EXHIBIT (H)(1)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ INSURED FUND
(A MASSACHUSETTS BUSINESS TRUST)
$___________________
AUCTION MARKET PREFERRED SHARES
__________ SHARES, SERIES A
__________ SHARES, SERIES B
PURCHASE AGREEMENT
Dated: ________ __, 1999
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Table of Contents
Page
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SECTION 1. Representations and Warranties...................................................................... 2
(a) Representations and Warranties by the Fund and the Adviser................................... 2
(b) Additional Representations of the Adviser.................................................... 7
(c) Officers' Certificates....................................................................... 7
SECTION 2. Sale and Delivery to the Underwriter; Closing....................................................... 8
(a) Purchase Price............................................................................... 8
(b) Payment...................................................................................... 8
(c) Denominations; Registration.................................................................. 8
SECTION 3. Covenants of the Fund............................................................................... 8
(a) Compliance with Securities Regulations and Commission
Requests..................................................................................... 8
(b) Filing of Amendments......................................................................... 9
(c) Delivery of Registration Statements.......................................................... 9
(d) Delivery of Prospectus....................................................................... 9
(e) Continued Compliance with Securities Laws.................................................... 10
(f) Blue Sky Qualifications...................................................................... 10
(g) Rule 158..................................................................................... 10
(h) Use of Proceeds.............................................................................. 10
(i) Subchapter M................................................................................. 10
(j) Restrictions on Sale of Shares............................................................... 11
SECTION 4. Covenants of the Underwriter........................................................................ 11
SECTION 5. Payment of Expenses................................................................................. 11
(a) Expenses..................................................................................... 11
(b) Termination of Agreement..................................................................... 11
SECTION 6. Conditions of Underwriter's Obligations............................................................. 11
(a) Effectiveness of Registration Statement...................................................... 12
(b) Opinion of Counsel for the Fund and the Underwriter.......................................... 12
(c) Opinion of General Counsel of the Adviser.................................................... 12
(d) Opinion of Special Pennsylvania Counsel to the Fund.......................................... 12
(e) Officers' Certificates....................................................................... 12
(f) Accountant's Comfort Letter.................................................................. 13
(g) Bring-down Comfort Letter.................................................................... 13
(h) Ratings Letters.............................................................................. 13
(i) Additional Documents......................................................................... 13
(j) Termination of Agreement..................................................................... 13
(i)
SECTION 7. Indemnification..................................................................................... 13
(a) Indemnification of the Underwriter........................................................... 13
(b) Indemnification of Fund, Adviser, Trustees, General Partner and
Officers................................................................................. 14
(c) Actions against Parties, Notification........................................................ 15
(d) Settlement without Consent if Failure to Reimburse........................................... 15
SECTION 8. Contribution........................................................................................ 15
SECTION 9. Representations, Warranties and Agreements to Survive Delivery...................................... 17
SECTION 10. Termination of Agreement........................................................................... 17
(a) Termination; General......................................................................... 17
(b) Liabilities.................................................................................. 17
SECTION 11. Notices............................................................................................ 17
SECTION 12. Parties............................................................................................ 17
SECTION 13. Governing Law and Time............................................................................. 17
SECTION 14. Liability of Shareholders, Trustees and Officers................................................... 18
SECTION 15. Effect of Headings................................................................................. 18
SCHEDULE A. ................................................................................................... 20
EXHIBITS
Exhibit A - Form of Opinion of Fund's Counsel.................................................................. A-1
Exhibit B - Form of Opinion of General Counsel of the Investment Adviser....................................... B-1
Exhibit C - Form of Opinion of Special Pennsylvania Counsel to the Fund........................................ C-1
Exhibit D - Form of Accountants' Comfort Letter................................................................ D-1
(ii)
MUNIHOLDINGS PENNSYLVANIA INSURED FUND
(a Massachusetts business trust)
$____________
Auction Market Preferred Shares
__________ Shares, Series A
__________ Shares, Series B
(Liquidation Preference $25,000 per Share)
PURCHASE AGREEMENT
, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
MuniHoldings Pennsylvania Insured Fund, a Massachusetts business trust (the
"Fund"), and Fund Asset Management, L.P., a Delaware limited partnership (the
"Adviser"), each confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (the "Underwriter"), with respect to the
issue and sale by the Fund and the purchase by the Underwriter of __________
Auction Market Preferred Shares(R), Series A ("Series A AMPS") and ___ Auction
Market Preferred Shares, Series B ("Series B AMPS"), each with a par value of
$.10 per share and a liquidation preference $25,000 per share plus an amount
equal to accumulated but unpaid dividends thereon (whether or not earned or
declared), of the Fund (together, the "Shares").
The Fund understands that the Underwriter proposes to make a public
offering of the Shares as soon as the Underwriter deems advisable after this
Agreement has been executed and delivered.
_______________
(R) Registered trademark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") 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
"Investment Company Act"), and a registration statement on Form N-2 (No. 333-),
including the related preliminary prospectus and preliminary statement of
additional information, for the registration of the Shares under the Securities
Act of 1933, as amended (the "1933 Act"), the Investment Company Act, and the
rules and regulations of the Commission under the 1933 Act and the Investment
Company Act (together, the "Rules and Regulations"), and has filed such
amendments to such registration statement on Form N-2, if any, and such amended
preliminary prospectuses and preliminary statement of additional information as
may have been required to the date hereof. Promptly after execution and delivery
of this Agreement, the Fund will either (i) prepare and file a prospectus and
statement of additional information in accordance with the provisions of
paragraph (c) of Rule 497 ("Rule 497(c)") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") or a certificate in
accordance with the provisions of paragraph (j) of Rule 497 ("Rule 497(j)") of
the 1933 Act Regulations, (ii) prepare and file a prospectus and statement of
additional information in accordance with the provisions of Rule 430A ("Rule
430A") of the 1933 Act Regulations and paragraph (h) of Rule 497 ("Rule 497(h)")
of the 1933 Act Regulations, or (iii) if the Fund has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 497(h). The
information included in any such prospectus and statement of additional
information or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus and statement of additional information used
before such registration statement became effective, and any prospectus and
statement of additional information that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus/statement." Such registration statement, including the
exhibits thereto and schedules thereto, if any, at the time it became effective
and including the Rule 430A Information and the Rule 434 Information, as
applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus and final statement of additional information in
the form first furnished to the Underwriter for use in connection with the
offering of the Shares is herein called the "Prospectus." If Rule 434 is relied
on, the term "Prospectus" shall refer to the preliminary prospectus/statement
dated _____________, 1999, together with the applicable Term Sheet and all
references in this Agreement to the date of such Prospectus shall mean the date
of the applicable Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus/statement, the
Prospectus, or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any
2
preliminary prospectus/statement, or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is incorporated by reference in the
Registration Statement, any preliminary prospectus/statement, or the Prospectus,
as the case may be.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Fund and the Adviser. The Fund
and the Adviser each severally represents and warrants to the Underwriter as of
the date hereof, as of the Closing Time referred to in Section 2(c) hereof and
as of the Date of Delivery (if any) referred to in Section 2(b) hereof, and
agrees with the Underwriter, as follows:
(i) Compliance with Registration Requirements. The Fund meets the
-----------------------------------------
requirements for use of Form N-2 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Fund, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with. If
required, the Fund has received any orders exempting the Fund from any
provisions of the Investment Company Act.
(ii) At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time the Registration Statement, the
Rule 462(b) Registration Statement and any amendments or supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act, the Investment Company Act and the Rules and
Regulations and did not 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. Neither
the Prospectus, nor any amendments or supplements thereto, at the time the
Prospectus or any amendments or supplements thereto were issued and at the
Closing Time included or will include an untrue statement of a material
fact or omitted or will 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. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the 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 in the
Prospectus. If Rule 434 is used, the Fund will comply with the requirements
of Rule 434.
(iii) Each preliminary prospectus/statement and the prospectus and
statement of additional information filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 497(c) or Rule 497(h) under the 1933 Act, complied when so
filed in all material respects with the Rules and Regulations and each
preliminary prospectus/statement and the Prospectus delivered to the
Underwriter for use in connection with this offering was identical to the
electronically
3
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(iv) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules, if any, included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the Rules and Regulations.
(v) Financial Statements. The financial statements, included in
--------------------
the Registration Statement and Prospectus, together with the related
schedules and notes, present fairly the financial position of the Fund at
the date indicated and said statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the period involved. The supporting schedules,
if any, included in the Registration Statement present fairly, in
accordance with GAAP the information required to be stated therein. The
information under the headings "Description of Capital Shares" and
"Portfolio Composition" has been fairly presented.
(vi) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and in
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Fund,
other than those in the ordinary course of business, which are material
with respect to the Fund and (C) except for regular monthly dividends and
special year end distributions related to the Fund's qualification as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended ("Subchapter M of the Code"), on the outstanding
common shares, par value $.10 per share (the "Common Shares") of the Fund,
there has been no dividend or distribution of any kind declared, paid or
made by the Fund on any class of its capital shares.
(vii) Good Standing of the Fund. The Fund has been duly organized
-------------------------
and is validly existing as a voluntary association (commonly referred to as
a business trust) under the laws of the Commonwealth of Massachusetts and
has power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Fund is duly
qualified to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(viii) Subsidiaries. The Fund has no subsidiaries.
------------
(ix) Capitalization. The authorized, issued and outstanding capital
--------------
shares of the Fund is as set forth in the Prospectus under the caption
"Description of Capital Shares." The outstanding Common Shares have been
duly authorized and validly issued
4
and are fully paid and non-assessable and the Common Shares conforms to all
statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same.
(x) Investment Company Act. The Fund is registered with the
----------------------
Commission under the Investment Company 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.
(xi) Authorization and Description of Shares. The Shares to be
---------------------------------------
purchased by the Underwriter from the Fund 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 this Agreement will be validly issued,
fully paid and non-assessable (except for certain possible liability of
shareholders described in the Prospectus under "Description of Capital
Shares"); the Shares conform to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Shares will be subject
to personal liability by reason of being such a holder (except for certain
possible liability of shareholders described in the Prospectus under
"Description of Capital Shares"); and the issuance of the Shares is not
subject to the preemptive or other similar rights of any securityholder of
the Fund.
(xii) Absence of Defaults and Conflicts. The Fund is not in violation
---------------------------------
of its declaration of trust or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any material contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Fund
is a party or by which it or its properties may be bound, or to which any
of the property or assets of the Fund is subject (collectively, "Agreements
and Instruments"), except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, the Investment Advisory Agreement, the Custody Agreement,
the Auction Agent Agreement and the Letter of Representations referred to
in the Registration Statement (as used herein, the "Advisory Agreement",
the "Custody Agreement," the "Auction Agreement" and the "Letter of
Representations" respectively) and the consummation of the transactions
contemplated in this Agreement and in the Registration Statement (including
the issuance and sale of the Shares and the use of the proceeds from the
sale of the Shares as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Fund with its obligations under this
Agreement have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or a
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Fund pursuant to the Agreements and Instruments (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the declaration of trust or
the by-laws of the Fund, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic
5
or foreign, having jurisdiction over the Fund or any of its assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Fund.
(xiii) Authorization of Agreements. Each of this Agreement, the
---------------------------
Advisory Agreement and the Custody Agreement has been duly authorized,
executed and delivered by the Fund, and each complies with all applicable
provisions of the Investment Company Act. Each of the Auction Agreement and
the Letter of Representations has been duly authorized for execution and
delivery by the Fund and, when executed and delivered by the Fund, will
constitute a valid and binding obligation of the Fund, 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 equitable principles.
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought 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 is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the performance by the Fund
of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Fund is a party or of which any of
its respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(xv) Subchapter M Compliance. The Fund intends to, and will, direct
-----------------------
the investment of the proceeds of the offering described in the
Registration Statement in such a manner as to comply with the requirements
of Subchapter M of the Code, and intends to qualify as a regulated
investment company under Subchapter M of the Code.
(xvi) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xvii) Possession of Intellectual Property. The Fund owns or
-----------------------------------
possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names
or other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by it, and the Fund has not
received any notice or is otherwise aware of any infringement or conflict
with asserted rights of others with respect to any Intellectual Property or
of any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Fund
6
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Fund of its obligations
hereunder, in connection with the offering, issuance or sale of the Shares
under this Agreement or the consummation of the transactions contemplated
by this Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1940 Act or the Rules and Regulations
and foreign or state securities or blue sky laws.
(xix) Possession of Licenses and Permits. The Fund possesses such
---------------------------------
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it; the Fund is in compliance with the terms
and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and the Fund has not received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(b) Additional Representations of the Adviser. The Adviser represents and
warrants to the Underwriter as of the date hereof and as of the Representation
Date as follows:
(i) Organization and Authority of Adviser. The Adviser has been
-------------------------------------
duly organized as a limited partnership under the laws of the State of
Delaware, with power and authority to conduct its business as described in
the Registration Statement and the Prospectus.
(ii) Investment Advisers Act. The Adviser is duly registered as an
-----------------------
investment adviser under the Investment Advisers Act of 1940, as amended
(the "Investment Advisers Act"), and is not prohibited by the Investment
Advisers Act or the Investment Company Act, or the rules and regulations
under such acts, from acting under the Advisory Agreement for the Fund as
contemplated by the Registration Statement and the Prospectus.
(iii) Authorization of Agreements. 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
7
affecting creditors' rights and to general equitable 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
the 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) Financial Resources. The Adviser has the financial resources
-------------------
available to it necessary for the performance of its services and
obligations as contemplated in the Registration Statement and the
Prospectus.
(c) Officers' Certificates. Any certificate signed by any officer
of the Fund or any officer of the Adviser delivered to the Underwriter or to
counsel for the Fund and 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.
---------------------------------------------
(a) Purchase Price. 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 to the Underwriter and the Underwriter agrees to purchase
from the Fund the Shares at the price per share set forth in Schedule A.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the offices of ▇▇▇▇▇ & ▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as
shall be agreed upon by the Underwriter and the Fund, at 9:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day following the date hereof, 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 herein
being referred to as "Closing Time").
Payment shall be made to the Fund by wire transfer of immediately available
funds to a bank account designated by the Fund, against delivery to the
Underwriter of certificates for the Shares to be purchased by it.
(c) Denominations; Registration. The Shares shall be represented by
certificates registered in the name of Cede & Co., as nominee for The Depository
Trust Company. The certificates for the Shares will be made available for
examination by the Underwriter not later than 10:00 A.M. on the last business
day prior to Closing Time.
SECTION 3. Covenants of the Fund. The Fund covenants with the Underwriter
---------------------
as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Fund, subject to Section 3(b), will comply with the requirements of Rule 430A or
Rule 434, as
8
applicable, and will notify the Underwriter immediately, and confirm the notice
in writing, (i) if any post-effective amendment to the Registration Statement
shall have become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (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 of any order
preventing or suspending the use of any preliminary prospectus/statement, or of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes, 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 Investment Company 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. The Fund will
promptly effect the filings necessary pursuant to Rule 497(c), Rule 497(j) or
Rule 497(h) and will take such steps as it deems necessary to ascertain promptly
whether the certificate transmitted for filing under Rule 497(j) or the form of
prospectus and statement of additional information transmitted for filing under
Rule 497(c) or Rule 497(h) was received for filing by the Commission and, in the
event that it was not, it will promptly file such certificate or prospectus and
statement of additional information.
(b) Filing of Amendments. The Fund will give the Underwriter notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment or filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus or
statement of additional information included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the
Investment Company Act, the 1933 Act, or otherwise, and will furnish the
Underwriter with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriter or counsel to the Underwriter and the
Fund shall object.
(c) Delivery of Registration Statements. The Fund has furnished or will
deliver to the Underwriter and counsel to the Underwriter and the Fund, without
charge, signed copies of the notification of registration on Form N-8A and
Registration Statement as originally filed and of each amendment thereto,
(including exhibits filed therewith, or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Underwriter a conformed copy, without charge, of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for the Underwriter. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Fund has delivered to the Underwriter,
without charge, as many copies of each preliminary prospectus/statement as the
Underwriter reasonably requested, and the Fund hereby consents to the use of
such copies for purposes permitted by the
9
1933 Act. The Fund will furnish to the Underwriter, without charge, 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. The Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof field with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Fund will comply with
the 1933 Act, the Investment Company Act and the Rules and Regulations so as to
permit the completion of the distribution of the Shares as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Shares, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel to the Underwriter and the Fund, to amend the
Registration Statement or amend or supplement any Prospectus in order that the
Prospectus will not include any untrue statements of material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement any Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Fund will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Fund will
furnish to the Underwriter such number of copies of such amendment or supplement
as the Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Fund will use its best efforts, in
cooperation with the Underwriter, to qualify the Shares for offering and sale
under the applicable securities laws of such states and other jurisdictions as
the Underwriter may designate and to maintain such qualifications in effect for
a period of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement; provided,
however, that the Fund shall not be obligated to file any general consent to
service of process or to qualify as a dealer in securities in any jurisdiction
in which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Shares have been so qualified, the Fund will file
such statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one year
from the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Fund will timely file such reports pursuant to the
Investment Company Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Fund will use the net proceeds received by it
from the sale of the Shares in the manner specified in the Prospectus under "Use
of Proceeds."
10
(i) Subchapter M. The Fund will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of the Code.
(j) Restrictions on Sale of Shares. During a period of 180 days from the
date of the Prospectus, the Fund will not, without your prior written consent,
directly or indirectly (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of any
senior security of the Fund, as defined in Section 18 of the Investment Company
Act, or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of senior securities, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of senior securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Shares to be sold hereunder or (B) transactions as contemplated
in the Registration Statement where the Fund has segregated cash, cash
equivalents or liquid securities at the Fund's custodian having a market value
at all times at least equal to the amount of such senior securities.
SECTION 4. Covenants of the Underwriter. The Underwriter covenants and
----------------------------
agrees with the Fund that no later than the second business day succeeding
Closing Time, it will provide the Fund and the Auction Agent (as defined in the
Prospectus) with a listing of Existing Holders (as defined in the Prospectus) of
Shares, the number of Shares held by each such Existing Holder and the number of
Shares it is holding as Underwriter as of the date of such notice.
SECTION 5. Payment of Expenses.
-------------------
(a) Expenses. The Fund will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriter of this Agreement and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Shares, (iii) the preparation, issuance and
delivery of the certificates for the Shares to the Underwriter, including any
stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Shares to the Underwriter, (iv) the fees and
disbursements of the Fund's counsel, accountants and other advisors, (v) the
qualification of the Shares under the securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel to the Underwriter and the Fund in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriter of copies
of each preliminary prospectus/statement, any Term Sheets and of the Prospectus
and any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriter of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of any transfer agent or registrar for the
Shares, and (ix) the fees charged by rating agencies rating the Shares.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 6 or Section 10(a)(i)
hereof, the Fund or the Adviser
11
shall reimburse the Underwriter for all of its out-of-pocket expenses, including
the reasonable fees and disbursements of counsel to the Fund and the
Underwriter.
SECTION 6. 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 contained in Section 1 hereof, or in the
certificates of any officer of the Fund and the Adviser delivered pursuant to
the provisions hereof, to the performance by the Fund and the Adviser of their
respective covenants and obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement
including any Rule 462(b) Registration Statement has become effective 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 and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriter and the Fund. Either (i)
a certificate has been filed with the Commission in accordance with Rule 497(j)
or a prospectus and statement of additional information have been filed with the
Commission in accordance with Rule 497(c), or (ii) a prospectus and statement of
additional information containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 497(h) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the Fund has
elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 497(h).
(b) Opinion of Counsel for the Fund and the Underwriter. At Closing Time,
the Underwriter shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Fund and the Underwriter, to the
effect set forth in Exhibit A hereto. In giving their opinion, ▇▇▇▇▇ & Wood LLP
---------
may rely as to matters involving the laws of the Commonwealth of Massachusetts
upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP.
(c) Opinion of General Counsel of the Adviser. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., General Counsel to the Adviser, in form and
substance satisfactory to counsel to the Underwriter, to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Underwriter may
---------
reasonably request.
(d) Opinion of Special Pennsylvania Counsel to the Fund. At Closing Time,
the Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Stradley, Ronon, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special Pennsylvania counsel to
the Fund, to the effect set forth in Exhibit C hereto.
---------
(e) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, and the
Underwriter shall have received (A) a certificate of the President or a Vice
President of the Fund, dated as of Closing Time, to the effect that (i) there
has been no such
12
material adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Fund has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or are contemplated by the Commission and
(B) a certificate of the President or a Vice President of the Adviser, dated as
of Closing Time, to the effect that (i) the representations and warranties in
Sections 1(a) and 1(b) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, and (ii) the Adviser
has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time.
(f) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriter shall have received from ___________________ a
letter, dated such date, in form and substance satisfactory to the Underwriter
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus, to the effect set forth in Exhibit D hereto and to
---------
such further effect as counsel to the Underwriter may reasonably request.
(g) Bring-down Comfort Letter. At Closing Time, the Underwriter shall have
received from __________________ a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter, furnished pursuant
to subsection (f) of this Section, except that the "specified date" referred to
shall be a date not more than three business days prior to Closing Time.
(h) Ratings Letters. At Closing Time, Standard & Poor's ("S&P") and
▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's") shall have confirmed by letter that
the Shares have been rated AAA and "aaa," respectively, by such agencies.
(i) Additional Documents. At Closing Time, counsel to the Fund and the
Underwriter shall have been furnished with such documents and opinions as it may
require for the purpose of enabling it to pass upon the issuance and sale of the
Shares as herein contemplated, or in order to evidence the accuracy of any of
the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Fund in connection with the
issuance and sale of the Shares as herein contemplated shall be satisfactory in
form and substance to the Underwriter and counsel to the Fund and the
Underwriter.
(j) Termination of Agreement. 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 5 and except that
Sections 1, 7, 8 and 9 shall survive any such termination and remain in full
force and effect.
13
SECTION 7. Indemnification.
---------------
(a) Indemnification of the Underwriter. (1) 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 Rule 430A Information and the
Rule 434 Information, 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 included in any
preliminary prospectus/statement 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 any 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, provided that
(subject to Section 7(d) below) any such settlement is effected with the
written consent of the indemnifying party; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter) reasonably
incurred in investigating, preparing or defending against any litigation,
or any 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 shall 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), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus/statement or the Prospectus (or any
amendment or supplement thereto).
(2) Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of the Underwriter
or who controls the Underwriter within the meaning of Section 15 of the 1933 Act
and who, at the date of this Agreement, is a trustee or officer of the Fund or
controls the Fund within the meaning of Section
14
15 of the 1933 Act, such indemnity agreement is subject to the undertaking of
the Fund in the Registration Statement under Item 29 thereof.
(b) Indemnification of Fund, Adviser, Trustees, General Partner and
Officers. The Underwriter agrees to indemnify and hold harmless the Fund, the
Adviser, the trustees of the Fund, the general partner of the Adviser, 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) including the Rule 430A Information and the Rule 434
Information, if applicable, or in any preliminary prospectus/statement 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/statement or the Prospectus (or any amendment or
supplement thereto).
(c) Actions against Parties, Notification. 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 such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Underwriter, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Fund and the Adviser. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. 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. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7 (a)(ii) effected without its written consent if
15
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in Section
------------
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and the
Adviser on the one hand and the Underwriter on the other hand from the offering
of the Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Fund and the Adviser on the one hand
and of the Underwriter on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Adviser on the one hand
and the Underwriter on the other hand in connection with the offering of the
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this Agreement (net of underwriting discounts and commissions but before
deducting expenses) received by the Fund, and the total underwriting discount
received by the Underwriter, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Shares as set
forth on such cover.
The relative fault of the Fund and the Adviser on the one hand and the
Underwriter on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund and the Adviser or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Fund, the Adviser and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, the Underwriter shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Shares
16
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which the Underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, 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 and 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.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Fund or of 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 10. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriter may terminate this Agreement by
notice to the Fund, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, 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 change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriter, impracticable to market the Shares or to enforce
contracts for the sale of the Shares, or (iii) if trading in any securities of
the Fund has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. 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
17
Section 5 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive
such termination and remain in full force and effect.
SECTION 11. 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 telecommunication. Notices to the
Underwriter shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated at North Tower, World Financial Center, New
York, New York 10281-1201, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Director; notices to the
Fund or to the Adviser shall be directed to each of them at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President.
SECTION 12. Parties. This 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 is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter, the Fund, the Adviser and their respective successors and the
controlling persons and officers, trustees and general partner referred to in
Sections 7 and 8 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 all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriter,
the Fund and the Adviser and their respective successors, and said controlling
persons and officers, trustees and general partner 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
merely by reason of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Liability of Shareholders, Trustees and Officers. This
------------------------------------------------
Agreement is executed by or on behalf of the trustees of the Fund solely in
their capacity as such trustees, and shall not constitute their personal
obligation either jointly or severally in their individual capacities. No
trustee, officer or shareholder of the Fund shall be liable for any obligations
of the Fund under this instrument and the Fund shall be solely liable therefor;
all parties hereto shall look solely to the Fund property for the payment of any
claim, or the performance of any obligation, hereunder.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
18
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 and the Adviser in accordance with its terms.
Very truly yours,
MUNIHOLDINGS PENNSYLVANIA INSURED
FUND
By:__________________________
Authorized Officer
FUND ASSET MANAGEMENT, L.P.
By:__________________________
Authorized Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: ______________________________
Authorized Signatory
19
SCHEDULE A
----------
MUNIHOLDINGS PENNSYLVANIA INSURED FUND
(a Massachusetts business trust)
$____________
Auction Market Preferred Shares
__________ Shares, Series A
__________ Shares, Series B
(Liquidation Preference $25,000 per share)
1. The initial public offering price per share for the Shares, determined
as provided in Section 2 hereof shall be $25,000 plus accumulated dividends, if
any, from the date of original issue.
2. The purchase price per share for the Shares to be paid by the
Underwriter shall be $__________ plus accumulated dividends, if any, from the
date of original issue, being an amount equal to the initial offering price set
forth above less $__________ per share.
3. The dividend rate for the Series A AMPS for the initial dividend
period ending ________________shall be ____% and the dividend rate for the
Series B AMPS for the initial dividend period ending ______________ shall be
_____%.
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Exhibit A
FORM OF OPINION OF FUND'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Fund has been duly organized and is validly existing as a
voluntary association (commonly referred to as a business trust) under the laws
of the Commonwealth of Massachusetts.
(ii) The Fund has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Purchase Agreement.
(iii) The Fund is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Fund, whether or
not arising in the ordinary course of business (a "Material Adverse Effect").
(iv) The authorized, issued and outstanding capital shares of the Fund is
as set forth in the Prospectus under the caption "Description of Capital
Shares." The outstanding Common Shares of the Fund have been duly authorized and
validly issued and are fully paid and nonassessable.
(v) Shares to be purchased by the Underwriter from the Fund have been
duly authorized for issuance and sale to the Underwriter pursuant to the
Purchase Agreement and, when issued and delivered by the Fund pursuant to the
Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable
(except for certain possible liability of shareholders described in the
Prospectus under "Description of Capital Shares") and no holder of the Shares is
or will be subject to personal liability by reason of being such a holder
(except for certain possible liability of shareholders described in the
Prospectus under "Description of Capital Shares").
(vi) The issuance of the Shares is not subject to the preemptive or other
similar rights of any securityholder of the Fund.
(vii) To the best of our knowledge, the Fund does not have any
subsidiaries.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Fund and complies with all applicable provisions of the
Investment Company Act.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the certificate pursuant to
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Rule 497(j) or the Prospectus pursuant to Rule 497(c) or Rule 497(h), as the
case may be, has been made in the manner and within the time period required by
Rule 497(j), Rule 497(c) or Rule 497(h), as the case may be; and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, and each amendment or supplement to the Registration
Statement and the Prospectus, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included therein
or omitted therefrom, as to which we need express no opinion) complied as to
form in all material respects with the requirements of the 1933 Act, the
Investment Company Act and the Rules and Regulations.
(xi) The form of certificate used to evidence the Shares complies in all
material respects with all applicable statutory requirements and with any
applicable requirements of the declaration of trust and by-laws of the Fund. To
the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Fund is a party, or to which
the property of the Fund is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Fund of its obligations thereunder, other than those
disclosed in the Prospectus.
(xii) The information in the Prospectus under "Description of AMPS,"
"Description of Capital Shares," "Taxes" (other than information related to
Pennsylvania law or legal conclusions involving matters of Pennsylvania law as
to which we express no opinion) and in the Registration Statement under Item 29,
to the extent that it constitutes matters of law, summaries of legal matters,
the Fund's declaration of trust and bylaws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects.
(xiii) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(xiv) All descriptions in the Prospectus of contracts and other documents
to which the Fund is a party are accurate in all material respects; to the best
of our knowledge, there are no franchises, 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 or
incorporated by reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(xv) To the best of our knowledge, the Fund is not in violation of its
declaration of trust or by-laws and no default by the Fund exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture,
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mortgage, loan agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement or the Prospectus or
filed or incorporated by reference as an exhibit to the Registration Statement.
(xvi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act, the
Investment Company Act and the Rules and Regulations, which have been obtained,
or as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the Purchase
Agreement, the Advisory Agreement, the Custody Agreement, the Auction Agreement
and the Letter of Representations or for the offering, issuance, sale or
delivery of the Shares.
(xvii) 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 Investment Company Act, and each
has been duly executed by the Fund.
(xviii) Each of the Auction Agent Agreement and the Letter of
Representations has been duly authorized, executed and delivered by the Fund,
and each constitutes a valid and binding obligation of the Fund, 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 equitable principles.
(xix) The Fund is registered with the Commission under the Investment
Company Act as a closed-end, non-diversified management investment company, and
all required action has been taken by the Fund under the 1933 Act, the
Investment Company Act and the Rules and Regulations to make the public offering
and consummate the sale of the Shares pursuant to the Purchase Agreement; the
provisions of the declaration of trust and the by-laws of the Fund comply as to
form in all material respects with the requirements of the Investment Company
Act; and, to the best of their knowledge and information, no order of suspension
or revocation of such registration under the Investment Company Act, pursuant to
Section 8(e) of the Investment Company Act, has been issued or proceedings
therefor initiated or threatened by the Commission.
(xx) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Shares, and the use of the proceeds from the sale of the Shares as described in
the Prospectus under the caption "Use of Proceeds") and compliance by the Fund
with its obligations under the Purchase Agreement do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xi) of the Purchase Agreement) 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, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument, known to us,
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 (except for such conflicts, breaches
or
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defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the declaration of trust or by-laws of the Fund, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Fund or any of its properties, assets or operations.
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
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 or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits 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 rendering such opinion, such counsel may rely as to matters involving
the laws of the Commonwealth of Massachusetts upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇
LLP. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP and ▇▇▇▇▇ & Wood LLP may rely, as to matter of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates
and written statements of responsible officers of and accountants for the Fund
and the Adviser and public officials. Such opinion shall not state that it is to
be governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
A-4
Exhibit B
FORM OF OPINION OF GENERAL COUNSEL TO THE
INVESTMENT ADVISER TO BE DELIVERED
PURSUANT TO SECTION 6(c)
(i) The Adviser has been duly organized as a limited partnership under
the laws of the State of Delaware, with power and authority to conduct its
business as described in the Registration Statement and in the Prospectus.
(ii) The Adviser is duly registered as an investment adviser under the
Investment Advisers Act and is not prohibited by the Investment Advisers Act or
the Investment Company 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 the giving of notice or the 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 in 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.
B-1
Exhibit C
FORM OF OPINION OF SPECIAL
PENNSYLVANIA COUNSEL TO THE FUND
PURSUANT TO SECTION 6(d)
(i) The information in the Prospectus under the caption "Taxes", to the
extent that it constitutes matters of Pennsylvania law or legal conclusions
involving matters of Pennsylvania law, has been reviewed by us and is correct in
all material respects.
(ii) Nothing has come to our attention that would lead us to believe that
the information in the Registration Statement under the caption "Investment
Objective and Policies--Special Considerations Relating to Pennsylvania
Municipal Bonds and Municipal Bonds" and in Appendix A entitled "Economic and
Other Conditions in Pennsylvania", at the time such Registration Statement or
any amendment became effective, 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 time the Prospectus was
issued, at the time any amended or supplemented prospectus was issued or at
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits 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.
C-1
Exhibit D
FORM OF ACCOUNTANTS'
COMFORT LETTER PURSUANT TO SECTION 6(e)
1. We are independent public accountants with respect to the Company
within the meaning of the 1933 Act and the 1933 Act Regulations.
2. In our opinion the financial statements audited by us and included in
the Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act, the
Investment Company Act and the Rules and Regulations.
Such accountants shall also state that 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, made 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 (A) the
unaudited financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act, the Investment
Company Act and of the Rules and Regulations applicable to unaudited interim
financial statements included in registration statements or are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, and (B) during the period from the date of the
unaudited financial statements included in the Registration Statement to a
specified date not more than three days prior to the date of the Purchase
Agreement, there was any change in the capital shares or net assets of the Fund
(other than by reason of the issuance of Common Shares in connection with the
Fund's dividend reinvestment plan, as specified in such letter) or any increase
in the long-term debt of the Fund, as compared with amounts shown on the
unaudited financial statements included in the Registration Statement, except
for changes which the Registration Statement discloses have occurred or may
occur; and in addition, they have performed other specified procedures, not
constituting an audit, with respect to certain amounts, percentages, numerical
data, financial information and financial statements appearing in the
Registration Statement, which previously have been specified by such accountants
and which shall be specified in such letter, and have compared certain of such
items with, and have found such items to be in agreement with, the accounting
and financial records of the Fund.
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