Exhibit 7(a)
6,700,000 Shares
MuniAssets Fund, Inc.
(a Maryland corporation)
Common Stock
(Par Value $0.10 Per Share)
PURCHASE AGREEMENT
June ___, 1993
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Xxxxxxx Xxxxx World Headquarters
World Financial Center
Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
MuniAssets Fund, Inc., a Maryland corporation (the "Fund"), and Fund Asset
Management, Inc., a Delaware corporation (the "Adviser"), each confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (the "Underwriter"), with respect to the sale by the Fund and the
purchase by the Underwriter of 6,700,000 shares of common stock, par value $.10
per share, of the Fund (the "Common Stock") and, with respect to the grant by
the Fund to the Underwriter of the option described in Section 2 hereof to
purchase all or any part of 1,005,000 additional shares of Common Stock to cover
over-allotments. The aforesaid 6,700,000 shares (the "Initial Shares"), together
with all or any part of the 1,005,000 additional shares of Common Stock subject
to the option described in Section 2 hereof (the "Option Shares"), are
collectively hereinafter called the "Shares."
Prior to the purchase and public offering of the Shares by the
Underwriter, the Fund and the Underwriter shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Fund and the Underwriter and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Shares will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 33-61150) and a related
preliminary prospectus for the registration of the Shares under the Securities
Act of 1933, as amended (the "1933 Act"), and a notification on Form N-8A of
registration of the Fund as an investment company under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations of the
Commission under the 1940 Act (together with the rules and regulations under the
1933 Act, the "Rules and Regulations") and has filed such amendments to such
registration statement on Form N-2, if any, and such amended preliminary
prospectuses as may have been required to the date hereof. The Fund will prepare
and file such additional amendments thereto and such amended prospectuses as may
hereafter be required. Such registration statement (as amended, if applicable)
and the prospectus constituting a part thereof (including in each case the
information, if any, deemed to be part thereof pursuant to Rule 430A(b) of the
Rules and Regulations), as from time to time amended or supplemented pursuant to
the 1933 Act, are hereinafter referred to as the "Registration Statement" and
the "Prospectus," respectively, except that if any revised prospectus shall be
provided to the Underwriter by the Fund for use in connection with the offering
of the Shares which differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective (whether such revised
prospectus is required to be filed by the Fund pursuant to Rule 497(b) or Rule
497(h) of the Rules and Regulations), the term "Prospectus" shall refer to each
such revised prospectus from and after the time it is first provided to the
Underwriter for such use.
The Fund understands that the Underwriter proposes to make a public
offering of the Shares as soon as the Underwriter deems advisable after the
Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.
SECTION 1. Representations and Warranties. (a) The Fund and the Adviser
each severally represents and warrants to the Underwriter as of the date hereof
and as of the date of the Pricing Agreement (such later date being hereinafter
referred to as the "Representation Date") as follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement will comply in all
material respects with the requirements of the 1933 Act, the 1940 Act and
the Rules and Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. At the
time the Registration Statement becomes effective, at the Representation
Date and at Closing Time referred to in Section 2, the Prospectus (unless
the term "Prospectus" refers to a prospectus which has been provided to
the Underwriter by the Fund for use in connection with the offering of the
Shares which differs from the
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Prospectus on file with the Commission at the time the Registration
Statement becomes effective, in which case at the time such prospectus is
first provided to the Underwriter for such use) will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Fund in writing by the Underwriter expressly for use in the Registration
Statement or Prospectus.
(ii) The accountants who certified the statement of assets and
liabilities included in the Registration Statement are independent public
accountants as required by the 1933 Act and the Rules and Regulations.
(iii) The statement of assets and liabilities included in the
Registration Statement presents fairly the financial position of the Fund
as at the date indicated and said statement has been prepared in
conformity with generally accepted accounting principles.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, of the Fund, or in the earnings, business affairs
or business prospects of the Fund, whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by
the Fund which are material to the Fund other than those in the ordinary
course of business, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Fund on any class of its capital
stock.
(v) The Fund has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement; the Fund
is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required; and the Fund has no subsidiaries.
(vi) The Fund is registered with the Commission under the 1940 Act
as a closed-end, non-diversified management investment company, and no
order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or threatened by the Commission.
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(vii) The authorized, issued and outstanding capital stock of the
Fund is as set forth in the Prospectus under the caption "Description of
Capital Stock"; the Shares have been duly authorized for issuance and sale
to the Underwriter pursuant to this Agreement and, when issued and
delivered by the Fund pursuant to this Agreement against payment of the
consideration set forth in the Pricing Agreement, will be validly issued
and fully paid and nonassessable; the Shares conform in all material
respects to all statements relating thereto contained in the Registration
Statement; and the issuance of the Shares is not subject to preemptive
rights.
(viii) The Fund is not in violation of its articles of
incorporation, as amended (the "Charter") or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by which it or
its properties may be bound; and the execution and delivery of this
Agreement, the Pricing Agreement and the Investment Advisory Agreement and
the Custodial Agreement referred to in the Registration Statement (as used
herein, the "Advisory Agreement" and the "Custody Agreement,"
respectively) and the consummation of the transactions contemplated herein
and therein have been duly authorized by all necessary corporate action
and will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Fund pursuant to any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Fund is a party or by which it may be bound or to which any of
the property or assets of the Fund is subject, nor will such action result
in any violation of the provisions of the Charter or by-laws, as amended,
of the Fund (the "By-Laws") or, to the best knowledge of the Fund and the
Adviser, any law, administrative regulation or administrative or court
decree; and no consent, approval, authorization or order of any court or
governmental authority or agency is required for the consummation by the
Fund of the transactions contemplated by this Agreement, the Pricing
Agreement, the Advisory Agreement and the Custody Agreement, except such
as has been obtained under the 1940 Act or as may be required under the
1933 Act, state securities or Blue Sky laws or foreign securities laws in
connection with the purchase and distribution of the Shares by the
Underwriter.
(ix) The Fund owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and to
operate its properties and to carry on its businesses as contemplated in
the Prospectus.
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(x) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Fund, threatened against or affecting, the Fund, which
might result in any material adverse change in the condition, financial or
otherwise, business affairs or business prospects of the Fund, or might
materially and adversely affect the properties or assets of the Fund; and
there are no material contracts or documents of the Fund which are
required to be filed as exhibits to the Registration Statement by the 1933
Act, the 1940 Act or by the Rules and Regulations which have not been so
filed.
(xi) The Fund owns or possesses, or can acquire on reasonable terms,
adequate trademarks, service marks and trade names necessary to conduct
its business as described in the Registration Statement, and the Fund has
not received any notice of infringement of or conflict with asserted
rights of others with respect to any trademarks, service marks or trade
names which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the conduct
of the business, operations, financial condition or income of the Fund.
(xii) The Shares have been approved for listing on the New York
Stock Exchange upon notice of issuance.
(b) The Adviser represents and warrants to the Underwriter as of the date
hereof and as of the Representation Date as follows:
(i) The Adviser has been duly incorporated as a corporation under
the laws of the State of Delaware with corporate power and authority to
conduct its business as described in the Prospectus.
(ii) The Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
is not prohibited by the Advisers Act or the 1940 Act, or the rules and
regulations under such acts, from acting under the Advisory Agreement for
the Fund as contemplated by the Prospectus.
(iii) This Agreement has been duly authorized, executed and
delivered by the Adviser; the Advisory Agreement has been duly authorized,
executed and delivered by the Adviser and constitutes a valid and binding
obligation of the Adviser, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization or
other laws relating to or affecting creditors' rights and to general
equity principles; and neither the execution and delivery of this
Agreement, or the Advisory Agreement nor the performance by the Adviser of
its obligations hereunder or thereunder will conflict with, or result in a
breach of any of
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the terms and provisions of, or constitute, with or without the giving of
notice or lapse of time or both, a default under, any agreement or
instrument to which the Adviser is a party or by which it is bound, or any
law, order, rule or regulation applicable to it of any jurisdiction,
court, federal or state regulatory body, administrative agency or other
governmental body, stock exchange or securities association having
jurisdiction over the Adviser or its respective properties or operations.
(iv) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus.
(v) Any advertisement approved by the Adviser for use in the public
offering of the Shares pursuant to Rule 482 under the Rules and
Regulations (an "Omitting Prospectus") complies with the requirements of
such Rule 482.
(c) Any certificate signed by any officer of the Fund or the Adviser and
delivered to the Underwriter shall be deemed a representation and warranty by
the Fund or the Adviser, as the case may be, to the Underwriter, as to the
matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriter; Closing. On the basis of
the representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Fund agrees to sell the Initial Shares to the
Underwriter, and the Underwriter agrees to purchase the Initial Shares from the
Fund, at the price per share set forth in the Pricing Agreement.
(a) If the Fund has elected not to rely upon Rule 430A under the Rules and
Regulations, the initial public offering prices and the purchase price per share
to be paid by the Underwriter for the Shares has been determined and set forth
in the Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus will be filed before the Registration
Statement becomes effective.
(b) If the Fund has elected to rely upon Rule 430A under the Rules and
Regulations, the purchase price per share to be paid by the Underwriter for the
Shares shall be an amount equal to the applicable initial public offering price,
less an amount per share to be determined by agreement between the Underwriter
and the Fund. The applicable initial public offering price per share shall be a
fixed price based upon the number of Shares purchased in a single transaction to
be determined by agreement between the Underwriter and the Fund. The initial
public offering prices and the purchase price, when so determined, shall be set
forth in the Pricing Agreement. In the event that such prices have not been
agreed upon and the Pricing Agreement has not been executed and delivered by all
parties thereto by the close of business on the fourth business day following
the date of this Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other
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party, except as provided in Section 4, unless otherwise agreed to by the Fund,
the Adviser and the Underwriter.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Fund
hereby grants an option to the Underwriter to purchase all or any part of the
Option Shares at the price per share set forth above. The option hereby granted
will expire 45 days after the date hereof (or, if the Fund has elected to rely
upon Rule 430A under the Rules and Regulations, 45 days after the execution of
the Pricing Agreement) and may be exercised only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Shares upon notice by the Underwriter to the Fund
setting forth the number of Option Shares as to which the Underwriter is then
exercising the option and the time, date and place of payment and delivery for
such Option Shares. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Underwriter but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to
Closing Time, as hereinafter defined, unless otherwise agreed upon by the
Underwriter and the Fund.
Payment of the purchase price for, and delivery of certificates for, the
Initial Shares shall be made at the office of Xxxxxx & Xxxxx, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon by the
Underwriter and the Fund, at 10:00 A.M. on the fifth business day following the
date the Registration Statement becomes effective (or, if the Fund has elected
to rely upon Rule 430A under the Rules and Regulations, the fifth business day
after execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Underwriter and the
Fund (such time and date of payment and delivery being herein called "Closing
Time"). In addition, in the event that any or all of the Option Shares are
purchased by the Underwriter, payment of the purchase price for, and delivery of
certificates for, such Option Shares shall be made at the above-mentioned office
of Xxxxxx & Xxxxx, or at such other place as shall be mutually agreed upon by
the Fund and the Underwriter, on each Date of Delivery as specified in the
notice from the Underwriter to the Fund. Payment shall be made to the Fund by
check or checks drawn in New York Clearing House or similar next day funds and
payable to the order of the Fund, against delivery to the Underwriter of
certificates for the Shares to be purchased by it. Certificates for the Initial
Shares and Option Shares shall be in such denominations and registered in such
names as the Underwriter may request in writing at least two business days
before Closing Time or the Date of Delivery, as the case may be. The
certificates for the Initial Shares and the Option Shares will be made available
by the Fund for examination and packaging by the Underwriter not later than
10:00 A.M. on the last business day prior to Closing Time or the Date of
Delivery, as the case may be.
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SECTION 3. Covenants of the Fund. The Fund covenants with the Underwriter
as follows:
(a) The Fund will use its best efforts to cause the Registration Statement
to become effective under the 1933 Act, and will advise the Underwriter promptly
as to the time at which the Registration Statement and any amendments thereto
(including any post-effective amendment) becomes so effective and, if required,
to cause the issuance of any orders exempting the Fund from any provisions of
the 1940 Act and will advise the Underwriter promptly as to the time at which
any such orders are granted.
(b) The Fund will notify the Underwriter immediately, and confirm the
notice in writing, (i) of the effectiveness of the Registration Statement and
any amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
and (v) of the issuance by the Commission of an order of suspension or
revocation of the notification on Form N-8A of registration of the Fund as an
Investment Company under the 1940 Act or the initiation of any proceeding for
that purpose. The Fund will make every reasonable effort to prevent the issuance
of any stop order described in subsection (iv) hereunder or any order of
suspension or revocation described in subsection (v) hereunder and, if any such
stop order or order of suspension or revocation is issued, to obtain the lifting
thereof at the earliest possible moment.
(c) The Fund will give the Underwriter notice of its intention to file any
amendment to the Registration Statement (including any post-effective amendment)
or any amendment or supplement to the Prospectus (including any revised
prospectus which the Fund proposes for use by the Underwriter in connection with
the offering of the Shares, which differs from the prospectus on file at the
Commission at the time the Registration Statement becomes effective, whether
such revised prospectus is required to be filed pursuant to Rule 497(b) or Rule
497(h) of the Rules and Regulations), whether pursuant to the 1940 Act, the 1933
Act, or otherwise, and will furnish the Underwriter with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement to which the Underwriter shall reasonably object.
(d) The Fund will deliver to the Underwriter, as soon as practicable, two
signed copies of the notification of registration and registration statement as
originally filed and of each amendment thereto, in each case with two sets of
the exhibits filed therewith, and will also deliver to the Underwriter a
conformed copy of the registration statement as originally filed and of each
8
amendment thereto (but without exhibits to the registration statement or any
such amendment).
(e) The Fund will furnish to the Underwriter, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act, such
number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the Rules and Regulations.
(f) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriter, to amend or supplement the Prospectus in
order to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Fund will forthwith
amend or supplement the Prospectus by preparing and furnishing to the
Underwriter a reasonable number of copies of an amendment or amendments of or a
supplement or supplements to, the Prospectus (in form and substance satisfactory
to counsel for the Underwriter), so that, as so amended or supplemented, the
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading.
(g) The Fund will endeavor, in cooperation with the Underwriter, to
qualify the Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the Underwriter may
designate, and will maintain such qualifications in effect for a period of not
less than one year after the date hereof. The Fund will file such statements and
reports as may be required by the laws of each jurisdiction in which the Shares
have been qualified as above provided.
(h) The Fund will make generally available to its securityholders as soon
as practicable, but no later than 60 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the Rules and Regulations) covering a twelve-month period beginning not
later than the first day of the Funds's fiscal quarter next following the
"effective" date (as defined in said Rule 158) of the Registration Statement.
(i) Between the date of this Agreement and the termination of any trading
restrictions or Closing Time, whichever is later, the Fund will not, without
your prior consent, offer or sell, or enter into any agreement to sell, any
equity or equity related securities of the Fund other than the Shares and shares
of Common stock issued in reinvestment of dividends or distributions.
(j) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
Rules and Regulations,
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then immediately following the execution of the Pricing Agreement, the Fund will
prepare, and file or transmit for filing with the Commission in accordance with
such Rule 430A and Rule 497(h) of the Rules and Regulations, copies of the
amended Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended Prospectus),
containing all information so omitted.
(k) Trading of the Shares on the New York Stock Exchange will begin no
later than four weeks from the date of the Prospectus.
SECTION 4. Payment of Expenses. The Fund will pay all expenses incidental
to the performance of its obligations under this Agreement, including, but not
limited to, expenses relating to (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the printing
of this Agreement and the Pricing Agreement, (iii) the preparation, issuance and
delivery of the certificates for the Shares to the Underwriter, (iv) the fees
and disbursements of the Fund's counsel and accountants, (v) the qualification
of the Shares under securities laws in accordance with the provisions of Section
3(g) of this Agreement, including filing fees and any reasonable fees or
disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of the blue sky survey, (vi) the printing and
delivery to the Underwriter of copies of the registration statement as
originally filed and of each amendment thereto, of the preliminary prospectus,
and of the Prospectus and any amendments or supplements thereto, (vii) the
printing and delivery to the Underwriter of copies of the blue sky survey,
(viii) the fees and expenses incurred with respect to the filing with the
National Association of Securities Dealers, Inc. and (ix) the fees and expenses
incurred with respect to the listing of the Shares on the New York Stock
Exchange.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 5 or Section 9 (a) (i), the Fund or the Adviser shall
reimburse the Underwriter for all of its reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriter.
In the event the transactions contemplated hereunder are not consummated, the
Adviser agrees to pay all of the costs and expenses set forth in the first
paragraph of this Section 4 which the Fund would have paid if such transactions
were consummated.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Fund and the Adviser herein contained, to the performance by
the Fund and the Adviser of their respective obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 P.M., New York City time, on the date
10
of this Agreement, or at a later time and date not later, however, than 5:30
P.M. on the first business day following the date hereof, or at such later time
and date as may be approved by the Underwriter, and at Closing Time no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Fund has elected to rely upon Rule 430A of the Rules and
Regulations, the prices of the Shares and any price-related information
previously omitted from the effective Registration Statement pursuant to such
Rule 430A shall have been transmitted to the Commission for filing pursuant to
Rule 497(h) of the Rules and Regulations within the prescribed time period, and
prior to Closing Time the Fund shall have provided evidence satisfactory to the
Underwriter of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A of the Rules and Regulations.
(b) At Closing Time, the Underwriter shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxx & Xxxxx,
counsel for the Fund and the Underwriter, to the effect that:
(i) The Fund has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland.
(ii) The Fund has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus.
(iii) The Fund is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required.
(iv) The Shares have been duly authorized for issuance and sale to
the Underwriter pursuant to this Agreement and, when issued and delivered
by the Fund pursuant to this Agreement against payment of the
consideration set forth in the Pricing Agreement, will be validly issued
and fully paid and nonassessable; the issuance of the Shares is not
subject to preemptive rights; and the authorized capital stock conforms as
to legal matters in all material respects to the description thereof in
the Registration Statement under the caption "Description of Capital
Stock."
(v) This Agreement and the Pricing Agreement each have been duly
authorized, executed and delivered by the Fund and each complies with all
applicable provisions of the 1940 Act.
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(vi) The Registration Statement is effective under the 1933 Act and,
to the best of their knowledge and information, no stop order suspending
the effectiveness of the Registration Statement has been issued under the
1933 Act or proceedings therefor initiated or threatened by the
Commission.
(vii) At the time the Registration Statement became effective and at
the Representation Date, the Registration Statement (other than the
financial statements included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the 1940 Act and the Rules and
Regulations.
(viii) To the best of their knowledge and information, there are no
legal or governmental proceedings pending or threatened against the Fund
which are required to be disclosed in the Registration Statement, other
than those disclosed therein.
(ix) To the best of their knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments of the Fund required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto, the
descriptions thereof are correct in all material respects, and no default
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument so described,
referred to or filed.
(x) No consent, approval, authorization or order of any court or
governmental authority or agency is required in connection with the sale
of the Shares to the Underwriter, except such as has been obtained under
the 1933 Act, the 1940 Act or the Rules and Regulations or such as may be
required under state or foreign securities laws; and to the best of their
knowledge and information, the execution and delivery of this Agreement,
the Pricing Agreement, the Advisory Agreement and the Custody Agreement
and the consummation of the transactions contemplated herein and therein
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Fund pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Fund is a party or by which it may be bound or to which any of
the property or assets of the Fund is subject, nor will such action result
in any violation of the provisions of the Charter or By-Laws of the Fund,
or any law or administrative
12
regulation, or, to the best of their knowledge and information,
administrative or court decree.
(xi) The Advisory Agreement and the Custody Agreement have each been
duly authorized and approved by the Fund and comply as to form in all
material respects with all applicable provisions of the 1940 Act, and both
have been duly executed by the Fund.
(xii) The Fund is registered with the Commission under the 1940 Act
as a closed-end nondiversified management investment company, and all
required action has been taken by the Fund under the 1933 Act, the 1940
Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares pursuant to this Agreement; the
provisions of the Charter and By-Laws of the Fund comply as to form in all
material respects with the requirements of the 1940 Act; and, to the best
of their knowledge and information, no order of suspension or revocation
of such registration under the 1940 Act, pursuant to Section 8(e) of the
1940 Act, has been issued or proceedings therefor initiated or threatened
by the Commission.
(xiii) The information in the Prospectus under the caption "Taxes,"
to the extent that it constitutes matters of law or legal conclusions, has
been reviewed by them and is correct in all material respects.
(2) The favorable opinion, dated as of Closing Time, of Xxxxxx X.
Xxxxxxxx, Esq., General Counsel to the Adviser, in form and substance
satisfactory to counsel for the Underwriter, to the effect that:
(i) The Adviser has been duly organized as a corporation under the
laws of the State of Delaware with corporate power and authority to
conduct its business as described in the Registration Statement and the
Prospectus.
(ii) The Adviser is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the 1940
Act, or the rules and regulations under such Acts, from acting under the
Advisory Agreement for the Fund as contemplated by the Prospectus.
(iii) This Agreement and the Advisory Agreement have been duly
authorized, executed and delivered by the Adviser, and the Advisory
Agreement constitutes a valid and binding obligation of the Adviser,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization or other laws relating to or
affecting creditors' rights and to general equity principles; and, to the
best of his knowledge and information, neither the execution and delivery
of this Agreement or the Advisory
13
Agreement nor the performance by the Adviser of its obligations hereunder
or thereunder will conflict with, or result in a breach of, any of the
terms and provisions of, or constitute, with or without giving notice or
lapse of time or both, a default under, any agreement or instrument to
which the Adviser is a party or by which the Adviser is bound, or any law,
order, rule or regulation applicable to the Adviser of any jurisdiction,
court, federal or state regulatory body, administrative agency or other
governmental body, stock exchange or securities association having
jurisdiction over the Adviser or its properties or operations.
(iv) To the best of his knowledge and information, the description
of the Adviser in the Registration Statement and the Prospectus does not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(3) In addition to providing the opinion required by subsection (b) (1) of
this Section, Xxxxxx & Xxxxx shall also state that nothing has come to their
attention that would lead them to believe that the Registration Statement on the
date it became effective or at the Representation Date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of the date the Registration Statement became effective,
at the Representation Date (unless the term "Prospectus" refers to a prospectus
which has been provided to the Underwriter by the Fund for use in connection
with the offering of the Shares which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective, in which
case at the time they are first provided to the Underwriter for such use) or at
Closing Time, contained or contain any untrue statement of a material fact or
omitted or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. In making such statement, Xxxxxx & Xxxxx may state that the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the registration process are such,
however, that it does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus, except to the limited extent stated in paragraph b(l)
(xiii) above. In addition, it does not express any opinion or belief as to the
financial statements contained in the Registration Statement or the Prospectus
and understands that the Underwriters are relying upon Deloitte & Touche,
certified public accountants, as to the form and content of financial statements
contained in the Registration Statement and Prospectus. In giving their opinion,
Xxxxxx & Xxxxx may rely as to matters involving the laws of the State of
Maryland upon the opinion of Xxxxxxxx, Xxxxxxx and Xxxxx, Chartered. Xxxxxxxx,
Xxxxxxx and Xxxxx, Chartered and Xxxxxx & Xxxxx may rely, as to matters of fact,
upon certificates
14
and written statements of officers and employees of and accountants for the Fund
and the Adviser and of public officials.
(c) At Closing Time, (i) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated therein in
accordance with the 1933 Act, the 1940 Act and the Rules and Regulations and in
all material respects shall conform to the requirements of the 1933 Act, the
1940 Act and the Rules and Regulations and the Prospectus shall not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and no action, suit or proceeding at law or in
equity shall be pending or, to the knowledge of the Fund or the Adviser,
threatened against the Fund or the Adviser which would be required to be set
forth in the Prospectus other than as set forth therein, (ii) there shall not
have been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, of the Fund or in its earnings, business
affairs or business prospects, whether or not arising in the ordinary course of
business, from that set forth in the Registration Statement and Prospectus,
(iii) the Adviser shall have the financial resources available to it necessary
for the performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus and (iv) no proceedings shall be
pending or, to the knowledge of the Fund or the Adviser, threatened against the
Fund or the Adviser before or by any federal, state or other commission, board
or administrative agency wherein an unfavorable decision, ruling or finding
would materially and adversely affect the business, property, financial
condition or income of either the Fund or the Adviser other than as set forth in
the Registration Statement and the Prospectus; and the Underwriter shall have
received, at Closing Time, a certificate of the President or Treasurer of the
Fund and of the President or a Vice President of the Adviser dated as of Closing
Time, evidencing compliance with the appropriate provisions of this subsection
(c).
(d) At Closing Time, the Underwriter shall have received certificates,
dated as of Closing Time, (i) of the President or Treasurer of the Fund to the
effect that the representations and warranties of the Fund contained in Section
1(a) and (b) are true and correct with the same force and effect as though
expressly made at and as of Closing Time, and (ii) of the President or a Vice
President of the Adviser to the effect that the representations and warranties
of the Adviser contained in Sections 1(a) and (b) are true and correct with the
same force and effect as though expressly made at and as of Closing Time.
(e) At the time of execution of this Agreement, the Underwriter shall have
received from Deloitte & Touche a letter, dated such date in form and substance
satisfactory to the Underwriter, to the effect that:
15
(i) they are independent accountants with respect to the Fund within
the meaning of the 1933 Act and the Rules and Regulations;
(ii) in their opinion, the statement of assets and liabilities
examined by them and included in the Registration Statement complies as to
form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1940 Act and the Rules and Regulations; and
(iii) they have performed specified procedures, not constituting an
audit, including a reading of the latest available interim financial
statements of the Fund, a reading of the minute books of the Fund,
inquiries of officials of the Fund responsible for financial accounting
matters and such other inquiries and procedures as may be specified in
such letter, and on the basis of such inquiries and procedures nothing
came to their attention that caused them to believe that at the date of
the latest available statement of assets and liabilities read by such
accountants, or at a subsequent specified date not more than five days
prior to the date of this Agreement, there was any change in the capital
stock or net assets of the Fund as compared with amounts shown on the
statement of net assets included in the Prospectus.
(f) At Closing Time, the Underwriter shall have received from Deloitte &
Touche a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the "specified date" referred to shall be a date not more
than five days prior to Closing Time.
(g) At Closing Time, all proceedings taken by the Fund and the Adviser in
connection with the organization and registration of the Fund under the 1940 Act
and the issuance and sale of the Shares as herein and therein contemplated shall
be satisfactory in form and substance to the Underwriter.
(h) In the event the Underwriter exercises its option provided in section
2 hereof to purchase all or any portion of the Option Shares, the
representations and warranties of the Fund and the Adviser contained herein and
the statements in any certificate furnished by the Fund and the Adviser
hereunder shall be true and correct as of each Date of Delivery, and the
Underwriter shall have received:
(1) certificates, dated the Date of Delivery, of the President or
Treasurer of the Fund and of the President or a Vice President of the
Adviser confirming that the information contained in the certificate
delivered by each of them at Closing Time pursuant to Sections 5(c) and
(d), as the case may be, remains true as of such Date of Delivery;
16
(2) the favorable opinion of Xxxxxx & Xxxxx, counsel for the Fund
and Xxxxxx X. Xxxxxxxx, Esq., General Counsel to the Adviser, each in form
and substance satisfactory to the Underwriter, dated such Date of
Delivery, relating to the Option Shares and otherwise to the same effect
as the opinions required by Sections 5(b)(1) and (2), respectively; and
(3) a letter from Deloitte & Touche, in form and substance
satisfactory to the Underwriter and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished to
the Underwriter pursuant to Section 5(e), except that the "specified date"
in the letter furnished pursuant to this Section 5(h)(3) shall be a date
not more than five days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriter by notice to the Fund at any time at or prior to Closing Time, and
such termination shall be without liability of any party to any other party
except as provided in Section 4.
SECTION 6. Indemnification. (a) The Fund and the Adviser, jointly and
severally, agree to indemnify and hold harmless the Underwriter and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the
1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to
be part of the Registration Statement pursuant to Rule 430A of the Rules
and Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever as incurred to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is
17
effected with the written consent of the indemnifying party; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the Underwriter) reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) The Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Fund and the Adviser, their respective directors, each of the
Fund's officers who signed the Registration Statement, and each person, if any,
who controls the Fund or the Adviser within the meaning of Section 15 of the
1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Fund by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) In addition to the foregoing indemnification, the Adviser also agrees
to indemnify and hold harmless the Underwriter and each Person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, with respect to any
Omitting Prospectus or any advertising materials approved by the Adviser for use
in connection with the public offering of the Shares.
(d) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability which it may have
otherwise than on
18
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Fund, the Adviser and the
Underwriter shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement as
incurred by the Fund, the Adviser and the Underwriter, as incurred, in such
proportion that the Underwriter is responsible for that portion represented by
the percentage that the aggregate underwriting compensation payable pursuant to
Section 2 hereof bears to the aggregate initial public offering price of the
Shares sold under this Agreement and the Fund and the Adviser are responsible
for the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Underwriter, and each director of
the Fund and the Adviser, respectively, each officer of the Fund who signed the
Registration Statement, and each person, if any, who controls the Fund or the
Adviser within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Fund and the Adviser, respectively.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
the Pricing Agreement, or contained in certificates of officers of the Fund or
the Adviser submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the
Underwriter or controlling person, or by or on behalf of the Fund or the Adviser
and shall survive delivery of the Shares to the Underwriter.
SECTION 9. Termination of Agreement. (a) The Underwriter, by notice to the
Fund, may terminate this Agreement at any time at or prior to Closing Time (i)
if there has been, since the date of this Agreement or since the respective
dates as of which information is given in the Registration Statement, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or the Adviser,
whether or not arising in the ordinary course
19
of business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or elsewhere or any outbreak of
hostilities or other calamity or crisis or any escalation of existing
hostilities the effect of which is such as to make it, in the Underwriter's
judgment, impracticable to market the Shares or enforce contracts for the sale
of the Shares, or (iii) if trading in the Common Stock has been suspended by the
Commission or if trading generally on either the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by Federal
or New York authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Underwriter shall be directed to Xxxxxxx Xxxxx World Headquarters, Xxxxx Xxxxx,
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: _________,
Director; notices to the Fund or the Adviser shall be directed to each of them
at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxx
Xxxxxx, President.
SECTION 11. Parties. This Agreement and the Pricing Agreement shall inure
to the benefit of and be binding upon the Underwriter, the Fund, the Adviser and
their respective successors. Nothing expressed or mentioned in this Agreement or
the Pricing Agreement is intended or shall be construed to give any person, firm
or corporation, other than the parties hereto and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and the Pricing Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and thereto and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Shares from the Underwriter shall be deemed to be a successor by reason merely
of such purchase.
SECTION 12. Governing Law and Time. This Agreement and the Pricing
Agreement shall be governed by the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time.
20
If the foregoing is in accordance with your understanding of our
Agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a single binding agreement
among the Underwriter, the Fund and the Adviser in accordance with its terms.
Very truly yours,
MUNIASSETS FUND, INC.
By:__________________________________
(Authorized Officer)
FUND ASSET MANAGEMENT, INC.
By:__________________________________
(Authorized Officer)
Confirmed and Accepted,
as of the date first above
written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:_______________________________________
Vice President
Investment Banking Group
21
Exhibit A
6,700,000 Shares
MuniAssets Fund, Inc
(a Maryland corporation)
Common Stock
(Par Value $.l0 Per Share)
PRICING AGREEMENT
June __, 1993
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Purchase Agreement, dated June ___, 1993 (the
"Purchase Agreement"), relating to the purchase by Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the "Underwriter"), of the above
shares of Common Stock par value $.10 per share (the "Initial Shares"), of
MuniAssets Fund, Inc. (the "Fund") and relating to the option granted to the
Underwriter to purchase up to an additional 1,005,000 shares of Common Stock,
par value $.10 per share, of the Fund to cover over-allotments in connection
with the sale of the Initial Shares (the "Option Shares"). The Initial Shares
and all or any part of the Option Shares are collectively herein referred to as
the "Shares."
Pursuant to Section 2 of the Purchase Agreement, the Fund agrees with the
Underwriter as follows:
1. The applicable initial public offering price per share for the Shares,
determined as provided in said Section 2 shall be as follows:
(a) $15.00 for purchases in single transactions of less than 3,500
Shares;
(b) $14.85 for purchase in single transactions of 3,500 or more
Shares but less than 7,000 Shares; and
(c) $14.70 for purchases in single transactions of 7,000 or more
Shares.
2. The purchase price per share for the Shares to be paid by the
Underwriter shall be $_________ being an amount equal to the applicable initial
public offering price set forth above less (i) $_____ per share for purchases in
single transactions of less than 3,500 Shares; (ii) $_____ per share for
purchases in single transactions of 3,500 or more Shares but less than 7,000
Shares and (iii) $_____ per share for purchases in single transactions of 7,000
or more Shares.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Fund a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Fund in accordance with its terms.
Very truly yours,
MUNIASSETS FUND, INC.
By:_____________________________
(Authorized Officer)
Confirmed and Accepted, as
of the date first above
written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:_______________________________________
Vice President
Investment Banking Group
