit A to the Broker-Dealer
Agreement.
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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.
II. THE AUCTION.
2.1. Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures.
(a) The Articles Supplementary provide that the
Applicable Rate on shares of each series of AMPS, as the case
may be, for each Dividend Period therefor after the Initial
Dividend Period shall be the rate per annum that a commercial
bank, trust company or other financial institution appointed
by the Company advises results from implementation of the
Auction Procedures. The Board of Directors of the Company
has adopted a resolution appointing IBJ Whitehall Bank &
Trust Company as Auction Agent for purposes of the Auction
Procedures. The Auction Agent hereby accepts such
appointment and agrees that, on each Auction Date, it shall
follow the procedures set forth in this Section 2 and the
Auction Procedures for the purpose of determining the
Applicable Rate for the AMPS for the next Dividend Period
therefor. Each periodic operation of such procedures is
hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction
Procedures and in the Settlement Procedures are incorporated
herein by reference in their entirety and shall be deemed to
be a part hereof to the same extent as if such provisions
were set forth fully herein.
2.2. Preparation for Each Auction; Maintenance
of Registry of Existing Holders.
(a) Pursuant to Section 2.5 hereof, the Company shall not
designate any Person to act as a Broker-Dealer without the
prior written approval of the Auction Agent (which approval
shall not be withheld unreasonably). As of the date hereof,
the Company shall provide the Auction Agent with a list of
the Broker-
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Dealers previously approved by the Auction Agent 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 purchasing shares of AMPS. Not later than five
Business Days prior to any Auction Date for which any change
in such list of Broker-Dealers is to be effective, the
Company shall notify the Auction Agent in writing of such
change and, if any such change is the addition of a
Broker-Dealer to such list, the Company shall cause to be
delivered to the Auction Agent for execution by the Auction
Agent a Broker-Dealer Agreement signed by such Broker-Dealer.
The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation
of any such Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction
shall be changed after the Auction Agent shall have given the
notice referred to in clause (vii) of Paragraph (a) of the
Settlement Procedures, the Auction Agent, by such means as
the Auction Agent deems practicable, shall give notice of
such change to the Broker-Dealers not later than the earlier
of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the old
Auction Date.
(c) The provisions contained in paragraph 2 of the
Articles Supplementary concerning Special Dividend Periods
and the notification of a Special Dividend Period will be
followed by the Company and, to the extent applicable, the
Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall
be deemed to be a part of this Agreement to the same extent
as if such provisions were set forth fully herein.
(d) Except as otherwise provided in paragraph 2(f) of the
Articles Supplementary, whenever the Company intends to
include any net capital gains or other income subject to
regular Federal income tax in any dividend on shares of AMPS,
the Company will notify the Auction Agent of the amount to be
so included at least five Business Days prior to the Auction
Date on which the Applicable Rate for such dividend is to be
established. Whenever the Auction Agent receives such notice
from the Company, in turn it will notify each Broker-Dealer,
who, on or prior to such Auction Date, in accordance with its
Broker-Dealer Agreement, will notify its Beneficial Owners
and Potential Beneficial Owners believed to be interested in
submitting an Order in the Auction to be held on such Auction
Date. Whenever the Company includes any additional amounts in
a dividend as provided in paragraph 2(f) of the Articles
Supplementary, the Company will notify the Auction Agent of
such additional amounts to be so included in such dividend at
least five Business Days prior to the applicable Dividend
Payment Date. Whenever the Auction Agent receives such notice
from the Company, in turn it will notify the Securities
Depository and each Broker-
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Dealer, who, on or prior to the applicable Dividend Payment
Date, in accordance with its Broker-Dealer Agreement, will
notify its Beneficial Owners.
(i) If the Company makes a Retroactive Taxable Allocation,
the Company, within 90 days (and generally within 60 days)
after the end of its fiscal year for which a Retroactive
Taxable Allocation is made, will provide notice thereof to
the Auction Agent and to each Holder (initially the
Securities Depository) during such fiscal year at such
Holder's address as the same appears or last appeared on the
stock books of the Company. The Company, within 30 days after
such notice is given to the Auction Agent, will pay to the
Auction Agent (who then will distribute to such Holders), out
of funds legally available therefor, a cash amount equal to
the aggregate Additional Dividend with respect to all
Retroactive Taxable Allocations made to such Holders during
the fiscal year in question.
(e) On each Auction Date, the Auction Agent shall
determine the Reference Rate and the Maximum Applicable Rate.
If the Reference Rate 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, as set
forth in paragraph 1 of the Articles Supplementary; 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 Company as to the method of such conversion. Not later
than 9:30 A.M. on each Auction Date, the Auction Agent shall
notify the Company and the Broker-Dealers of the Reference
Rate so determined and of the Maximum Applicable Rate.
(i) If the Reference Rate is the applicable "AA" Composite
Commercial Paper Rate and such 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" Composite Commercial
Paper Rate, the Auction Agent immediately shall 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 supplied by any Commercial Paper Dealer or Commercial
Paper Dealers. The Company promptly shall advise the Auction
Agent of any such selection. If the Company 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.
(ii) If, after the date of this Agreement, there is any
change in the prevailing rating of AMPS by either of the
rating agencies (or substitute or successor rating agencies)
referred to in the definition of the Maximum Applicable Rate,
thereby resulting in any change in the corresponding
applicable percentage for the AMPS, as set forth in said
definition (the "Percentage"), the Company shall notify the
Auction Agent in writing of such change in the Percentage
prior to 9:00 A.M. on the Auction Date for AMPS next
succeeding such change. The Percentage for the AMPS on the
date of this Agreement is as specified in paragraph
10(a)(vii) of the Articles Supplementary. The Auction Agent
shall be entitled to rely on the last
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Percentage of which it has received notice from the Company
(or, in the absence of such notice, the Percentage set forth
in the preceding sentence) in determining the Maximum
Applicable Rate as set forth in Section 2.2(e)(i) hereof.
(f) The Auction Agent shall maintain a current registry
of the Existing Holders of the shares of each series of AMPS
for purposes of each Auction. The Company shall use its best
efforts to provide or cause to be provided to the Auction
Agent within ten Business Days following the date of the
Closing a list of the initial Existing Holders of each series
of AMPS, 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 shares of AMPS to another Person.
(i) In the event of any partial redemption of any series of
AMPS, upon notice by the Company to the Auction Agent of such
partial redemption, the Auction Agent promptly shall request
the Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers
of shares) from the accounts of which shares have been called
for redemption and the person or department at such Agent
Member to contact regarding such redemption, and at least two
Business Days prior to the Auction preceding the date of
redemption with respect to shares of the series being
partially redeemed, the Auction Agent shall request each
Agent Member so identified to disclose to the Auction Agent
(upon selection by such Agent Member of the Existing Holders
whose shares are to be redeemed) the number of shares of such
series of AMPS of each such Existing Holder, if any, to be
redeemed by the Company, provided that the Auction Agent has
been furnished with the name and telephone number of a person
or department at such Agent Member from which it is to
request such information. In the absence of receiving any
such information with respect to an Existing Holder, from
such Existing Holder's Agent Member or otherwise, the Auction
Agent may continue to treat such Existing Holder as having
ownership of the number of shares of the series of AMPS shown
in the Auction Agent's registry of Existing Holders.
(ii) The Auction Agent shall register a transfer of the
ownership of shares of a series of AMPS from an Existing
Holder to another Existing Holder, or to another Person if
permitted by the Company, only if (A) such transfer is made
pursuant to an Auction or (B) if such transfer is made other
than pursuant to an Auction, the Auction Agent has been
notified of such transfer in writing in a notice
substantially in the form of Exhibit C to the Broker-Dealer
Agreements, by such Existing Holder or by the Agent Member of
such Existing Holder. The Auction Agent is not required to
accept any notice of transfer delivered for an Auction unless
it is received by the Auction Agent by 3:00 P.M. on the
Business Day next preceding the applicable Auction Date. The
Auction Agent shall rescind a transfer made on the registry
of the Existing Holders of any shares of AMPS if the
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Auction Agent has been notified in writing, in a notice
substantially in the form of Exhibit D to the Broker-Dealer
Agreement, by the Agent Member or the Broker-Dealer of any
Person that (i) purchased any shares of AMPS and the seller
failed to deliver such shares or (ii) sold any shares of AMPS
and the purchaser failed to make payment to such Person upon
delivery to the purchaser of such shares.
(g) The Auction Agent may request that the
Broker-Dealers, as set forth in Section 3.2(c) of the
Broker-Dealer Agreements, provide the Auction Agent with a
list of their respective customers that such Broker-Dealers
believe are Beneficial Owners of shares of AMPS. The Auction
Agent shall keep confidential any such information and shall
not disclose any such information so provided to any Person
other than the relevant Broker-Dealer and the Company,
provided 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 in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent
with the consent of the Company, which consent shall not be withheld
unreasonably. The Auction Agent shall give notice of any such change to each
Broker-Dealer. Such notice shall be received prior to the first Auction Date on
which any such change shall be effective.
Time Event
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By 9:30 A.M. Auction Agent advises the
Company and the Broker-Dealers of
the Reference Rate and the Maximum
Applicable Rate as set forth in
Section 2.2(e)(i) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by
Broker-Dealers as provided in
Paragraph 10(c)(i) of the Articles
Supplementary. Submission deadline
is 1:00 P.M.
Not earlier than Auction Agent makes determinations
1:00 P.M. pursuant to Paragraph 10(d)(i) of
the Articles Supplementary.
By approximately Auction Agent advises the Company
3:00 P.M. of the results of the Auction as provided in
Paragraph 10(d)(ii) of the Articles
Supplementary.
Submitted Bids and Submitted Sell
Orders are accepted and rejected in
whole or in part and shares of AMPS
allocated as provided in Paragraph
10(e) of the Articles Supplementary.
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Auction Agent gives notice of
the Auction results as set
forth in Section 2.4 hereof.
2.4. Notice of Auction Results.
On each Auction Date, the Auction Agent shall notify Broker-Dealers of
the results of the Auction held on such date by telephone or through the
Auction Agent's Auction Processing System as set forth in Paragraph (a) of the
Settlement Procedures.
2.5. Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date, the
Company shall pay to the Auction Agent in Federal Funds or
similar same-day funds an amount in cash equal to (i) in the
case of any Auction Date immediately preceding a 7-Day
Dividend Period or 28-Day Dividend Period, the product of (A)
a fraction the numerator of which is the number of days in
such Dividend Period (calculated by counting the first day of
such Dividend Period but excluding the last day thereof) and
the denominator of which is 360, times (B) 1/4 of 1%, times
(C) $25,000 times (D) the sum of the aggregate number of
Outstanding shares of AMPS for which the Auction is conducted
and (ii) in the case of any Special Dividend Period, the
amount determined by mutual consent of the Company and the
Broker-Dealers pursuant to Section 3.5 of the Broker-Dealer
Agreements. The Auction Agent shall apply such moneys as set
forth in Section 3.5 of the Broker-Dealer Agreements and
shall thereafter remit to the Company any remaining funds
paid to the Auction Agent pursuant to this Section 2.5(a).
(b) The Company shall not designate any Person to act as
a Broker-Dealer, or permit a 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. The Company may designate an Affiliate
or Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated to act
as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Company.
(d) Subject to Section 2.5(b) hereof, the Auction Agent
from time to time shall enter into such Broker-Dealer
Agreements as the Company shall request.
(e) The Auction Agent shall maintain a list of
Broker-Dealers.
2.6. Ownership of Shares of AMPS and Submission of Bids
by the Company and its Affiliates.
Neither the Company nor any Affiliate of the Company may submit any
Sell Order or Bid, directly or indirectly, in any Auction, except that an
Affiliate of the Company that is a Broker-Dealer may submit a Sell Order or Bid
on behalf of a Beneficial Owner or a Potential
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Beneficial Owner. The Company shall notify the Auction Agent if the Company or,
to the best of the Company's knowledge, any Affiliate of the Company becomes a
Beneficial Owner of any shares of AMPS. Any shares of AMPS redeemed, purchased
or otherwise acquired (i) by the Company shall not be reissued, except in
accordance with the requirements of the Securities Act of 1933, as amended, or
(ii) by its Affiliates shall not be transferred (other than to the Company).
The Auction Agent shall have no duty or liability with respect to enforcement
of this Section 2.6.
2.7. Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Company, its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Company's sole
cost and expense) of all books, records, documents and other information
concerning the conduct and results of Auctions, provided that any such agent,
accountant or counsel shall furnish the Auction Agent with a letter from the
Company requesting that the Auction Agent afford such person access. The
Auction Agent shall maintain records relating to any Auction for a period of
two years after such Auction (unless requested by the Company to maintain such
records for such longer period not in excess of four years, then for such
longer period), and such records, in reasonable detail, shall accurately and
fairly reflect the actions taken by the Auction Agent hereunder. The Company
agrees to keep confidential any information regarding the customers of any
Broker-Dealer received from the Auction Agent in connection with this Agreement
or any Auction, and shall not disclose such information or permit the
disclosure of such information without the prior written consent of the
applicable Broker-Dealer to anyone except such agent, accountant or counsel
engaged to audit or review the results of Auctions as permitted by this Section
2.7, provided that the Company reserves the right to disclose any such
information if it is advised by its counsel that its failure to do so would (i)
be unlawful or (ii) expose it to liability, unless the Broker-Dealer shall have
offered indemnification satisfactory to the Company. Any such agent, accountant
or counsel, before having access to such information, shall agree to keep such
information confidential and not to disclose such information or permit
disclosure of such information without the prior written consent of the
applicable Broker-Dealer, provided that such agent, accountant or counsel may
reserve the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel.
III. THE AUCTION AGENT AS PAYING AGENT.
3.1. The Paying Agent.
The Board of Directors of the Company has adopted a resolution
appointing IBJ Whitehall Bank & Trust Company as transfer agent, registrar,
dividend disbursing agent and redemption agent for the Company in connection
with any shares of AMPS (in such capacity, the "Paying Agent"). The Paying
Agent hereby accepts such appointment and agrees to act in accordance with its
standard procedures and the provisions of the Articles Supplementary which are
specified herein with respect to the shares of AMPS and as set forth in this
Section 3.
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3.2. The Company's Notices to the Paying Agent.
Whenever any shares of AMPS are to be redeemed, the Company promptly
shall deliver to the Paying Agent a Notice of Redemption, which will be mailed
by the Company to each Holder at least five Business Days prior to the date
such Notice of Redemption is required to be mailed pursuant to the Articles
Supplementary. The Paying Agent shall have no responsibility to confirm or
verify the accuracy of any such Notice.
3.3. The Company to Provide Funds for Dividends,
Redemptions and Additional Dividends.
(a) Not later than noon on each Dividend Payment Date,
the Company shall deposit with the Paying Agent an aggregate
amount of Federal Funds or similar same-day funds equal to
the declared dividends to be paid to Holders on such Dividend
Payment Date, and shall give the Paying Agent irrevocable
instructions to apply such funds to the payment of such
dividends on such Dividend Payment Date.
(b) If the Company shall give a Notice of Redemption,
then by noon of the date fixed for redemption, the Company
shall deposit in trust with the Paying Agent an aggregate
amount of Federal Funds or similar same-day funds sufficient
to redeem such shares of AMPS called for redemption and shall
give the Paying Agent irrevocable instructions and authority
to pay the redemption price to the Holders of shares of AMPS
called for redemption upon surrender of the certificate or
certificates therefor.
(c) If the Company provides notice to the Auction Agent
of a Retroactive Taxable Allocation, the Company, within 30
days after such notice is given and by noon of the date fixed
for payment of an Additional Dividend, shall deposit in trust
with the Paying Agent an aggregate amount of Federal Funds or
similar same-day funds equal to such Additional Dividend and
shall give the Paying Agent irrevocable instructions and
authority to pay the Additional Dividend to Holders (or
former Holders) entitled thereto.
3.4. Disbursing Dividends, Redemption Price
and Additional Dividends.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Company described in Sections 3.3(a), (b) and (c) above,
the Paying Agent shall pay to the Holders (or former Holders) entitled thereto
(i) on each corresponding Dividend Payment Date, dividends on the shares of
AMPS, (ii) on any date fixed for redemption, the redemption price of any shares
of AMPS called for redemption and (iii) on the date fixed for payment of an
Additional Dividend, such Additional Dividend. The amount of dividends for any
Dividend Period to be paid by the Paying Agent to Holders will be determined by
the Company as set forth in Paragraph 2 of the Articles Supplementary. The
redemption price to be paid by the Paying Agent to the Holders of any shares of
AMPS called for redemption will be determined as set forth in Paragraph 4 of the
Articles Supplementary. The amount of Additional Dividends to be
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paid by the Paying Agent in the event of a Retroactive Taxable Allocation to
Holders will be determined by the Company pursuant to paragraph 2(e) of the
Articles Supplementary. The Company shall notify the Paying Agent in writing of
a decision to redeem any shares of AMPS on or prior to the date specified in
Section 3.2 above, and such notice by the Company to the Paying Agent shall
contain the information required to be stated in a Notice of Redemption required
to be mailed by the Company to such Holders. 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.
IV. 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 AMPS, one certificate
for each series of AMPS shall be issued by the Company and registered in the
name of Cede & Co., as nominee of the Securities Depository, and countersigned
by the Paying Agent. The Company will give the Auction Agent prior written
notice and instruction as to the issuance and redemption of AMPS.
4.2. Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, the shares of each series of
AMPS shall be registered solely in the name of the Securities Depository or its
nominee. If the Securities Depository shall give notice of its intention to
resign as such, and if the Company shall not have selected a substitute
Securities Depository acceptable to the Paying Agent prior to such resignation,
then upon such resignation, the shares of each series of AMPS, at the Company's
request, may be registered for transfer or exchange, and new certificates
thereupon shall be issued in the name of the designated transferee or
transferees, upon surrender of the old certificate in form deemed by the Paying
Agent properly endorsed for transfer with (a) all necessary endorsers'
signatures guaranteed in such manner and form as the Paying Agent may require
by a guarantor reasonably believed by the Paying Agent to be responsible, (b)
such assurances as the Paying Agent shall deem necessary or appropriate to
evidence the genuineness and effectiveness of each necessary endorsement and
(c) satisfactory evidence of compliance with all applicable laws relating to
the collection of taxes in connection with any registration of transfer or
exchange or funds necessary for the payment of such taxes. If the certificate
or certificates for shares of AMPS are not held by the Securities Depository or
its nominee, 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 therefor.
4.3. Removal of Legend.
Any request for removal of a legend indicating a restriction on
transfer from a certificate evidencing shares of AMPS shall be accompanied by
an opinion of counsel stating that such legend may be removed and such shares
may be transferred free of the restriction described in such legend, said
opinion to be delivered under cover of a letter from a Company Officer
authorizing the Paying Agent to remove the legend on the basis of said opinion.
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4.4. Lost, Stolen or Destroyed Stock Certificates.
The Paying Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Company
and by the Paying Agent, subject at all times to provisions of law, the By-Laws
of the Company governing such matters and resolutions adopted by the Company
with respect to lost, stolen or destroyed securities. The Paying Agent may
issue new certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Company to the Paying Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Company to the Paying Agent that such
issuance will comply with provisions of applicable law and the By-Laws and
resolutions of the Company.
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 for two calendar years from the date of such cancellation. The
Paying Agent, upon written request by the Company, shall afford to the Company,
its agents and counsel access at reasonable times during normal business hours
to review and make extracts or copies (at the Company's sole cost and expense)
of such certificates and accompanying documentation. Upon request by the
Company at any time after the expiration of this two-year period, the Paying
Agent shall deliver to the Company the canceled certificates and accompanying
documentation. The Company, at its expense, shall retain such records for a
minimum additional period of four calendar years from the date of delivery of
the records to the Company and shall make such records available during this
period at any time, or from time to time, for reasonable periodic, special, or
other examinations by representatives of the Securities and Exchange
Commission. The Company also shall undertake to furnish to the Securities and
Exchange Commission, upon demand, either at their principal office or at any
regional office, complete, correct and current hard copies of any and all such
records. Thereafter, such records shall not be destroyed by the Company 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. Stock Register.
The Paying Agent shall maintain the stock register, which shall
contain a list of the Holders, the number of shares held by each Holder and the
address of each Holder. The Paying Agent shall record in the stock register any
change of address of a Holder upon notice by such Holder. In case of any
written request or demand for the inspection of the stock register or any other
books of the Company in the possession of the Paying Agent, the Paying Agent
will notify the Company and secure instructions as to permitting or refusing
such inspection. The Paying Agent reserves the right, however, to exhibit the
stock register or other records to any person in case it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Company shall have offered indemnification satisfactory
to the Paying Agent.
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4.7. Return of Funds.
Any funds deposited with the Paying Agent by the Company for any
reason under this Agreement, including for the payment of dividends or the
redemption of shares of any series of AMPS, that remain with the Paying Agent
after 12 months shall be repaid to the Company upon written request by the
Company.
V. REPRESENTATIONS AND WARRANTIES.
5.1. Representations and Warranties of the Company.
The Company represents and warrants to the Auction Agent that:
(i) the Company is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland,
and has full power to execute and deliver this Agreement and to
authorize, create and issue the shares of AMPS;
(ii) the Company is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified, management investment company;
(iii) this Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject as to such enforceability to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equitable principles;
(iv) the forms of the certificates evidencing the shares of each
series of AMPS comply with all applicable laws of the State of
Maryland;
(v) the shares of each series of AMPS have been duly and validly
authorized by the Company and, upon completion of the initial sale of
the shares of such series of AMPS and receipt of payment therefor,
will be validly issued, fully paid and nonassessable;
(vi) at the time of the offering of the shares of each series of
AMPS, the shares offered will be registered under the Securities Act
of 1933, as amended, and no further action by or before any
governmental body or authority of the United States or of any state
thereof is required in connection with the execution and delivery of
this Agreement or will be required in connection with the issuance of
the shares of AMPS, except such action as required by applicable state
securities or insurance laws, all of which action will have been
taken;
(vii) the execution and delivery of this Agreement and the issuance
and delivery of the shares of each series of AMPS do not and will not
conflict with, violate, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, the
Charter or the By-Laws of the Company, any law or regulation
applicable to the Company, any order or decree of any court or public
authority having jurisdiction over the Company, or
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any mortgage, indenture, contract, agreement or undertaking to which
the Company is a party or by which it is bound; and
(viii) no taxes are payable upon or in respect of the execution of
this Agreement or will be payable upon or in respect of the issuance
of the shares of each series of AMPS.
5.2. Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Company that the
Auction Agent is duly organized and is validly existing as a banking
corporation in good standing under the laws of the State of New York, and has
the corporate power to enter into and perform its obligations under this
Agreement.
VI. THE AUCTION AGENT.
6.1. Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the
Company hereunder and owes no fiduciary duties to any Person
except as 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. The Auction Agent shall not be liable for any
error of judgment made in good faith unless the Auction Agent
shall have been negligent in ascertaining (or failing to
ascertain) the pertinent facts.
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
believes in good faith to have been given by the Company or
by a Broker-Dealer. The Auction Agent may record telephone
communications with the Company or with the Broker-Dealers or
with both.
(b) The Auction Agent may consult with counsel of its
choice, and the written advice of such counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
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(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become
exposed to financial liability in the performance of its
duties hereunder. The Auction Agent shall be under no
liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
(d) The Auction Agent may perform its duties and exercise
its rights hereunder either directly or by or through agents
or attorneys.
6.3. Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or the
adequacy of this Agreement, the Broker-Dealer Agreements or the AMPS.
6.4. Compensation, Expenses and Indemnification.
(a) The Company shall pay to the Auction Agent 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 Company and the Auction Agent, subject to adjustments
if the AMPS no longer are held of record by the Securities
Depository or its nominee or if there shall be such other
change as shall increase materially the Auction Agent's
obligations hereunder or under the Broker-Dealer Agreements.
(b) The Company shall reimburse the Auction Agent upon
its request for all reasonable expenses, disbursements and
advances incurred or made by the Auction Agent in accordance
with any provision of this Agreement and of the Broker-Dealer
Agreements (including the reasonable compensation, expenses
and disbursements of its agents and counsel), except any
expense, disbursement or advance attributable to its
negligence or bad faith.
(c) The Company shall indemnify the Auction Agent for,
and hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part arising
out of or in connection with its agency under this Agreement
and under the Broker-Dealer Agreements, including the costs
and expenses of defending itself against any claim of
liability in connection with its exercise or performance of
any of its duties hereunder and thereunder, except such as
may result from its negligence or bad faith.
VII. MISCELLANEOUS.
7.1. Term of Agreement.
(a) The term of this Agreement is unlimited unless it
shall be terminated as provided in this Section 7.1. The
Company may terminate this Agreement at any time by so
notifying the Auction Agent, provided that if any AMPS remain
outstanding the Company shall have entered into an agreement
in substantially the form of this Agreement with a successor
auction agent. The Auction Agent may
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terminate this Agreement upon prior notice to the Company on
the date specified in such notice, which date shall be no
earlier than 60 days after delivery of such notice. If the
Auction Agent resigns while any shares of AMPS remain
outstanding, the Company shall use its best efforts to enter
into an agreement with a successor auction agent containing
substantially the same terms and conditions as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b),
the respective rights and duties of the Company and the
Auction Agent under this Agreement shall cease upon
termination of this Agreement. The Company's representations,
warranties, covenants and obligations to the Auction Agent
under Sections 5 and 6.4 hereof shall survive the termination
hereof. Upon termination of this Agreement, the Auction Agent
shall (i) resign as Auction Agent under the Broker-Dealer
Agreements, (ii) at the Company's request, deliver promptly to
the Company copies of all books and records maintained by it
in connection with its duties hereunder, and (iii) at the
request of the Company, transfer promptly to the Company or to
any successor auction agent any funds deposited by the Company
with the Auction Agent (whether in its capacity as Auction
Agent or as Paying Agent) pursuant to this Agreement which
have not been distributed previously by the Auction Agent in
accordance with this Agreement.
7.2. Communications.
Except for (i) communications authorized to be made by telephone
pursuant to this Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in
writing), all notices, requests and other communications to any party hereunder
shall be in writing (including telecopy or similar writing) and shall be given
to such party at its address or telecopier number set forth below:
If to the Company, MuniHoldings California Insured Fund V, Inc.
addressed to: 000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction IBJ Whitehall Bank & Trust Company
Agent, addressed to: Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Window Subcellar 1
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when
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delivered at the address specified herein. Communications shall be given on
behalf of the Company by a Company Officer and on behalf of the Auction Agent
by an Authorized Officer.
7.3. Entire Agreement.
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or
inferred, between the parties relating to the subject matter hereof, except for
agreements relating to the compensation of the Auction Agent.
7.4. Benefits.
Nothing herein, express or implied, shall give to any Person, other
than the Company, the Auction Agent and their respective successors and
assigns, any benefit of any legal or equitable right, remedy or claim
hereunder.
7.5. Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or
in part, except by a written instrument signed by a duly
authorized representative of the party to be charged. The
Company shall notify the Auction Agent of any change in the
Articles Supplementary prior to the effective date of any
such change. If any such change in the Articles Supplementary
materially increases the Auction Agent's obligations
hereunder, the Company shall obtain the written consent to
the Auction Agent prior to the effective date of such change.
(b) Failure of either party hereto to exercise any right
or remedy hereunder in the event of a breach hereof by the
other party shall not constitute a waiver of any such right
or remedy with respect to any subsequent breach.
7.6. Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of the
Company and the Auction Agent. This Agreement may not be assigned by either
party hereto absent the prior written consent of the other party, which consent
shall not be withheld unreasonably.
7.7. Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8. Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
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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.
MUNIHOLDINGS CALIFORNIA INSURED
FUND V, INC.
By:
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Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
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Name:
Title:
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