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Exhibit 7(a)
6,911,560 Shares
MuniYield Michigan Insured Fund, Inc.
(a Maryland corporation)
Common Stock
(Par Value $0.10 Per Share)
PURCHASE AGREEMENT
October 23, 1992
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:
MuniYield Michigan Insured 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 6,911,560 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 276,462 additional shares of
Common Stock to cover over-allotments. The aforesaid 6,911,560 shares (the
"Initial Shares"), together with all or any part of the 276,462 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. 33-50486) and a related
preliminary prospectus for the registration of the Shares under the Securities
Act of 1933, as amended (the "1933 Act"), and a
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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
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.
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(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 accounted 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.
(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
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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.
(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.
(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
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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 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
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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 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, less an amount equal to
any dividend paid by the Fund and payable on any Initial Shares and not payable
on such Option Shares. 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 Xxxxx & Xxxx, Xxx Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, 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
(unless postponed in accordance with the provisions of Section 10) 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 Xxxxx & Wood, 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.
SECTION 3. Covenants of the Fund. The Fund covenants with the
Underwriter as follows:
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(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 amendment
thereto (but without exhibits to the registration statement or any such
amendment) for the Underwriter.
(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.
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(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 security
holders 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, 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 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) The Fund will use its best efforts to effect the listing
of the Shares on the New York Stock Exchange so that trading on such
Exchange will begin no later than three weeks from the date of the
Prospectus.
SECTION 4. Payment of Expenses. The Fund will pay all expenses incident
to the performance of its obligations under this Agreement, including, but not
limited to, expenses
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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 their 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 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 Xxxxx & Xxxx, counsel for the Fund and the Underwriter, to
the effect that:
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(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 have each been duly
authorized, executed and delivered by the Fund and each
complies with all applicable provisions of the 1940 Act.
(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,
references thereto are correct, and no default exists in the
due performance or observance of any material
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obligation, agreement, covenant or condition contained in any
contract, indenture, loan agreement note or lease 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 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"
(other than information related to Michigan law as to which no
opinion need be rendered), 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
Dickinson, Wright, Moon, Van Dusen & Xxxxxxx, special counsel for the
Fund, to the effect that:
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(i) The information in the Prospectus under the caption "Taxes" to
the extent that it constitutes matters of Michigan law or
legal conclusions involving matters of Michigan law, has been
reviewed by them and is correct in all material respects.
(ii) Nothing has come to their attention that would lead them to
believe that the information in the Registration Statement
under the caption "Investment Objective and Policies --
Special Considerations Relating to Michigan Municipal Bonds"
and in Appendix I entitled "Economic Conditions in Michigan",
at the time it became effective or at the Representation Date,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the information under such caption and in such appendix
in the Prospectus, 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,
included an untrue statement of a material fact or omitted 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.
(3) 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
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
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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.
(4) In giving their opinion required by sub-section (b)(1) of
this Section, Xxxxx & Xxxx shall additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement (other than the financial statements included
therein, as to which no opinion need be rendered), at the time it
became effective or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other than the financial
statement included therein, as to which no opinion need be rendered),
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, included
an untrue statement of a material fact or omitted 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. In giving
their opinion, Xxxxx & Wood 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 Xxxxx &
Wood may rely, as to matters of fact, upon certificates 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 neither the Registration Statement
nor the Prospectus shall 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, 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
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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) 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 Ernst & Young a letter, dated such date in form and substance
satisfactory to the Underwriter, to the effect that:
(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
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15
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 Ernst &
Young 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.
(2) The favorable opinion of Xxxxx & Xxxx, counsel for the
Fund, Dickson, Wright, Moon, Van Dusen & Xxxxxxx, Special Michigan
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), (2) and (3), respectively.
(3) A letter from Ernst & Young, 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:
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16
(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
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
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17
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 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 of business, or (ii) if there has
occurred any material adverse
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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: Xxxxxxx Xxxx,
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.
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Exhibit A
6,911,560 Shares
MuniYield Michigan Insured Fund, Inc.
(a Maryland corporation)
Common Stock
(Par Value $.10 Per Share)
PRICING AGREEMENT
October 23, 1992
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 October 23, 1992
(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 MuniYield Michigan Insured Fund, Inc. (the "Fund") and relating to the option
granted to the Underwriter to purchase up to an additional 276,462 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 purchases 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.
X-0
00
0. The purchase price per share for the Shares to be paid by the
Underwriter shall be $14.175 being an amount equal to the applicable initial
public offering price set forth above less (i) $.825 per share for purchases in
single transactions of less than 3,500 Shares; (ii) $.675 per share for
purchases in single transactions of 3,500 or more Shares but less than 7,000
Shares and (iii) $.525 per share for purchases in single transactions of 7,000
or more Shares.
A-2
21
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,
MUNIYIELD MICHIGAN INSURED
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
