Exhibit 5(a)
BLACKROCK FUNDS
Distribution Agreement
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Agreement dated as of January 2, 2001 between BLACKROCK FUNDS, a
Massachusetts business trust (the "Company"), and BLACKROCK DISTRIBUTORS, INC.,
a Delaware corporation (the "Distributor").
WHEREAS, the Company is an open-end, diversified management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Distributor as its distributor
to provide for the sale and distribution of each class and series of shares
("shares") in each of the Company's investment portfolios (individually, a
"Fund," collectively, the "Funds") as listed on Appendix A (as such Appendix
may, from time to time, be supplemented (or amended)), and the Distributor is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth and intending to be legally bound, the parties hereto agree as follows:
1. Appointment of Distributor. The Company hereby appoints the Distributor
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as distributor of each class and series of shares in each of the Company's Funds
on the terms and for the period set forth in this Agreement. The Distributor
hereby accepts such appointment and agrees to render the services and duties set
forth in Section 3 below. In the event that the Company establishes additional
classes or investment portfolios other than the Funds listed on Appendix A with
respect to which it desires to retain the Distributor to act as distributor
hereunder, the Company shall notify the Distributor, whereupon such Appendix A
shall be supplemented (or amended) and such portfolio shall become a Fund
hereunder and shall be subject to the provisions of this Agreement to the same
extent as the Funds (except to the extent that said provisions may be modified
in writing by the Company and Distributor at the time).
2. Delivery of Documents. The Company has furnished or will furnish the
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Distributor with copies, properly certified or authenticated, of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
a. The Company's Declaration of Trust, filed with the Secretary of State
of the Commonwealth of Massachusetts on December 22, 1988, as amended (the
"Charter");
b. The Company's Amended and Restated Code of Regulations, as amended
and supplemented ("Code");
c. Resolutions of the Company's Board of Trustees authorizing the
execution and delivery of this Agreement;
d. The Company's most recent amendment to its Registration Statement
under the Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act
on Form N- 1A as filed with the Securities and Exchange Commission (the
"Commission"), relating to its Funds (the Registration Statement, as presently
in effect and as amended or supplemented from time to time, is herein called the
"Registration Statement");
e. The Company's most recent Prospectuses and Statements of Additional
Information and all amendments and supplements thereto (such Prospectuses and
Statements of Additional Information and supplements thereto, as presently in
effect and as from time to time amended and supplemented, are herein called the
"Prospectuses"); and
f. The Company's Amended and Restated Distribution and Service Plan and
related Distribution and Service Agreements relating to the Company's respective
share classes.
3. Services and Duties. The Distributor enters into the following covenants
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with respect to its services and duties:
a. The Distributor agrees to sell, as agent, from time to time during
the term of this Agreement, shares upon the terms and at the current offering
price as described in the Prospectuses. The Distributor will act only in its own
behalf as principal in making agreements with selected dealers. No broker-dealer
or other person which enters into a selling or servicing agreement with the
Distributor shall be authorized to act as agent for the Company or its Funds in
connection with the offering or sale of shares to the public or otherwise. The
Distributor shall use its best efforts to sell shares of each class or series of
each of the Funds but shall not be obligated to sell any certain number of
shares.
b. The Distributor shall prepare or review, provide advice with respect
to, and file with the federal and state agencies or other organizations as
required by federal, state, or other applicable laws and regulations, all sales
literature (advertisements, brochures and shareholder communications) for each
of the Funds and any class or series thereof.
c. In performing all of its services and duties as Distributor, the
Distributor will act in conformity with the Charter, Code, Prospectuses and
resolutions and other instructions of the Company's Board of Trustees and will
comply with the requirements of the 1933 Act, the Securities Exchange Act of
1934, the 1940 Act and all other applicable federal or state law.
d. The Distributor will bear the cost of printing and distributing any
Prospectus (including any supplement thereto) to persons who are not
shareholders; provided, however, that the Distributor shall not be obligated to
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bear the expenses incurred by the Company in connection with the preparation and
printing of any amendment to any Registration Statement or Prospectus necessary
for the continued effective registration of the shares under the
1933 Act and state securities laws and the distribution of any such document to
existing shareholders of the Company's Funds.
e. The Company shall have the right to suspend the sale of shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of shares of any Fund at any time permitted by the 1940
Act or the rules and regulations of the Commission ("Rules").
f. The Company reserves the right to reject any order for shares but
will not do so without reasonable cause.
4. Payments Relating to Distribution Plans. Payments by the Company
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relating to any distribution plan within the meaning of Rule 12b-1 under the
1940 Act (a "Plan") adopted by the Company's Board of Trustees may be payable to
the Distributor or its assignees, all in accordance with the terms and
conditions of such Plan.
5. Payments of Sales Charges. Any front-end sales charges or deferred sales
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charges payable in connection with purchases of Series A Investor Class Shares,
Series B Investor Class Shares and Series C Investor Class Shares, respectively,
shall be payable to the Distributor or its assignees, all in accordance with the
Company's Prospectus.
6. Forfeiture of Sales Charges. If any shares sold by the Distributor under
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the terms of this Agreement are redeemed or repurchased by the Fund or by the
Distributor as agent or are tendered for redemption within seven business days
after the date of confirmation of the original purchase of said shares, the
Distributor shall forfeit the amount above the net asset value received by it in
respect of such shares, provided that the portion, if any, of such amount re-
allowed by the Distributor to broker-dealers or other persons shall be repayable
to the Company only to the extent recovered by the Distributor from the broker-
dealer or other person concerned. The Distributor shall include in the form of
agreement which such broker-dealers and other persons a corresponding provision
for the forfeiture by them of their concession with respect to shares sold by
them or their principals and redeemed or repurchased by the Company or by the
Distributor as agent (or tendered for redemption) within seven business days
after the date of confirmation of such initial purchases.
7. Limitations of Liability. The Distributor shall not be liable for any
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error of judgment or mistake of law or for any loss suffered by the Company in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
8. Proprietary and Confidential Information. The Distributor agrees on
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behalf of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and its Funds and prior, present or potential shareholders, and not to
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Distributor may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Company.
9. Indemnification.
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a. The Company represents and warrants to the Distributor that the
Registration Statement contains, and that the Prospectuses at all times will
contain, all statements required by the 1933 Act and the Rules of the
Commission, will in all material respects conform to the applicable requirements
of the 1933 Act and the Rules and will not include 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, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
in this Section 9 shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Distributor or either of the Company's co-administrators expressly
for use in the Registration Statement or Prospectuses.
b. The Company on behalf of each Fund agrees that each Fund will
indemnify, defend and hold harmless the Distributor, its several officers, and
directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, from and against any losses, claims, damages or
liabilities, joint or several, to which the Distributor, its several officers,
and directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses or in any application or other document
executed by or on behalf of the Company with respect to such Fund or are based
upon information furnished by or on behalf of the Company with respect to such
Fund filed in any state in order to qualify the shares under the securities or
blue sky laws thereof ("Blue Sky application") or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Distributor, its several officers, and directors, and any
person who controls the Distributor within the meaning of Section 15 of the 1933
Act, for any legal or other expenses reasonably incurred by the Distributor, its
several officers, and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
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that the Company shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
the Prospectus or any Blue Sky application with respect to such Fund in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Distributor or either of the Company's co-administrators
specifically for inclusion therein or arising out of the failure of the
Distributor to deliver a current Prospectus.
c. The Company on behalf of each Fund shall not indemnify any person
pursuant to this Section 9 unless the court or other body before which the
proceeding was brought has rendered a final decision on the merits that such
person was not liable by reason of his or her willful misfeasance, bad faith or
gross negligence in the performance of his or her duties, or his or her reckless
disregard of any obligations and duties, under this Agreement ("disabling
conduct") or, in the absence of such a decision, a reasonable determination
(based upon a review of the facts) that such person was not liable by reason of
disabling conduct has been made by the vote of a majority of a quorum of the
trustees of the Company who are neither "interested parties" (as defined in the
0000 Xxx) nor parties to the proceeding, or by independent legal counsel in a
written opinion.
d. The Distributor will indemnify and hold harmless the Company and each
of its Funds and its several officers and trustees, and any person who controls
the Company within the meaning of Section 15 of the 1933 Act, from and against
any losses, claims, damages or liabilities, joint or several, to which any of
them may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or any Blue Sky application, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company or any of its several officers
and trustees by or on behalf of the Distributor or either of the Company's co-
administrators specifically for inclusion therein, and will reimburse the
Company and its several officers, trustees and such controlling persons for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
e. The obligations of each Fund under this Section 9 shall be the
several (and not the joint or joint and several) obligation of each Fund.
10. Duration and Termination. This Agreement shall become effective upon
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its execution as of the date first written above and, unless sooner terminated
as provided herein, shall continue until March 31, 2002. Thereafter, if not
terminated, this Agreement shall continue automatically for successive terms of
one year, provided that such continuance is specifically approved at least
annually (a) by a vote of a majority of those members of the Company's Board of
Trustees who are not parties to this Agreement or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Company's Board of Trustees or by vote of a "majority
of the outstanding voting securities" of the Company; provided, however, that
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this Agreement may be terminated by the
Company at any time, without the payment of any penalty, by vote of a majority
of the entire Board of Trustees or by a vote of a "majority of the outstanding
voting securities" of the Company on 60- days' written notice to the
Distributor, or by the Distributor at any time, without the payment of any
penalty, on 90-days' written notice to the Company. This Agreement will
automatically and immediately terminate in the event of its "assignment." (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be
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changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the xxxxx against which an enforcement of the change, waiver,
discharge or termination is sought.
12. Notices. Notices of any kind to be given to the Company hereunder by
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the Distributor shall be in writing and shall be duly given if mailed or
delivered to the Company at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
with a copy to Xxxx Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other address or to such individual as shall be so specified by the Company
to the Distributor. Notices of any kind to be given to the Distributor hereunder
by the Company shall be in writing and shall be duly given if mailed or
delivered to BlackRock Distributors, Inc., 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX
00000, Attention: Xxxx X. Xxxxxxxx, or at such other address or to such other
individual as shall be so specified by the Distributor to the Company.
13. Miscellaneous.
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a. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
b. The names "BlackRock Funds" and "Trustees of BlackRock Funds" refer
specifically to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated December 22, 1988, which is hereby referred to and a copy of which
is on file at the office of the Secretary of the Commonwealth of Massachusetts
and at the principal office of the Company. The obligations of "BlackRock Funds"
entered into in the name or on behalf thereof by any of the Trustees, officers,
representatives or agents are not made individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders, representatives or
agents of the Company personally, but bind only the Trust property (as defined
in the Declaration of Trust), and all persons dealing with any Fund or class of
shares of the Company must look solely to the Trust property belonging to such
Fund or class for the enforcement of any claims against the Company.
14. Counterparts. This Agreement may be executed in counterparts, all of
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which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
BLACKROCK FUNDS
By: _____________________
Title:
BLACKROCK DISTRIBUTORS, INC.
By:_____________________
Title:
