Exhibit (k)(4)
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AUCTION AGENT AGREEMENT
between
MUNIHOLDINGS FUND, INC.
and
THE BANK OF NEW YORK
Dated as of [__], 2005
Relating to
AUCTION MARKET PREFERRED STOCK
("AMPS"),
Series C
of
MUNIHOLDINGS FUND, INC.
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THIS AUCTION AGENT AGREEMENT, dated as of [__], 2005, is between
MUNIHOLDINGS FUND, INC., a Maryland corporation (the "Company"), and THE BANK
OF NEW YORK, a New York banking corporation.
The Company proposes to duly authorize and issue 600 shares of
Auction Market Preferred Stock, Series C ("Series C AMPS") with a par value of
$.10 per share and a liquidation preference of $25,000 per share plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared), pursuant to the Company's Articles Supplementary (as defined
below). The Series C AMPS are sometimes referred to as the "AMPS." A separate
Auction (as defined below) will be conducted for the AMPS. The Company desires
that The Bank of New York perform certain duties as agent in connection with
each Auction of shares of AMPS (in such capacity, the "Auction Agent"), and as
the transfer agent, registrar, dividend disbursing agent and redemption agent
with respect to the shares of AMPS (in such capacity, the "Paying Agent"),
upon the terms and conditions of this Agreement, and the Company hereby
appoints The Bank of New York as said Auction Agent and Paying Agent in
accordance with those terms and conditions (hereinafter generally referred to
as the "Auction Agent," except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Auction Agent agree as
follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
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1.1. Terms Defined by Reference to Articles Supplementary.
Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.
1.2. Terms Defined Herein.
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As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context
otherwise requires:
(a) "Affiliate" shall mean any Person, other 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 [__], 2005 with
the state of Maryland.
(d) "Auction" shall have the meaning specified in Section
2.1 hereof.
(e) "Auction Agent Acceptance Fee" means an acceptance fee
as set forth in a written agreement between the Auction
Agent and the Company.
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(f) "Auction Agent Fee" means the fees, other than the
Auction Agent Acceptance Fee, set forth in a written
agreement signed by the Auction Agent and the Company.
(g) "Auction Procedures" shall mean the Auction Procedures
that are set forth in Paragraph 10 of the Articles
Supplementary.
(h) "Authorized Officer" shall mean each Vice President,
Assistant Vice President, and Assistant Treasurer of the
Auction Agent assigned to the Dealing and Trading Group of
its Corporate Trust Department, and every other officer or
employee of the Auction Agent designated as an "Authorized
Officer" for purposes hereof in a written communication to
the Company.
(i) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a Broker-Dealer substantially
in the form attached hereto as Exhibit A.
(j) "Company Officer" shall mean the Chairman and Chief
Executive Officer, the President, each Vice President
(whether or not designated by a number or word or words
added before or after the title "Vice President"), the
Secretary, the Treasurer, each Assistant Secretary and each
Assistant Treasurer of the Company and every other officer
or employee of the Company designated as a "Company Officer"
for purposes hereof in a written notice from the Company to
the Auction Agent.
(k) "Holder" shall be a holder of record of one or more
shares of AMPS, listed as such in the stock register
maintained by the Paying Agent pursuant to Section 4.6
hereof.
(l) "Settlement Procedures" shall mean the Settlement
Procedures attached as Exhibit A to the Broker-Dealer
Agreement.
1.3. Rules of Construction.
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Unless the context or use indicates another or different meaning or intent,
the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of
this Agreement nor shall they affect its meaning,
construction or effect.
(c) The words "hereof," "herein," "hereto," and other words
of similar import refer to this Agreement as a whole.
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(d) All references herein to a particular time of day shall
be to Eastern Standard Time.
II. THE AUCTION.
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2.1. Purpose; Incorporation by Reference of Auction Procedures
and Settlement Procedures.
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(a) The Articles Supplementary provide that the Applicable
Rate on shares of Series C AMPS for each Dividend Period
therefor after the Initial Dividend Period shall be the rate
per annum that a commercial bank, trust company or other
financial institution appointed by the Company advises
results from implementation of the Auction Procedures. The
Board of Directors of the Company has adopted a resolution
appointing The Bank of New York as Auction Agent for
purposes of the Auction Procedures. The Auction Agent hereby
accepts such appointment and agrees that, on each Auction
Date, it shall follow the procedures set forth in this
Section 2 and the Auction Procedures for the purpose of
determining the Applicable Rate for the AMPS for the next
Dividend Period therefor. Each periodic operation of such
procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction
Procedures and in the Settlement Procedures are incorporated
herein by reference in their entirety and shall be deemed to
be a part hereof to the same extent as if such provisions
were set forth fully herein. In the case of any conflict
between the terms of any document incorporated herein by
reference and the terms hereof, the Auction Agent is,
subject to its obligations as set forth in Section 6.1,
authorized to perform its duties according to the terms
hereof, and shall have no liability for so doing.
2.2. Preparation for Each Auction; Maintenance
of Registry of Existing Holders.
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(a) As of the date hereof, the Company shall provide the
Auction Agent with a list of the Broker-Dealers and shall
cause to be delivered to the Auction Agent for execution by
the Auction Agent a Broker-Dealer Agreement signed by each
such Broker-Dealer. The Auction Agent shall keep a list of
Broker-Dealers with whom it has signed such Broker-Dealer
Agreements, and shall endeavor to keep such list current and
accurate and shall indicate thereon, or on a separate list,
the identity of each Existing Holder, if any, whose most
recent Order was submitted by a Broker-Dealer on such list
and resulted in such Existing Holder continuing to hold or
purchasing shares of AMPS. Not later than five Business Days
prior to any Auction Date for which any change in such list
of Broker-Dealers is to be effective, the Company shall
notify the Auction Agent in writing of such change and, if
any such change is the addition of a Broker-Dealer to such
list, the Company shall cause to be delivered to the Auction
Agent for execution by the Auction Agent a Broker-Dealer
Agreement signed by such Broker-Dealer. The
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Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation
of any such Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction shall
be changed after the Auction Agent shall have given the
notice referred to in clause (vii) of Paragraph (a) of the
Settlement Procedures, the Auction Agent, by such means as
the Auction Agent deems practicable, shall give notice of
such change to the Broker-Dealers not later than the earlier
of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the old
Auction Date.
(c) The provisions contained in paragraph 2 of the Articles
Supplementary concerning Special Dividend Periods and the
notification of a Special Dividend Period will be followed
by the Company and, to the extent applicable, the Auction
Agent, and the provisions contained therein are incorporated
herein by reference in their entirety and shall be deemed to
be a part of this Agreement to the same extent as if such
provisions were set forth fully herein.
(d) (i) On each Auction Date, the Auction Agent shall
determine the Reference Rate and the Maximum Applicable
Rate. If the rate obtained by the Auction Agent is not
quoted on an interest or discount basis, the Auction Agent
shall convert the quoted rate to an interest rate after
consultation with the Company as to the method of such
conversion. Not later than 9:30 A.M. on each Auction Date,
the Auction Agent shall notify the Company and the
Broker-Dealers of the Reference Rate so determined and of
the Maximum Applicable Rate.
(ii) If the Reference Rate is the applicable LIBOR
Rate and such rate is to be based on rates supplied by LIBOR
Dealers and one or more of the LIBOR Dealers shall not
provide a quotation for the determination of the applicable
LIBOR Rate, the Auction Agent promptly shall notify the
Company so that the Company can determine whether to select
a Substitute LIBOR Dealer or Substitute LIBOR Dealers to
provide the quotation or quotations not being supplied by
any LIBOR Dealer or LIBOR Dealers. The Company promptly
shall advise the Auction Agent of any such selection. If the
Company does not select any such Substitute LIBOR Dealer or
Substitute LIBOR Dealers, then the rates shall be supplied
by the remaining LIBOR Dealer or LIBOR Dealers.
(iii) If, after the date of this Agreement, there
is any change in the prevailing rating of AMPS by either of
the rating agencies (or Substitute Rating Agency or
successor rating agency) referred to in the definition of
the Maximum Applicable Rate, subject to the provisions of
paragraph 12 of the Articles Supplementary, thereby
resulting in any change in the corresponding applicable
percentage or corresponding applicable spread for the AMPS,
as set forth in said definition (the "Percentage or
Spread"), the Company shall notify the Auction Agent in
writing of such change in the Percentage or Spread prior to
9:00 A.M. on the Auction Date for AMPS next succeeding such
change. The Percentage or
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Spread for the AMPS on the date of this Agreement is as
specified in paragraph 10(a)(vii) of the Articles
Supplementary. The Auction Agent shall be entitled to
conclusively rely on the last Percentage or Spread of which
it has received notice from the Company (or, in the absence
of such notice, the Percentage or Spread set forth in the
preceding sentence) in determining the Maximum Applicable
Rate as set forth in Section 2.2(d)(i) hereof.
(e) The Auction Agent shall maintain a current registry of
the Existing Holders of the shares of AMPS for purposes of
each Auction. The Company shall use its best efforts to
provide or cause to be provided to the Auction Agent within
ten Business Days following the date of the Closing a list
of the initial Existing Holders of AMPS, and the
Broker-Dealer of each such Existing Holder through which
such Existing Holder purchased such shares. The Auction
Agent may conclusively rely upon, as evidence of the
identities of the Existing Holders, such list, the results
of each Auction and notices from any Existing Holder, the
Agent Member of any Existing Holder or the Broker-Dealer of
any Existing Holder with respect to such Existing Holder's
transfer of any shares of AMPS to another Person.
(f) In the event of any partial redemption of AMPS, upon
notice by the Company to the Auction Agent of such partial
redemption, the Auction Agent promptly shall request the
Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers
of shares) from the accounts of which shares have been
called for redemption and the person or department at such
Agent Member to contact regarding such redemption, and at
least two Business Days prior to the Auction preceding the
date of redemption with respect to shares of AMPS being
partially redeemed, the Auction Agent shall request each
Agent Member so identified to disclose to the Auction Agent
(upon selection by such Agent Member of the Existing Holders
whose shares are to be redeemed) the number of shares of
AMPS of each such Existing Holder, if any, to be redeemed by
the Company, provided that the Auction Agent has been
furnished with the name and telephone number of a person or
department at such Agent Member from which it is to request
such information. In the absence of receiving any such
information with respect to an Existing Holder, from such
Existing Holder's Agent Member or otherwise, the Auction
Agent may continue to treat such Existing Holder as having
ownership of the number of shares of AMPS shown in the
Auction Agent's registry of Existing Holders.
(i) The Auction Agent shall register a transfer of
the ownership of shares of AMPS from an Existing Holder to
another Existing Holder, or to another Person if permitted
by the Company, only if (A) such transfer is made pursuant
to an Auction or (B) if such transfer is made other than
pursuant to an Auction, the Auction Agent has been notified
of such transfer in writing in a notice substantially in the
form of Exhibit C to the Broker-Dealer Agreements, by such
Existing Holder or by the Agent Member of such Existing
Holder. The Auction Agent is not required to accept any
notice of transfer delivered for an Auction unless it is
received by the Auction Agent by 3:00 P.M. on the Business
Day next
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preceding the applicable Auction Date. The Auction Agent
shall rescind a transfer made on the registry of the
Existing Holders of any shares of AMPS if the Auction Agent
has been notified in writing, in a notice substantially in
the form of Exhibit D to the Broker-Dealer Agreement, by the
Agent Member or the Broker-Dealer of any Person that (i)
purchased any shares of AMPS and the seller failed to
deliver such shares or (ii) sold any shares of AMPS and the
purchaser failed to make payment to such Person upon
delivery to the purchaser of such shares.
(g) The Auction Agent may, but shall not be obligated, to
request that the Broker-Dealers, as set forth in Section
3.2(c) of the Broker-Dealer Agreements, provide the Auction
Agent with a list of their respective customers that such
Broker-Dealers believe are Beneficial Owners of shares of
AMPS. The Auction Agent shall keep confidential any such
information and shall not disclose any such information so
provided to any Person other than the relevant Broker-Dealer
and the Company; provided, however, that the Auction Agent
reserves the right and is authorized to disclose any such
information if (i) it is ordered to do so by a court of
competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to
compel such disclosure, (ii) it is advised by its counsel
that its failure to do so would be unlawful or (iii) failure
to do so would expose the Auction Agent to loss, liability,
claim, damage or expense for which it has not received
indemnity or security satisfactory to it.
2.3. Auction Schedule.
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The Auction Agent shall conduct Auctions in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent
with the consent of the Company, which consent shall not be withheld
unreasonably. The Auction Agent shall give notice of any such change to each
Broker-Dealer. Such notice shall be received prior to the first Auction Date
on which any such change shall be effective. The Auction Agent will follow The
Bond Market Association's Market Practice U.S. Holiday Recommendations for
shortened trading days for bond markets (the "BMA Recommendation") unless the
Auction Agent is instructed otherwise by the Company. In the event of a BMA
Recommendation on an Auction Date, the Submission Deadline will be 11:30 A.M.
instead of 1:00 P.M. and as a result the notice of Auction results will occur
at an earlier time.
Time Event
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By 9:30 A.M. Auction Agent advises the Company and
the Broker-Dealers of the Reference
Rate and the Maximum Applicable Rate
as set forth in Section 2.2(d)(i)
hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers
as provided in Paragraph 10(c)(i) of
the Articles Supplementary. Submission
deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations
pursuant to Paragraph 10(d)(i) of the
Articles Supplementary.
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By approximately Auction Agent advises the Company of
3:00 P.M. 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.
Auction Agent gives notice of the
Auction results as set forth in
Section 2.4 hereof.
2.4. Notice of Auction Results.
-------------------------
On each Auction Date, the Auction Agent shall notify Broker-Dealers
of the results of the Auction held on such date by telephone or other mutually
acceptable electronic means as set forth in Paragraph (a) of the Settlement
Procedures. Unless instructed otherwise in writing by the Company, the Auction
Agent is authorized to release the Applicable Rate determined as a result of
the Auction for public dissemination.
2.5. Broker-Dealers.
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(a) Not later than 12:00 noon on each Auction Date, the
Company shall pay to the Auction Agent in Federal Funds or
similar same-day funds an amount in cash equal to (i) in the
case of any Auction Date immediately preceding a 7-Day
Dividend Period, the product of (A) a fraction the numerator
of which is the number of days in such Dividend Period
(calculated by counting the first day of such Dividend
Period but excluding the last day thereof) and the
denominator of which is 360, times (B) 1/4 of 1%, times (C)
$25,000 times (D) the sum of the aggregate number of
Outstanding shares of AMPS and (ii) in the case of any
Special Dividend Period, the amount determined by mutual
consent of the Company and the Broker-Dealers pursuant to
Section 3.5 of the Broker-Dealer Agreements. The Auction
Agent shall apply such moneys as set forth in Section 3.5 of
the Broker-Dealer Agreements and shall thereafter remit to
the Company any remaining funds paid to the Auction Agent
pursuant to this Section 2.5(a).
(b) The Company may designate an Affiliate or 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) Subject to Section 2.2(a), the Auction Agent shall
maintain a list of Broker-Dealers.
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2.6. Ownership of Shares of AMPS and Submission of Bids by the
Company and its Affiliates.
--------------------------
Neither the Company nor any Affiliate of the Company may submit any
Sell Order or Bid, directly or indirectly, in any Auction, except that an
Affiliate of the Company that is a Broker-Dealer may submit a Sell Order or
Bid on behalf of a Beneficial Owner or a Potential Beneficial Owner. The
Company shall notify the Auction Agent if the Company or, to the best of the
Company's knowledge, any Affiliate of the Company becomes a Beneficial Owner
of any shares of AMPS. Any shares of AMPS redeemed, purchased or otherwise
acquired (i) by the Company shall not be reissued, except in accordance with
the requirements of the Securities Act of 1933, as amended, or (ii) by its
Affiliates shall not be transferred (other than to the Company). The Auction
Agent shall have no duty or liability with respect to enforcement of this
Section 2.6.
2.7. Access to and Maintenance of Auction Records.
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The Auction Agent shall afford to the Company, its agents,
independent registered public accounting firm and counsel, access at
reasonable times during normal business hours to review and make extracts or
copies (at the Company's sole cost and expense) of all books, records,
documents and other information concerning the conduct and results of
Auctions, provided that any such agent, accounting firm or counsel shall
furnish the Auction Agent with a letter from the Company requesting that the
Auction Agent afford such person access. The Auction Agent shall maintain
records relating to any Auction for a period of two years after such Auction
(unless requested by the Company to maintain such records for such longer
period not in excess of four years, then for such longer period which shall
not be in excess of four years), and such records, in reasonable detail, shall
accurately and fairly reflect the actions taken by the Auction Agent
hereunder. The Company agrees to keep confidential any information regarding
the customers of any Broker-Dealer received from the Auction Agent in
connection with this Agreement or any Auction, and shall not disclose such
information or permit the disclosure of such information without the prior
written consent of the applicable Broker-Dealer to anyone except such agent,
accounting firm or counsel engaged to audit or review the results of Auctions
as permitted by this Section 2.7, provided that the Company reserves the right
to disclose any such information if it is advised by its counsel that its
failure to do so would (i) be unlawful or (ii) expose it to liability, unless
the Broker-Dealer shall have offered indemnification satisfactory to the
Company. Any such agent, accounting firm or counsel, before having access to
such information, shall agree to keep such information confidential and not to
disclose such information or permit disclosure of such information without the
prior written consent of the applicable Broker-Dealer, provided that such
agent, accounting firm or counsel may reserve the right to disclose any such
information if it is advised by its counsel that its failure to do so would
(i) be unlawful or (ii) expose it to liability, unless the Broker-Dealer shall
have offered indemnification satisfactory to such agent, accountant or
counsel. The Auction Agent shall have no liability in connection with allowing
access to the Company's books, records, documents and other information
pursuant to the terms of this Section 2.7 to the Company, its agents,
independent public accountants and counsel.
III. THE AUCTION AGENT AS PAYING AGENT.
---------------------------------
3.1. The Paying Agent.
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The Board of Directors of the Company has adopted a resolution
appointing The Bank of New York as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Company in connection with any
shares of AMPS (in such capacity, the "Paying Agent"). The Paying Agent hereby
accepts such appointment and agrees to act in accordance with its standard
procedures and the provisions of the Articles Supplementary which are
specified herein with respect to the shares of AMPS and as set forth in this
Section 3.
3.2. The Company's Notices to the Paying Agent.
-----------------------------------------
Whenever any shares of AMPS are to be redeemed, the Company promptly
shall deliver to the Paying Agent a Notice of Redemption upon the terms set
forth in Section 4(c) of the Articles Supplementary, which will be mailed by
the Company to each Holder at least five Business Days prior to the date such
Notice of Redemption is required to be mailed pursuant to the Articles
Supplementary. The Paying Agent shall have no responsibility to confirm or
verify the accuracy of any such Notice.
3.3. The Company to Provide Funds for Dividends and Redemptions.
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(a) Not later than noon on each Dividend Payment Date, the
Company shall deposit with the Paying Agent an aggregate
amount of Federal Funds or similar same-day funds equal to
the declared dividends to be paid to Holders on such
Dividend Payment Date, and shall give the Paying Agent
irrevocable instructions to apply such funds to the payment
of such dividends on such Dividend Payment Date.
(b) If the Company shall give a Notice of Redemption, then
by noon of the date fixed for redemption, the Company shall
deposit in trust with the Paying Agent an aggregate amount
of Federal Funds or similar same-day funds sufficient to
redeem such shares of AMPS called for redemption and shall
give the Paying Agent irrevocable instructions and authority
to pay the redemption price to the Holders of shares of AMPS
called for redemption upon surrender of the certificate or
certificates therefor.
3.4. Disbursing Dividends and Redemption Price.
-----------------------------------------
After receipt of the Federal Funds or similar same-day funds and
instructions from the Company described in Sections 3.3(a) and (b) above, the
Paying Agent shall pay to the Holders (or former Holders) entitled thereto (i)
on each corresponding Dividend Payment Date, dividends on the shares of AMPS
and (ii) on any date fixed for redemption, the redemption price of any shares
of AMPS called for redemption. The amount of dividends for any Dividend Period
to be paid by the Paying Agent to Holders will be determined by the Company as
set forth in Paragraph 2 of the Articles Supplementary. The redemption price
to be paid by the Paying Agent to the Holders of any shares of AMPS called for
redemption will be determined as set forth in Paragraph 4 of the Articles
Supplementary. The Company shall notify the Paying Agent in writing of a
decision to redeem any shares of AMPS on or prior to the date specified in
Section 3.2 above, and such notice by the Company to the Paying Agent shall
contain the information required to be stated in a Notice of Redemption
required to be mailed by the
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Company to such Holders. The Paying Agent shall have no duty to determine the
redemption price and may rely conclusively on the amount thereof set forth in
a Notice of Redemption.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
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4.1. Original Issue of Stock Certificates.
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On the Date of Original Issue for any share of AMPS, one certificate
for the AMPS shall be issued by the Company and registered in the name of Cede
& Co., as nominee of the Securities Depository, and countersigned by the
Paying Agent. The Company will give the Auction Agent prior written notice and
instruction as to the issuance and redemption of AMPS.
4.2. Registration of Transfer or Exchange of Shares.
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Except as provided in this Section 4.2, the shares of AMPS shall be
registered solely in the name of the Securities Depository or its nominee. If
the Securities Depository shall give notice of its intention to resign as
such, and if the Company shall not have selected a substitute Securities
Depository acceptable to the Paying Agent prior to such resignation, then upon
such resignation, the shares of AMPS, at the Company's request, may be
registered for transfer or exchange, and new certificates thereupon shall be
issued in the name of the designated transferee or transferees, upon surrender
of the old certificate in form deemed by the Paying Agent properly endorsed
for transfer with (a) all necessary endorsers' signatures guaranteed in such
manner and form as the Paying Agent may require by a guarantor reasonably
believed by the Paying Agent to be responsible, (b) such assurances as the
Paying Agent shall deem necessary or appropriate to evidence the genuineness
and effectiveness of each necessary endorsement and (c) satisfactory evidence
of compliance with all applicable laws relating to the collection of taxes in
connection with any registration of transfer or exchange or funds necessary
for the payment of such taxes.
4.3. Removal of Legend.
-----------------
Any request for removal of a legend indicating a restriction on
transfer from a certificate evidencing shares of AMPS shall be accompanied by
an opinion of counsel stating that such legend may be removed and such shares
may be transferred free of the restriction described in such legend, said
opinion to be delivered under cover of a letter from a Company Officer
authorizing the Paying Agent to remove the legend on the basis of said
opinion.
4.4. Lost, Stolen or Destroyed Stock Certificates.
--------------------------------------------
The Paying Agent shall issue and register replacement certificates
for certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Company
and by the Paying Agent, subject at all times to provisions of law, the
By-Laws of the Company governing such matters and resolutions adopted by the
Company with respect to lost, stolen or destroyed securities. The Paying Agent
may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Company to the Paying Agent to
issue a replacement or new certificate pursuant to this Section 4.4 shall be
deemed to be a representation and warranty by the Company to the Paying Agent
that such issuance will comply with provisions of applicable law and the
By-Laws and resolutions of the Company.
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4.5. Disposition of Canceled Certificates; Record Retention.
------------------------------------------------------
The Paying Agent shall retain stock certificates which have been
canceled in transfer or in exchange and accompanying documentation in
accordance with applicable rules and regulations of the Securities and
Exchange Commission for two calendar years from the date of such cancellation.
The Paying Agent, upon written request by the Company, shall afford to the
Company, its agents and counsel access at reasonable times during normal
business hours to review and make extracts or copies (at the Company's sole
cost and expense) of such certificates and accompanying documentation. Upon
request by the Company at any time during this two-year period, the Paying
Agent shall deliver to the Company the canceled certificates and accompanying
documentation. The Company, at its expense, shall retain such records for a
minimum additional period of four calendar years from the date of delivery of
the records to the Company and shall make such records available during this
period at any time, or from time to time, for reasonable periodic, special, or
other examinations by representatives of the Securities and Exchange
Commission. The Company also shall undertake to furnish to the Securities and
Exchange Commission, upon demand, either at their principal office or at any
regional office, complete, correct and current hard copies of any and all such
records.
4.6. Stock Register.
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The Paying Agent shall maintain the stock register, which shall
contain a list of the Holders, the number of shares held by each Holder and
the address of each Holder. The Paying Agent shall record in the stock
register any change of address of a Holder upon notice by such Holder. In case
of any written request or demand for the inspection of the stock register or
any other books of the Company in the possession of the Paying Agent, the
Paying Agent will notify the Company and secure instructions as to permitting
or refusing such inspection; provided, however, that the Auction Agent
reserves the right and is authorized to permit such inspection if (i) it is
ordered to do so by a court of competent jurisdiction or a regulatory body,
judicial or quasi-judicial agency or authority having the authority to compel
such disclosure, (ii) it is advised by its counsel that its failure to do so
would be unlawful or (iii) failure to do so would expose the Auction Agent to
loss, liability, claim, damage or expense for which it has not received
indemnity or security satisfactory to it.
4.7. Return of Funds.
---------------
Any funds deposited with the Paying Agent by the Company for any
reason under this Agreement, including for the payment of dividends or the
redemption of shares of AMPS, that remain with the Paying Agent after 12
months shall be repaid to the Company upon written request by the Company.
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V. REPRESENTATIONS AND WARRANTIES.
------------------------------
5.1. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to the Auction Agent that:
(i) the Company is duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Maryland, and has full power to execute and
deliver this Agreement and to authorize, create and issue
the shares of AMPS;
(ii) the Company is registered with the Securities
and Exchange Commission under the Investment Company Act of
1940, as amended, as a closed-end, diversified, management
investment company;
(iii) this Agreement has been duly and validly
authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, subject as to such enforceability to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equitable principles;
(iv) the forms of the certificate evidencing the
shares of AMPS comply with all applicable laws of the State
of Maryland;
(v) the shares of AMPS have been duly and validly
authorized by the Company and, upon completion of the
initial sale of the shares of AMPS and receipt of payment
therefor, will be validly issued, fully paid and
nonassessable;
(vi) at the time of the offering of the shares of
AMPS, the shares offered will be registered under the
Securities Act of 1933, as amended, and no further action by
or before any governmental body or authority of the United
States or of any state thereof is required in connection
with the execution and delivery of this Agreement or will be
required in connection with the issuance of the shares of
AMPS, except such action as required by applicable state
securities or insurance laws, all of which action will have
been taken;
(vii) the execution and delivery of this Agreement
and the issuance and delivery of the shares of AMPS do not
and will not conflict with, violate, or result in a breach
of, the terms, conditions or provisions of, or constitute a
default under, the Charter or the By-Laws of the Company,
any law or regulation applicable to the Company, any order
or decree of any court or public authority having
jurisdiction over the Company, or any mortgage, indenture,
contract, agreement or undertaking to which the Company is a
party or by which it is bound; and
(viii) no taxes are payable upon or in respect of
the execution of this Agreement or will be payable upon or
in respect of the issuance of the shares of AMPS.
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5.2. Representations and Warranties of the Auction Agent.
---------------------------------------------------
The Auction Agent represents and warrants to the Company that the
Auction Agent is duly organized and is validly existing as a banking
corporation in good standing under the laws of the State of New York, and has
the corporate power to enter into and perform its obligations under this
Agreement.
VI. THE AUCTION AGENT.
-----------------
6.1. Duties and Responsibilities.
---------------------------
(a) The Auction Agent is acting solely as agent for the
Company hereunder and owes no fiduciary duties to any Person
except as specifically provided by this Agreement. The
Auction Agent owes no duties to any person other than the
Company by reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are set forth specifically in this
Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Auction Agent.
(c) In the absence of willful misconduct or negligence on
its part, the Auction Agent shall not be liable for any
action taken, suffered or omitted by it or for any error of
judgment made by it in the performance of its duties under
this Agreement. The Auction Agent shall not be liable for
any error of judgment made in the absence of willful
misconduct unless the Auction Agent shall have been
negligent in ascertaining (or failing to ascertain) the
pertinent facts.
(d) The Auction Agent shall not be responsible or liable for
any failure or delay in the performance of its obligations
under this Agreement arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes;
fires, floods; wars; civil or military disturbances;
sabotage; acts of war or terrorism; epidemics; riots;
interruptions, loss or malfunctions of utilities; computer
(hardware or software) or communications services;
accidents; labor disputes (including, without limitation,
strikes or work stoppages); acts of civil or military
authority or governmental actions; it being understood that
the Auction Agent shall use reasonable efforts which are
consistent with accepted practices in the banking industry
to resume performance as soon as practicable under the
circumstances. In no event shall the Auction Agent be
responsible or liable for special, indirect or consequential
loss or damage of any kind whatsoever (including, but not
limited to, loss of profit), even if the Auction Agent has
been advised of the likelihood of such loss or damage and
regardless of the form of action.
6.2. Rights of the Auction Agent.
---------------------------
(a) The Auction Agent may conclusively rely upon, and shall
be protected in acting or refraining from acting upon, any
communication authorized hereby and
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any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other
instrument, paper or document reasonably believed by it to
be genuine. The Auction Agent shall not be liable for acting
upon any telephone communication or by other electronic
means acceptable to the parties authorized hereby which the
Auction Agent believes in good faith to have been given by
the Company or by a Broker-Dealer. The Auction Agent may
record telephone communications with the Company or with the
Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its
choice, and the written advice of such counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become
exposed to financial liability in the performance of its
duties hereunder. The Auction Agent shall be under no
liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
(d) The Auction Agent may perform its duties and exercise
its rights hereunder either directly or by or through agents
or attorneys.
(e) The Auction Agent shall have no obligation or liability
with respect to the registration or exemption therefrom of
the AMPS under the federal or state securities laws or with
respect to the sufficiency or the conformity of any transfer
of the AMPS to the terms of the Auction Agreement, the
Broker-Dealer Agreements, the AMPS or any other document
contemplated thereby.
6.3. Auction Agent's Disclaimer.
--------------------------
The Auction Agent makes no representation as to the validity or the
adequacy of this Agreement, the Broker-Dealer Agreements or the AMPS.
6.4. Compensation, Expenses and Indemnification.
------------------------------------------
(a) The Company shall pay to the Auction Agent reasonable
compensation for all services rendered by it under this
Agreement and under the Broker-Dealer Agreements as shall be
agreed by the Auction Agent and the Company from time to
time as shall be set forth in a separate writing signed by
the Company and the Auction Agent, subject to adjustments if
the AMPS no longer are held of record by the Securities
Depository or its nominee or if there shall be such other
change as shall increase materially the Auction Agent's
obligations hereunder or under the Broker-Dealer Agreements.
(b) The Company shall reimburse the Auction Agent upon its
request for all reasonable expenses, disbursements and
advances incurred or made by the Auction Agent in accordance
with any provision of this Agreement and of the
Broker-Dealer Agreements (including the reasonable
compensation, expenses and
15
disbursements of its agents and counsel), except any
expense, disbursement or advance attributable to its
negligence or willful misconduct.
(c) The Company shall indemnify the Auction Agent, for, and
hold it harmless against, any loss, liability or expense
incurred without negligence or willful misconduct on its
part arising out of or in connection with its agency under
this Agreement and under the Broker-Dealer Agreements,
including the costs and expenses of defending itself against
any claim of liability in connection with its exercise or
performance of any of its duties hereunder and thereunder,
except such as may result from its negligence or willful
misconduct.
VII. MISCELLANEOUS.
--------------
7.1. Term of Agreement.
-----------------
(a) The term of this Agreement is unlimited unless it shall
be terminated as provided in this Section 7.1. The Company
may terminate this Agreement at any time by so notifying the
Auction Agent, provided that if any AMPS remain outstanding
the Company shall have entered into an agreement in
substantially the form of this Agreement with a successor
auction agent. The Auction Agent may terminate this
Agreement upon prior notice to the Company on the date
specified in such notice, which date shall be no earlier
than 60 days after delivery of such notice. If the Auction
Agent resigns while any shares of AMPS remain outstanding,
the Company shall use its best efforts to enter into an
agreement with a successor auction agent containing
substantially the same terms and conditions as this
Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Company and the Auction
Agent under this Agreement shall cease upon termination of
this Agreement. The Company's representations, warranties,
covenants and obligations to the Auction Agent under
Sections 5 and 6.4 hereof shall survive the termination
hereof. Upon termination of this Agreement, the Auction
Agent shall (i) resign as Auction Agent under the
Broker-Dealer Agreements, (ii) at the Company's request,
deliver promptly to the Company copies of all books and
records maintained by it in connection with its duties
hereunder, and (iii) at the request of the Company, transfer
promptly to the Company or to any successor auction agent
any funds deposited by the Company with the Auction Agent
(whether in its capacity as Auction Agent or as Paying
Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance
with this Agreement.
(c) If the AMPS shall no longer settle through an electronic
book entry system, the Auction Agent (but not necessarily
the Paying Agent) shall cease to perform its duties
hereunder, and under any Broker-Dealer Agreement.
7.2. Communications.
---------------
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Except for (i) communications authorized to be made by telephone (or
by other electronic means acceptable to the parties) pursuant to this
Agreement or the Auction Procedures and (ii) communications in connection with
Auctions (other than those expressly required to be in writing), all notices,
requests and other communications to any party hereunder shall be in writing
(including telecopy or similar writing) and shall be given to such party at
its address or telecopier number set forth below:
If to the Company, MUNIHOLDINGS FUND, 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 The Bank of New York
Agent, addressed to: Corporate Trust-Dealing and Trading Group
000 Xxxxxxx Xxxxxx, 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Desk
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 delivered at the address specified
herein. Communications shall be given on behalf of the Company by a Company
Officer and on behalf of the Auction Agent by an Authorized Officer.
7.3. Entire Agreement.
-----------------
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or
inferred, between the parties relating to the subject matter hereof, except
for agreements relating to the compensation of the Auction Agent.
7.4. Benefits.
---------
Nothing herein, express or implied, shall give to any Person, other
than the Company, the Auction Agent and their respective successors and
assigns, any benefit of any legal or equitable right, remedy or claim
hereunder.
7.5. Amendment; Waiver.
------------------
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole
or in part, except by a written instrument signed by a duly
authorized representative of the party to be charged. The
Company shall notify the Auction Agent of any change in the
Articles
17
Supplementary prior to the effective date of any
such change. If any such change in the Articles
Supplementary materially increases the Auction Agent's
obligations hereunder, the Company shall obtain the written
consent to the Auction Agent prior to the effective date of
such change.
(b) Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the
other party shall not constitute a waiver of any such right
or remedy with respect to any subsequent breach.
7.6. Successors and Assigns.
-----------------------
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of the
Company and the Auction Agent. This Agreement may not be assigned by either
party hereto absent the prior written consent of the other party, which
consent shall not be withheld unreasonably.
7.7. Severability.
-------------
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8. Execution in Counterparts.
--------------------------
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
7.9. Governing Law.
--------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the date first above written.
MUNIHOLDINGS FUND, INC.
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-----------------------------------
Name:
Title:
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