EXHIBIT (K)(4)
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BOOK-ENTRY-ONLY AUCTION-RATE/MONEY MARKET PREFERRED/AND REMARKETED
PREFERRED SECURITIES
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Letter of Representations
[To be Completed by Issuer and Trust Company]
MuniHoldings Insured Fund III, Inc.
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[Name of Issuer]
IBJ Whitehall Bank & Trust Company
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[Name of Trust Company]
Attention: General Counsel's Office ____________, 1999
The Depository Trust Company [Date]
00 Xxxxx Xxxxxx; 00xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Re: MuniHoldings Insured Fund III, Inc.
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Issuance of Auction Market Preferred Shares ("AMPS")
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Series A (# ) and Series B (# )
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[Issue Description, including CUSIP number]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trust Company will
act as transfer agent, registrar, dividend disbursing agent, and redemption
agent with respect to the Securities. The Securities will be issued pursuant to
a prospectus, private placement memorandum, or other such document authorizing
the issuance of a Securities dated _________, 1999 (the "Document"). Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated ["Underwriter"]
is distributing the Securities through the Depositary Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with respect to the Securities, Issue and Trust Company
make the following representations to DTC:
1. Prior to closing on the Securities on _________, 1999, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., which represents the total number of Securities issued.
Said certificate shall remain in DTC's custody as provided in the Document. If
however, the aggregate principal amount of the Securities exceed $200 million,
one certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each Security certificate shall bear the following
legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a California corporation ("DTC"), to
issuer or its agent for registration of transfer, exchange, or payment, and
any certificate issued is registered in the name of Cede & Co., or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest therein.
2. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificate(s) by virtue of submission of such certificate(s) to DTC.
3. In the event of any solicitation of consents from or voting by holders
of the Securities, Issuer shall establish a record date for such purposes (with
no provision for revocation of consents or votes by subsequent holders) and
shall send notice of such record date to DTC not less than 15 calendar days in
advance of such record date. Notices to DTC pursuant to this Paragraph by
telecopy shall be sent to DTC's Reorganization Department at (000) 000-0000 or
(000) 000-0000, and receipt of such notices shall be confirmed by telephoning
(000) 000-0000. Notices to DTC pursuant to this Paragraph by mail or by any
other means shall be sent to DTC's Reorganization Department as indicated in
Paragraph 5.
4. In the event of a full or partial redemption of the outstanding
Securities, Issuer or Trust Company shall send a notice to DTC specifying: (a)
the number of Securities to be redeemed; and (b) the date such notice is to be
distributed to Security holders or published (the "Publication Date"). Such
notice shall be sent to DTC by a secure means (e.g., legible telecopy,
registered or certified mail, overnight delivery) in a timely manner designed to
assure that such notice is in DTC's possession no later than the close of
business on the business day before or, if possible, two business days before
the Publication Date. Issuer or Trust Company shall forward such notice either
in a separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP number submitted in that transmission. (The
party sending such notice shall have a method to verify subsequently the use of
such means and the timeliness of such notice.) The Publication date shall be
not less than 30 days nor more than 60 days prior to the redemption date.
Notices to DTC pursuant to this Paragraph by telecopy shall be sent to DTC's
Call Notification Department at (000) 000-0000 or (000) 000-0000. If the party
sending the notice does not receive a telecopy receipt from DTC confirming that
the notice has been received, such party shall telephone (000) 000-0000.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall be
sent to:
Manager; Call Notification Department
The Depository Trust Company
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
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5. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Trust
Company to Security holder specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate action by telecopy shall be sent to
DTC's Reorganization Department at (000) 000-0000 or (000) 000-0000, and receipt
of such notices shall be confirmed by telephoning (000) 000-0000. Notices to
DTC pursuant to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
6. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities (listed on Schedule A hereto) and the accompanying
description of such Security, which as of the date of this letter is
"______________________________________".
7. The Document indicates that the dividend rate for the Securities may
vary from time to time. Absent other existing arrangements with DTC, Issuer or
Trust Company shall give DTC notice of each such change in the dividend rate, on
the same day that the new rate is determined, by telephoning the Supervisor of
DTC's Dividend Announcement Section at (000) 000-0000, or by telecopy sent to
(000) 000-0000. Such verbal or telecopy notice shall be followed by prompt
written confirmation sent by a secure means in the manner set forth in Paragraph
4 to:
Manager; Announcements
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
8. The Document indicates that each purchaser must sign a purchaser's
letter which contains provisions restricting transfer of the Securities
purchased. Issuer and Trust Company acknowledge that as long as Cede & Co. is
the sole record owner of the Securities, Cede & Co. shall be entitled to all
voting rights applicable to the Securities and to receive the full amount of all
dividends, liquidation proceeds, and redemption proceeds payable with respect to
the Securities, even if the credits of Securities to the DTC accounts of any DTC
Participant ("Participant") result from transfers or failures to transfer in
violation of the provisions of the purchaser's letter. Issuer and Trust Company
acknowledge that DTC shall treat any Participant having Securities credited to
its DTC accounts as entitled to the full benefits of ownership of such
Securities. Without limiting the generality of the preceding sentence, Issuer
and Trust Company acknowledge that DTC shall treat any Participant having
securities credited to its DTC accounts as entitled to receive dividends,
distributions, and voting rights, if any, in respect of Securities and, subject
to Paragraphs 12 and 13, to receive certificates evidencing Securities if such
certificates are to be issued in accordance with Issuer's certificate of
incorporation. (The Treatment by DTC of the effects of the crediting by it of
Securities to the accounts of Participants described in the preceding two
sentences shall not affect the rights of Issuer, participants in auctions
relating to the Securities, purchasers, sellers, or holders of Securities
against any Participant.) DTC shall not have any responsibility to ascertain
whether any transfer of Securities is made in accordance with the provisions of
the purchaser's letter.
9. Issuer or Trust Company shall provide a written notice of dividend
payment and distribution information to a standard announcement service
subscribed to by DTC as soon as the information is
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available. In the unlikely event that no such service exists, Issuer or Trust
Company shall provide this information directly to DTC electronically, as
previously arranged by Issuer or Trust Company and DTC, as soon as the
information is available. If electronic transmission has not been arranged,
absent any other arrangements between Issuer or Trust Company and DTC, such
information should be sent by telecopy to DTC's Dividend Department at (212)
709-1723 or (000) 000-0000, and receipt of such notices shall be confirmed by
telephoning (000) 000-0000. Notices to DTC pursuant to the above by mail or by
any other means shall be addressed as follows:
Manager; Announcements
Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
10. Issuer or Trust Company shall provide CUSIP-level detail for dividend
payments and distributions to DTC no later than noon (Eastern Time) on the
payment date.
11. Dividend payments and distributions shall be received by Cede & Co.,
as nominee of DTC, or its registered assignees in same-day funds no later than
2:30 p.m. (Eastern Time) on each payment date. Absent any other arrangements
between Issuer or Trust Company and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 21
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account #066-026776
12. Redemption payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds no later than 2:30 p.m.
(Eastern Time) on the payment date. Absent any other arrangements between
Issuer or Trust Company and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 21
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Deposit Account #066-027306
13. Reorganization payments and CUSIP-level detail resulting from
corporate actions (such as tender offers, remarketings, or mergers) hall be
received by Cede & co., as nominee of DTC, or its registered assigns in same-day
funds no later than 2:30 p.m. (Eastern Time) on the first payment date. Absent
any other arrangement between Issuer or Trust Company and DTC, such funds shall
be wired as follows:
The Chase Manhattan Bank
ABA #021 000 21
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Deposit Account #066-027608
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14. DTC may direct Issuer or Trust Company to use any other number or
address as the number or address to which notices, payments of dividends,
distributions, or redemption proceeds may be sent.
15. In the event of a redemption acceleration, or any similar transaction
(e.g., tender made and accepted in response to Issuer's or Trust Company's
invitation) necessitating a reduction in the number of Securities outstanding,
or an advance refunding of part of the Securities outstanding DTC, in its
discretion: (a) may request Issuer or Trust Company to issue and authenticate a
new Security certificate; or (b) may make an appropriate notation on the
Security certificate indicating the date and amount of such reduction in the
number of Securities outstanding, except in the case of final redemption, in
which case the certificate the certificate will be presented to Issuer or Trust
Company prior to payment, if required.
16. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trust
company shall notify DTC of the availability of certificates. In such event,
Issuer or Trust Company shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
17. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Trust Company (at which time DTC will confirm with Issuer or Trust Company
the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trust Company shall cooperate fully
with DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
18. Issuer hereby authorized DTC to provide to Trust Company security
position listings of Participants with respect to the Securities from time to
time at the request of Trust Company. Issuer also authorizes DTC, in the event
of a partial redemption of Securities, to provide Trust Company, upon request,
with the names of those Participants whose positions in Securities have been
selected for redemption by DTC. DTC will use its best efforts to notify Trust
Company of those Participants whose positions in Securities have been selected
for redemption by DTC. Issuer authorizes and instructs Trust Company to provide
DTC with such signatures, examples of signatures, and authorizations to act as
may be deemed necessary or appropriate by DTC to permit DTC to discharge its
obligations to its Participants and appropriate regulatory authorities. Such
requests for security position listings shall be sent to DTC's Reorganization
Department in the manner set forth in Paragraph 5.
This authorization, unless revoked by Issuer, shall continue with respect
to the Securities while any Securities are on deposit at DTC, until and unless
Trust Company shall no longer be acting. In such event, Issuer shall provide
DTC with similar evidence, satisfactory to DTC, of the authorization of any
successor thereto so to act.
19. Nothing herein shall be deemed to require Trust Company to advance
funds on behalf of Issuer.
20. This Letter of Representations may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts together constitute but one and the same instrument.
21. This Letter of Representations is governed by, and shall be construed
in accordance with, the laws of the State of California.
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22. The following riders, attached hereto, are hereby incorporated into
this Letter of Representations:
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Notes: Very truly yours,
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A. If there is a Trust Company (as
defined in this Letter of MUNIHOLDINGS INSURED FUND III, INC.
Representations), Trust Company as well (Issuer)
as Issuer must sign this Letter. If
there is no Trust Company, in signing By: _______________________________________
this Letter Issuer itself undertakes to (Authorized Officer's Signature)
perform all of the obligations set forth
herein.
B. Schedule B contains statements that
DTC believes accurately describe DTC,
the method of effecting book-entry
transfers of securities distributed
through DTC, and certain related matters. IBJ WHITEHALL BANK & TRUST COMPANY
(Trust Company)
By: __________________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ______________________________
cc: Underwriter
Underwriter's Counsel
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SCHEDULE A
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(Describe Issue)
CUSIP Number Share Total Value ($ Amount)
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RIDER TO THE LETTER OF REPRESENTATIONS
of
MUNIHOLDINGS INSURED FUND III
and
IBJ WHITEHALL BANK & TRUST COMPANY
Dated _________, 1999
1. This Rider supersedes any contradictory language set forth in the Letter of
Representations to which it is appended. Capitalized terms used and not
defined herein have the meaning set forth in the Letter of Representations
to which this Rider is appended.
2. The Prospectus indicates that in the event the Issuer retroactively
allocates any net capital gains or other income subject to regular Federal
income tax to shares of AMPS without having given advance notice thereof to
the Auction Agent as described in the Prospectus solely by reason of the
fact that such allocation is made as a result of the redemption of all or a
portion of the shares of AMPS outstanding or the liquidation of the Issuer
(the amount of such allocation being referred to herein as a "Retroactive
Taxable Allocation"), the Issuer, within 90 days (and generally within 60
days) after the end of the Issuer's fiscal year for which a Retroactive
Taxable Allocation is made, will provide notice thereof to the Auction Agent
and to each holder of shares of AMPS (initially Cede & Co. as nominee of
DTC) during such fiscal year at such holder's address as the same appears or
last appeared on the stock books of the Issuer. The Issuer, 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 of AMPS), out of funds
legally available therefor, an amount equal to the aggregate Additional
Dividend with respect to all Retroactive Taxable Allocations made to such
holders during the fiscal year in question.
3. The Issuer will notify DTC, at least 10 Business Days prior to the payment
date for any Additional Dividends, of (i) the record date for holders of
shares of AMPS entitled to receive Additional Dividends, (ii) the amount of
Additional Dividends payable on a per share basis to such holders and (iii)
the CUSIP numbers set forth on the stock certificates representing such
shares of AMPS.
4. The Prospectus indicates that if the Issuer does not give advance notice of
the amount of net capital gains or other income subject to regular Federal
income tax to be included in a dividend on shares of AMPS in the related
Auction, the Issuer may include such taxable income in a dividend on shares
of AMPS if it increases the dividend by an additional amount calculated as
if such income were a Retroactive Taxable Allocation and the additional
amount were an Additional Dividend. The Issuer or the Auction Agent will
notify DTC, at least five Business Days prior to the applicable Dividend
Payment Date, of the amount of such additional amount to be included in the
dividend on a per share basis.
5. The Prospectus indicates that in the event a Response (as defined in the
Prospectus) indicates that it is advisable that the Issuer give a Notice of
Special Dividend Period (as defined in the Prospectus) for the AMPS, the
Issuer, by no later than the second Business Day prior to the relevant
Auction Date (as defined in the Prospectus), may give a Notice of Special
Dividend Period to the Auction Agent, DTC and each Broker-Dealer (as defined
in the Prospectus),
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which notice will specify (i) the duration of the Special Dividend Period (as
defined in the Prospectus), (ii) the Optional Redemption Price as specified in
the related Response and (iii) the Specific Redemption Provisions, if any, as
specified in the related Response. The Issuer is required to give telephonic and
written notice (a "Notice of Revocation") to the Auction Agent, each Broker-
Dealer, and DTC (as described in paragraph 6 hereof) on or prior to the Business
Day prior to the relevant Auction Date under the circumstances specified in the
Prospectus.
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