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EXHIBIT (k)(2)
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AUCTION AGENT AGREEMENT
between
MUNIHOLDINGS FLORIDA INSURED FUND V
and
IBJ WHITEHALL BANK & TRUST COMPANY
Dated as of __________ __, 1999
Relating to
AUCTION MARKET PREFERRED SHARES
("AMPS"(R)),
Series A and B
of
MUNIHOLDINGS FLORIDA INSURED FUND V
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(R) Registered trademark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
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THIS AUCTION AGENT AGREEMENT, dated as of ___________ __, 1999, is
between MUNIHOLDINGS FLORIDA INSURED FUND V, a Massachusetts business trust (the
"Fund"), and IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking corporation.
The Fund proposes to duly authorize and issue _____ Auction Market
Preferred Shares(R), Series A ("Series A AMPS"), and _____ Auction Market
Preferred Shares(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 Fund's Certificate of Designation (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 Fund desires that IBJ Whitehall Bank & Trust Company perform
certain duties as agent in connection with each Auction of AMPS (in such
capacity, the "Auction Agent"), and as the transfer agent, registrar, dividend
disbursing agent and redemption agent with respect to the AMPS (in such
capacity, the "Paying Agent"), upon the terms and conditions of this Agreement,
and the Fund hereby appoints IBJ Whitehall Bank & Trust Company as said Auction
Agent and Paying Agent in accordance with those terms and conditions
(hereinafter generally referred to as the "Auction Agent", except in Sections 3
and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1. Terms Defined by Reference to
Certificate of Designation.
Capitalized terms not defined herein shall have the respective meanings
specified in the Certificate of Designation.
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 ▇▇▇▇ ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, made known to the Auction
Agent to be controlled by, in control of, or under common control with,
the Fund 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) "Auction" shall have the meaning specified in Section 2.1
hereof.
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(R) Registered trademark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
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(d) "Auction Procedures" shall mean the Auction Procedures
that are set forth in Paragraph 10 of the Certificate of Designation.
(e) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Fund 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 Fund.
(f) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
(g) "Certificate of Designation" shall mean the Certificate of
Designation of the Fund, establishing the powers, preferences and
rights of the AMPS, filed on February 17, 1999 in the Office of the
Secretary of The Commonwealth of Massachusetts.
(h) "Fund 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 Fund and every other officer or
employee of the Fund designated as a "Fund Officer" for purposes hereof
in a notice from the Fund to the Auction Agent.
(i) "Holder" shall be a holder of record of one or more AMPS,
listed as such in the share 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.
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II. THE AUCTION.
2.1. Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures.
(a) The Certificate of Designation provides 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 Fund advises results from
implementation of the Auction Procedures. The Board of Trustees of the
Fund has adopted a resolution appointing IBJ Whitehall Bank & Trust
Company as Auction Agent for purposes of the Auction Procedures. The
Auction Agent hereby accepts such appointment and agrees that, on each
Auction Date, it shall follow the procedures set forth in this Section
2 and the Auction Procedures for the purpose of determining the
Applicable Rate for the AMPS for the next Dividend Period therefor.
Each periodic operation of such procedures is hereinafter referred to
as an "Auction."
(b) All of the provisions contained in the Auction Procedures
and in the Settlement Procedures are incorporated herein by reference
in their entirety and shall be deemed to be a part hereof to the same
extent as if such provisions were set forth fully herein.
2.2. Preparation for Each Auction; Maintenance
of Registry of Existing Holders.
(a) Pursuant to Section 2.5 hereof, the Fund 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 Fund 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 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 Fund 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 Fund 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
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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 Certificate of
Designation concerning Special Dividend Periods and the notification of a
Special Dividend Period will be followed by the Fund and, to the extent
applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
(d) Except as otherwise provided in paragraph 2(f) of the Certificate
of Designation, whenever the Fund intends to include any net capital gains or
other income subject to regular Federal income tax in any dividend on AMPS, the
Fund 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 Fund, 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 Fund includes any additional amounts in a dividend as provided in paragraph
2(f)of the Certificate of Designation, the Fund 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 Fund, 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.
(i) If the Fund makes a Retroactive Taxable Allocation, the Fund,
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 share books of the Fund. The Fund, within 30 days after such
notice is given to the Auction Agent, will pay to the Auction Agent (who then
will distribute to such Holders), out of funds legally available therefor, a
cash amount equal to the aggregate Additional Dividend with respect to all
Retroactive Taxable Allocations made to such Holders during the fiscal year in
question.
(e) On each Auction Date, the Auction Agent shall determine the
Reference Rate and the Maximum Applicable Rate. If the Reference Rate is not
quoted on an interest basis but is quoted on a discount basis, the Auction Agent
shall convert the quoted rate to an Interest Equivalent, as set forth in
paragraph 1 of the Certificate of Designation; 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
Fund as to the method of such conversion. Not later than 9:30 A.M. on each
Auction Date, the Auction Agent shall notify the Fund and the Broker-Dealers of
the Reference Rate so determined and of the Maximum Applicable Rate.
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(i) If the Reference Rate is the applicable "AA" Composite Commercial
Paper Rate and such rate is to be based on rates supplied by Commercial Paper
Dealers and one or more of the Commercial Paper Dealers shall not provide a
quotation for the determination of the applicable "AA" Composite Commercial
Paper Rate, the Auction Agent immediately shall notify the Fund so that the Fund
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
Fund promptly shall advise the Auction Agent of any such selection. If the Fund
does not select any such Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers, then the rates shall be supplied by the remaining
Commercial Paper Dealer or Commercial Paper Dealers.
(ii) If, after the date of this Agreement, there is any change in the
prevailing rating of AMPS by either of the rating agencies (or substitute or
successor rating agencies) referred to in the definition of the Maximum
Applicable Rate, thereby resulting in any change in the corresponding applicable
percentage for the AMPS, as set forth in said definition (the "Percentage"), the
Fund 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 Certificate of Designation. The Auction Agent shall
be entitled to rely on the last Percentage of which it has received notice from
the Fund (or, in the absence of such notice, the Percentage set forth in the
preceding sentence) in determining the Maximum Applicable Rate as set forth in
Section 2.2(e)(i) hereof.
(f) The Auction Agent shall maintain a current registry of the Existing
Holders of the shares of each series of AMPS for purposes of each Auction. The
Fund shall use its best efforts to provide or cause to be provided to the
Auction Agent within ten Business Days following the date of the Closing a list
of the initial Existing Holders of each series of AMPS, and the Broker-Dealer of
each such Existing Holder through which such Existing Holder purchased such
shares. The Auction Agent may rely upon, as evidence of the identities of the
Existing Holders, such list, the results of each Auction and notices from any
Existing Holder, the Agent Member of any Existing Holder or the Broker-Dealer of
any Existing Holder with respect to such Existing Holder's transfer of any AMPS
to another Person.
(i) In the event of any partial redemption of any series of AMPS, upon
notice by the Fund 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 Fund,
provided that
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the Auction Agent has been furnished with the name and telephone number
of a person or department at such Agent Member from which it is to
request such information. In the absence of receiving any such
information with respect to an Existing Holder, from such Existing
Holder's Agent Member or otherwise, the Auction Agent may continue to
treat such Existing Holder as having ownership of the number of shares
of the series of AMPS shown in the Auction Agent's registry of Existing
Holders.
(ii) The Auction Agent shall register a transfer of the
ownership of shares of a series of AMPS from an Existing Holder to
another Existing Holder, or to another Person if permitted by the Fund,
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 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 AMPS and the seller
failed to deliver such shares or (ii) sold any AMPS and the purchaser
failed to make payment to such Person upon delivery to the purchaser of
such shares.
(g) The Auction Agent may request that the Broker-Dealers, as
set forth in Section 3.2(c) of the Broker-Dealer Agreements, provide
the Auction Agent with a list of their respective customers that such
Broker-Dealers believe are Beneficial Owners of 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 Fund, 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 Fund, which consent shall not be withheld unreasonably. The
Auction Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective.
Time Event
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By 9:30 A.M. Auction Agent advises the Fund and the Broker-Dealers of the
Reference Rate and the Maximum Applicable Rate as set forth
in Section 2.2(e)(i).
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9:30 A.M. - 1:00 P.M. Auction Agent assembles information communicated to it by
Broker-Dealers as provided in Paragraph 10(c)(1) of the
Certificate of Designation. Submission deadline is 1:00 P.M.
Not earlier than Auction Agent makes determinations pursuant to
1:00 P.M. Paragraph 10(d)(i) of the Certificate of Designation.
By approximately Auction Agent advises the Fund of the results of the
3:00 P.M. Auction as provided in Paragraph 10(d)(ii) of the
Certificate of Designation.
Submitted Bids and Submitted Sell Orders are accepted
and rejected in whole or in part and AMPS are allocated
as provided in Paragraph 10(e) of the Certificate of
Designation.
Auction Agent gives notice of the Auction results as
set forth in Section 2.4 hereof.
2.4. Notice of Auction Results.
On each Auction Date, the Auction Agent shall notify Broker-Dealers of
the results of the Auction held on such date by telephone or through the Auction
Agent's Auction Processing System as set forth in Paragraph (a) of the
Settlement Procedures.
2.5. Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date, the Fund
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 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 Fund
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 Fund any remaining funds paid to the Auction Agent pursuant to
this Section 2.5(a).
(b) The Fund 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 Fund may
designate an Affiliate or ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated to act as a Broker-Dealer.
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(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Fund.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from
time to time shall enter into such Broker-Dealer Agreements as the Fund
shall request.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6. Ownership of AMPS and Submission of Bids
by the Fund and its Affiliates.
Neither the Fund nor any Affiliate of the Fund may submit any Sell
Order or Bid, directly or indirectly, in any Auction, except that an Affiliate
of the Fund that is a Broker-Dealer may submit a Sell Order or Bid on behalf of
a Beneficial Owner or a Potential Beneficial Owner. The Fund shall notify the
Auction Agent if the Fund or, to the best of the Fund's knowledge, any Affiliate
of the Fund becomes a Beneficial Owner of any AMPS. Any AMPS redeemed, purchased
or otherwise acquired (i) by the Fund 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 Fund). The
Auction Agent shall have no duty or liability with respect to enforcement of
this Section 2.6.
2.7. Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Fund, its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund'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 Fund 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 Fund 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 Fund 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 Fund 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 Fund. Any
such agent, accountant or counsel, before having access to such information,
shall agree to keep such information confidential and not to disclose such
information or permit disclosure of such information without the prior written
consent of the applicable Broker-Dealer, provided that such agent, accountant or
counsel may reserve the right to disclose any such information if it is advised
by its counsel that its failure to do so would (i) be unlawful or (ii) expose it
to liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel.
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III. THE AUCTION AGENT AS PAYING AGENT.
3.1. The Paying Agent.
The Board of Trustees of the Fund has adopted a resolution appointing
IBJ Whitehall Bank & Trust Company as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Fund in connection with any 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 Certificate of Designation which are specified herein with
respect to the AMPS and as set forth in this Section 3.
3.2. The Fund's Notices to the Paying Agent.
Whenever any AMPS are to be redeemed, the Fund promptly shall deliver
to the Paying Agent a Notice of Redemption, which will be mailed by the Fund to
each Holder at least five Business Days prior to the date such Notice of
Redemption is required to be mailed pursuant to the Certificate of Designation.
The Paying Agent shall have no responsibility to confirm or verify the accuracy
of any such Notice.
3.3. The Fund to Provide Funds for Dividends,
Redemptions and Additional Dividends.
(a) Not later than noon on each Dividend Payment Date, the
Fund 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 Fund shall give a Notice of Redemption, then by
noon of the date fixed for redemption, the Fund shall deposit in trust
with the Paying Agent an aggregate amount of Federal Funds or similar
same-day funds sufficient to redeem such AMPS called for redemption and
shall give the Paying Agent irrevocable instructions and authority to
pay the redemption price to the Holders of AMPS called for redemption
upon surrender of the certificate or certificates therefor.
(c) If the Fund provides notice to the Auction Agent of a
Retroactive Taxable Allocation, the Fund, 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 Fund 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
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on the AMPS, (ii) on any date fixed for redemption, the redemption price of any
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 Fund as set forth in Paragraph 2 of the Certificate of Designation. The
redemption price to be paid by the Paying Agent to the Holders of any AMPS
called for redemption will be determined as set forth in Paragraph 4 of the
Certificate of Designation. 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 Fund pursuant to paragraph 2(e) of the Certificate of
Designation. The Fund shall notify the Paying Agent in writing of a decision to
redeem any AMPS on or prior to the date specified in Section 3.2 above, and such
notice by the Fund to the Paying Agent shall contain the information required to
be stated in a Notice of Redemption required to be mailed by the Fund to such
Holders. The Paying Agent shall have no duty to determine the redemption price
and may rely on the amount thereof set forth in a Notice of Redemption.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1. Original Issue of Share Certificates.
On the Date of Original Issue for any AMPS, one certificate for each
series of AMPS shall be issued by the Fund and registered in the name of Cede &
Co., as nominee of the Securities Depository, and countersigned by the Paying
Agent. The Fund 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 Fund 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 Fund'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 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.
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4.3. Removal of Legend.
Any request for removal of a legend indicating a restriction on
transfer from a certificate evidencing 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 Fund Officer authorizing the Paying
Agent to remove the legend on the basis of said opinion.
4.4. Lost, Stolen or Destroyed Share 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 Fund and
by the Paying Agent, subject at all times to provisions of law, the By-Laws of
the Fund governing such matters and resolutions adopted by the Fund 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 Fund 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 Fund to the Paying Agent that such issuance
will comply with provisions of applicable law and the By-Laws and resolutions of
the Fund.
4.5. Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share 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 Fund, shall afford to the Fund, its agents and
counsel access at reasonable times during normal business hours to review and
make extracts or copies (at the Fund's sole cost and expense) of such
certificates and accompanying documentation. Upon request by the Fund at any
time after the expiration of this two-year period, the Paying Agent shall
deliver to the Fund the canceled certificates and accompanying documentation.
The Fund, 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
Fund 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 Fund 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 Fund 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. Share Register.
The Paying Agent shall maintain the share 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 share 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 share register or any
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other books of the Fund in the possession of the Paying Agent, the Paying Agent
will notify the Fund and secure instructions as to permitting or refusing such
inspection. The Paying Agent reserves the right, however, to exhibit the share
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 Fund shall have offered indemnification satisfactory to the Paying
Agent.
4.7. Return of Funds.
Any funds deposited with the Paying Agent by the Fund 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 Fund upon written request by the Fund.
V. REPRESENTATIONS AND WARRANTIES.
5.1. Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(i) the Fund is duly organized and is validly existing as a
voluntary association (commonly referred to as a business trust) in
good standing under the laws of the Commonwealth of Massachusetts, and
has full power to execute and deliver this Agreement and to authorize,
create and issue the AMPS;
(ii) the Fund 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 Fund and constitutes the legal, valid and
binding obligation of the Fund, enforceable against the Fund 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 Commonwealth
of Massachusetts;
(v) the shares of each series of AMPS have been duly and
validly authorized by the Fund 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 AMPS, except such action as required by applicable state securities
or insurance laws, all of which action will have been taken;
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(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
Declaration of Trust or the By-Laws of the Fund, any law or regulation
applicable to the Fund, any order or decree of any court or public
authority having jurisdiction over the Fund, or any mortgage,
indenture, contract, agreement or undertaking to which the Fund 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 Fund 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 Fund
hereunder and owes no fiduciary duties to any Person except as provided
by this Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are set forth specifically in this Agreement, and
no implied covenants or obligations shall be read into this Agreement
against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or
omitted by it or for any error of judgment made by it in the
performance of its duties under this Agreement. The Auction Agent shall
not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining (or failing to
ascertain) the pertinent facts.
6.2. Rights of the Auction Agent.
(a) The Auction Agent may rely upon, and shall be protected in
acting or refraining from acting upon, any communication authorized
hereby and any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument,
paper or document reasonably believed by it to be genuine. The Auction
Agent shall not be liable for acting upon any telephone communication
authorized hereby which the Auction Agent believes in good faith to
have been given by the Fund or by a Broker-Dealer. The Auction Agent
may record telephone communications with the Fund or with the
Broker-Dealers or with both.
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(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 Fund.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys.
6.3. Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or the
adequacy of this Agreement, the Broker-Dealer Agreements or the AMPS.
6.4. Compensation, Expenses and Indemnification.
(a) The Fund 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 Fund 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 Fund 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 Fund 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 Fund may terminate this
Agreement at any time by so
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notifying the Auction Agent, provided that if any AMPS remain
outstanding the Fund 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 Fund 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 AMPS remain outstanding, the Fund 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 Fund and the Auction Agent under
this Agreement shall cease upon termination of this Agreement. The
Fund'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 Fund's request, deliver promptly to the Fund
copies of all books and records maintained by it in connection with its
duties hereunder, and (iii) at the request of the Fund, transfer
promptly to the Fund or to any successor auction agent any funds
deposited by the Fund 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 Fund, MuniHoldings Florida Insured Fund V
addressed to: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction IBJ Whitehall Bank & Trust Company
Agent, addressed to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Auction Window
Subcellar 1
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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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 Fund by a Fund 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 Fund, 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 Fund shall notify the
Auction Agent of any change in the Certificate of Designation prior to
the effective date of any such change. If any such change in the
Certificate of Designation materially increases the Auction Agent's
obligations hereunder, the Fund 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
Fund 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.
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7.8. Liability of Shareholders, Trustees and Officers.
This agreement is executed by and on behalf of the trustees of the Fund
solely in their capacity as such trustees, and shall not constitute their
personal obligation, either jointly or severally, in their individual
capacities. No trustee, officer or shareholder of the Fund shall be liable for
any obligations of the Fund under this instrument and the Fund shall be solely
liable therefor; all parties hereto shall look solely to the fund estate for the
payment of any claim, or the performance of any obligation, hereunder.
7.9. 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.
7.10. 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 FLORIDA INSURED FUND V
By:
---------------------------------
Title:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
---------------------------------
Title:
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