EXHIBIT (K)(2)
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AUCTION AGENT AGREEMENT
between
MUNIHOLDINGS NEW YORK FUND, INC.
and
IBJ XXXXXXXX BANK & TRUST COMPANY
Dated as of _____________, 1998
Relating to
AUCTION MARKET PREFERRED STOCK(R)
("AMPS"(R)),
Series A and B
of
MUNIHOLDINGS NEW YORK FUND, INC.
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(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
THIS AUCTION AGENT AGREEMENT, dated as of __________, 1998, is between
MUNIHOLDINGS NEW YORK FUND, INC., a Maryland corporation (the "Company"), and
IBJ XXXXXXXX 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 Xxxxxxxx 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 Xxxxxxxx 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.
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1.1. Terms Defined by Reference to
Articles Supplementary.
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Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.
______________________
(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
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 _________, 1998 with the State Department of Assessments and
Taxation 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.
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(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.
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.
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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 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 Xxxxxxxx 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."
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(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.
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(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-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.
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(d)(i) 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-
Dealer, who, on or prior to the applicable Dividend Payment Date, in
accordance with its Broker-Dealer Agreement, will notify its Beneficial
Owners.
(ii) 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)(i) 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-
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Dealers of the Reference Rate so determined and of the Maximum Applicable
Rate.
(ii) 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.
(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 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 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)(i) 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
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with respect to such Existing Holder's transfer of any shares of AMPS to
another Person.
(ii) 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.
(iii) 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 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.
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(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
---- -----
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.
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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 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.
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(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.
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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
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
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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.
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The Board of Directors of the Company has adopted a resolution appointing
IBJ Xxxxxxxx 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.
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
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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 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.
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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.
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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
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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.
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;
15
(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 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
16
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.
(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.
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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 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.
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(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 New York 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 IBJ Xxxxxxxx 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 delivered at the address specified herein.
Communications shall be given on behalf of the Company by a
19
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
20
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.
21
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 NEW YORK FUND, INC.
By: _______________________________
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY
By: _______________________________
Title:
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