Auction Rate Municipal Preferred Stock
THE BLACKROCK[ ] TRUST INC.
[ ] Shares, Series [ ]
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
March [ ], 2000
XXXXXXX XXXXX XXXXXX INC.
[ ]
c/o XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The BlackRock [ ] Trust Inc., a [ ]
(the "Trust"), proposes, upon the terms and conditions set forth herein, to
issue and sell an aggregate of [ ] shares of its Auction Rate Municipal
Preferred Stock, Series [ ], each with a liquidation preference of
$25,000 per share (the "Shares"). The Shares will be authorized by, and
subject to the terms and conditions of, the Articles Supplementary of the
Trust, dated [ ], 2000, (the "Articles Supplementary") and the Articles of
Incorporation of the Trust dated as of [ ], as amended by the Articles
of Amendment dated [ ] and June [ ] (the "Articles of Incorporation"),
in the forms filed as exhibits to the Registration Statement referred to in
Section 1 of this agreement, as the same may be amended from time to time.
The Trust and its investment adviser, BlackRock Advisors, Inc. (the "Adviser"),
wish to confirm as follows their agreement with Xxxxxxx Xxxxx Xxxxxx Inc.,
[ ] (the "Underwriters"), in connection with the purchase of the Shares
by the Underwriters.
Collectively, the Investment Advisory Agreement dated as of
[ ] between the Trust and the Adviser (the "Advisory Agreement"), the
Administration Agreement dated as of [ ] between the Trust and [ ],
the Custodian Contract dated as of [ ] between the Trust and State
Street Bank and Trust Company, the Registrar, Transfer Agency and Service
Agreement dated as of [ ] between the Trust and State Street Bank and
Trust Company and the Auction Agent Agreement dated as of [______________]
between the Trust and Bankers Trust Company are hereinafter referred to as
the "Trust Agreements." This Underwriting Agreement is hereinafter referred
to as the "Agreement."
For purposes of this Agreement, references to a
post-effective amendment to the Registration Statement (defined below)
shall only be deemed to refer to those amendments which are filed with the
Commission before the later of (i) one year from the date of this Agreement
or (ii) the date on which a prospectus relating to the Shares is no longer
required by the 1933 Act (defined below) to be delivered in connection with
any sales by any Underwriter or dealer.
1. Registration Statement and Prospectus. The Trust has
prepared and filed in accordance with the provisions of the Securities Act
of 1933, as amended (the "1933 Act"), the Investment Company Act of 1940,
as amended (the "1940 Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated under the
1933 Act (the "1933 Act Rules and Regulations") and the 1940 Act (the "1940
Act Rules and Regulations" and, together with the 1933 Act Rules and
Regulations, the "Rules and Regulations"), a registration statement on Form
N-2, [as amended by Pre-Effective Amendments Nos. 1 and 2] (File Nos. 333-[
] and 811-[ ]) (the "registration statement"), including a prospectus
relating to the Shares. The Trust also has filed a notification of
registration of the Trust as an investment company under the 1940 Act on
Form N-8A (the "1940 Act Notification"). The term "Registration Statement"
as used in this Agreement means the registration statement (including all
financial schedules and exhibits), as amended at the time it becomes
effective under the 1933 Act or, if the registration statement became
effective under the 1933 Act prior to the execution of this Agreement, as
amended or supplemented at the time it became effective, prior to the
execution of this Agreement, and includes any information deemed to be
included by Rule 430A under the 1933 Act Rules and Regulations. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed under the 1933 Act
and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means
the registration statement as amended by said post-effective amendment. If
the Trust has filed an abbreviated registration statement to register an
additional amount of Shares pursuant to Rule 462(b) under the 1933 Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall include such Rule 462 Registration
Statement. The term "Prospectus" as used in this Agreement means the
prospectus and statement of additional information in the forms included in
the Registration Statement or, if the prospectus and statement of
additional information included in the Registration Statement omit
information in reliance on Rule 430A under the 1933 Act Rules and
Regulations and such information is included in a prospectus and statement
of additional information filed with the Commission pursuant to Rule 497(h)
under the 1933 Act, the term "Prospectus" as used in this Agreement means
the prospectus and statement of additional information in the forms
included in the Registration Statement as supplemented by the addition of
the information contained in the prospectus filed with the Commission
pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in this
Agreement means the prospectus and statement of additional information
subject to completion in the forms included in the registration statement
at the time of filing of Pre-Effective Amendment No. 1 to the registration
statement with the Commission on [ ], 2000, and as such prospectus and
statement of additional information shall have been amended from time to
time prior to the date of the Prospectus. The terms "Registration
Statement," "Prospectus" and "Prepricing Prospectus" shall also include any
financial statements and other information incorporated by reference
therein.
The Trust has furnished you with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus.
2. Agreements to Sell and Purchase. The Trust hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell
to the Underwriters and, upon the basis of the representations, warranties
and agreements of the Trust and the Adviser herein contained and subject to
all the terms and conditions set forth herein, each Underwriter agrees
severally and not jointly to purchase from the Trust, at a purchase price
of $________ per share, the number of Shares set forth opposite the name of
such Underwriter in Schedule I hereto.
3. Terms of Public Offering. The Trust and the Adviser have
been advised by you that the Underwriters propose to make a public offering
of their respective Shares as soon after the Registration Statement and
this Agreement have become effective as in your judgment is advisable and
initially to offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to
the Underwriters of and payment for the Shares shall be made at the office
of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or
through the facilities of the Depository Trust Company or another mutually
agreeable facility, at 9:30 A.M., New York City time, on [ ], 2000 (the
"Closing Date"). The place of closing for the Shares and the Closing Date
may be varied by agreement between you and the Trust.
Certificates for the Shares purchased hereunder shall be
registered in such names and in such denominations as you shall request
prior to 9:30 A.M., New York City time, on the second business day
preceding the Closing Date. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M.,
New York City time, on the business day next preceding the Closing Date.
The certificates evidencing the Shares purchased hereunder shall be
delivered to you on the Closing Date, through the facilities of The
Depository Trust Company, against payment of the purchase price therefor in
immediately available funds.
5. Agreements of the Trust and the Adviser. The Trust and
the Adviser, jointly and severally, agree with the several Underwriters as
follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective under the 1933
Act before the offering of the Shares may commence, the Trust will use its
best efforts to cause the Registration Statement or such post-effective
amendment to become effective under the 1933 Act and will advise you
promptly and, if requested by you, will confirm such advice in writing when
the Registration Statement or such post-effective amendment has become
effective.
(b) Except as otherwise stated in (iii) below, for a period
of five years from the date hereof, the Trust (in the case of (i), (ii),
(iii)(A) and (iv) below) and the Adviser (in the case of (iii)(B) below)
will advise you promptly and, if requested by you, will confirm such advice
in writing: (i) of any request made by the Commission for amendment of or a
supplement to the Registration Statement, any Prepricing Prospectus or the
Prospectus (or any amendment or supplement to any of the foregoing) or for
additional information, (ii) of the issuance by the Commission, the
National Association of Securities Dealers, Inc. (the "NASD"), any state
securities commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official of any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending the
use of the Prospectus or any Prepricing Prospectus, or any sales material
(as hereinafter defined), of any notice pursuant to Section 8(e) of the
1940 Act, of the suspension of qualification of the Shares for offering or
sale in any jurisdiction, or the initiation of any proceeding for any such
purposes, (iii) of receipt by (A) the Trust, any affiliate of the Trust or
any representative or attorney of the Trust of any other material
communication adverse to the Trust from the Commission or (B) the Trust,
the Adviser, any affiliate of the Trust or the Adviser or any
representative or attorney of the Trust or the Adviser of any other
material communication adverse to the Trust from the Commission, the NASD,
any state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official relating to the
Trust (if such communication relating to the Trust is received by such
person within three years after the date of this Agreement), the
Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any sales material (as herein defined) (or any
amendment or supplement to any of the foregoing) or this Agreement or any
of the Trust Agreements and (iv) within the period of time referred to in
paragraph (f) below, of any material adverse change in the condition
(financial or other), general affairs, assets or results of operations of
the Trust or any event which should reasonably be expected to have a
material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement and the Advisory Agreement (in either
case, other than as a result of changes in market conditions generally or
the market for municipal securities generally) or of the happening of any
other event which makes any statement of a material fact made in the
Registration Statement or the Prospectus, or any Prepricing Prospectus (or
any amendment or supplement to any of the foregoing) untrue or which
requires the making of any additions to or changes in the Registration
Statement or the Prospectus, or any Prepricing Prospectus (or any amendment
or supplement to any of the foregoing) in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations to be
stated therein or necessary in order to make the statements therein (in the
case of a prospectus, in light of the circumstances under which they were
made) not misleading, or of the necessity to amend or supplement the
Registration Statement, the Prospectus, or any Prepricing Prospectus (or
any amendment or supplement to any of the foregoing) to comply with the
1933 Act, the 1940 Act, the Rules and Regulations or any other law or order
of any court or regulatory body. If at any time the Commission shall issue
any order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any sales material
(as herein defined) (or any amendment or supplement to any of the
foregoing) or suspending the qualification of the Shares for offering or
sale in any jurisdiction, the Trust and the Adviser will use their
reasonable best efforts to obtain the withdrawal of such order at the
earliest possible time. If at any time the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or administrative
agency or any official shall issue any order suspending the effectiveness
of the Registration Statement, prohibiting or suspending the use of the
Prospectus or any sales material (as herein defined) (or any amendment or
supplement to any of the foregoing) or suspending the qualification of the
Shares for offering or sale in any jurisdiction, the Adviser will use its
reasonable best efforts to obtain the withdrawal of such order at the
earliest possible time.
(c) The Trust will furnish to you, without charge, three
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements
and all exhibits thereto, and will also furnish to you, without charge,
such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto, but without exhibits, as you may
reasonably request.
(d) The Trust will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus, or any sales material (as herein defined), of which you shall
not previously have been advised or to which you shall reasonably object
after being so advised. So long as, in the opinion of counsel for the
Underwriters, a Prospectus is required by the 1933 Act to be delivered in
connection with sales by any Underwriter or any dealer, the Adviser will
deliver a copy of any information, documents or reports filed by the Trust
pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act"), to you prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement,
the Trust has delivered to you, without charge, in such quantities as you
have requested, copies of each form of the Prepricing Prospectus. The Trust
consents to the use, in accordance with the provisions of the 1933 Act and
with the state securities or blue sky laws of the jurisdictions in which
the Shares are offered by the several Underwriters and by dealers, prior to
the date of the Prospectus, of each Prepricing Prospectus so furnished by
the Trust.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as
in the opinion of counsel for the Underwriters a prospectus is required by
the 1933 Act to be delivered in connection with sales by any Underwriter or
any dealer, the Trust will promptly deliver to each Underwriter and each
dealer, without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as you may reasonably request. The Trust
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the 1933 Act and with the
state securities or blue sky laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares
and for such period of time thereafter as the Prospectus is required by the
1933 Act to be delivered in connection with sales by any Underwriter or any
dealer. If during such period of time any event shall occur that is
required to be set forth in the Registration Statement or the Prospectus
(as then amended or supplemented) or is required to be set forth therein in
order to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading, or
if it is necessary to supplement or amend the Registration Statement or the
Prospectus to comply with the 1933 Act, the 1940 Act, or the Rules and
Regulations, the Trust will forthwith notify you of such event, prepare
and, subject to the provisions of paragraph (d) above, promptly file with
the Commission an appropriate supplement or amendment thereto, and will
promptly furnish to the Underwriters and dealers, without charge, a
reasonable number of copies thereof. In the event that the Trust and you
agree that the Registration Statement or the Prospectus should be amended
or supplemented, the Trust (if it is required by law to do so) will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement or will otherwise
appropriately disseminate the required information.
(g) The Trust will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by dealers
under the securities or blue sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Trust be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the Shares,
in any jurisdiction where it is not now so subject.
(h) The Trust will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period ending not later than 17 months after the effective
date of the Registration Statement as soon as practicable after the end of
such period, which earnings statement shall satisfy the provisions of
Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and
Regulations.
(i) During the period of three years hereafter, the Adviser
will furnish to you (i) as soon as available, a copy of each proxy
statement, annual and semi-annual report of the Trust mailed to
shareholders or filed with the Commission or furnished to the New York
Stock Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from
time to time such other information concerning the Trust as you may
reasonably request.
(j) If this Agreement shall be terminated by the Trust or
the Adviser after execution pursuant to any provisions hereof or if this
Agreement shall be terminated by the Underwriters because of (i) any
failure or refusal on the part of the Trust or the Adviser to comply with
any material term or fulfill any material condition of this Agreement
required to be complied with or fulfilled by them, or (ii) the
non-occurrence of any other condition contained in Section 9 of this
Agreement, the Trust and the Adviser, jointly and severally, agree to
reimburse the Underwriters for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters) reasonably
incurred by the Underwriters in connection herewith.
(k) The Trust will apply the net proceeds from the sale of
the Shares in accordance with the description set forth in the Prospectus
and in such a manner as to comply with the investment objectives, policies
and restrictions of the Trust as described in the Prospectus, as the same
may be amended from time to time.
(l) The Trust will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of
the 1933 Act Rules and Regulations, whichever is applicable or, if
applicable, will timely file the certification permitted by Rule 497(j) of
the 1933 Act Rules and Regulations and will advise you of the time and
manner of such filing.
(m) Except as provided in this Agreement, the Trust will not
sell, contract to sell or otherwise dispose of any of its preferred shares
of the same series as the Shares or any securities convertible into or
exercisable or exchangeable for its preferred shares of the same series as
the Shares, or grant any options or warrants to purchase its preferred
shares of the same series as the Shares, for a period of 180 days after the
date of the Prospectus, without the prior written consent of Xxxxxxx Xxxxx
Xxxxxx Inc.
(n) The Trust intends to direct the investment of the
proceeds from the offering of the Shares so as to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code") to qualify as a regulated investment company under the
Code.
(o) The Trust and the Adviser will use their reasonable best
efforts to perform all of the agreements required of them and discharge all
conditions of theirs to closing as set forth in this Agreement.
6. Representations and Warranties of the Trust and the
Adviser. The Trust and the Adviser, jointly and severally, represent and
warrant to each Underwriter that:
(a) The Commission has not issued any order preventing or
suspending the use of the Prospectus.
(b) The registration statement in the form in which it
became or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the Prospectus
and any supplement or amendment thereto when filed with the Commission
under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
Notification when originally filed with the Commission and any amendment or
supplement thereto when filed with the Commission, complied or will comply
in all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations, as applicable, and the Prospectus and
the registration statement (and any supplement or amendment to either of
them) did not or will not at any such times 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 (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the registration statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Trust in writing by or on
behalf of any Underwriter through you expressly for use therein.
(c) All the shares of capital stock of the Trust outstanding
as of the date hereof have been duly authorized and validly issued, are
fully paid and nonassessable and are free of any preemptive or similar
rights; the Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and free of
any preemptive or similar rights that entitle or will entitle any person to
acquire any Shares upon the issuance thereof by the Trust, and will conform
in all material respects to the description thereof in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them); and the capitalization of the Trust conforms in all material
respects to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them).
(d) The Trust is a corporation duly organized and validly
existing in good standing under the laws of the State of Maryland with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification, except
where the failure to so register or qualify does not have a material
adverse effect on the condition (financial or other), general affairs,
assets or results of operations of the Trust; and the Trust has no
subsidiaries.
(e) There are no legal or governmental proceedings pending
or, to the knowledge of the Trust or the Adviser, threatened, against the
Trust, or to which the Trust or any of its properties is subject, that are
required to be described in the Registration Statement or the Prospectus
(and any amendment or supplement to either of them) but are not described
as required, and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus (and any amendment or supplement to either of
them) or to be filed as an exhibit to the Registration Statement that are
not described or filed as required by the 1933 Act, the 1940 Act or the
Rules and Regulations.
(f) The Trust is not in violation of the Articles
Supplementary, the Articles of Incorporation or its bylaws (the "Bylaws"),
or other organizational documents or of any law, ordinance, administrative
or governmental rule or regulation applicable to the Trust or of any decree
of the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or governmental agency, body
or official having jurisdiction over the Trust, or in default in the
performance of any material obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Trust
is a party or by which it or any of its properties may be bound, except
where such violation or default does not have a material adverse effect on
the condition (financial or other), general affairs, assets or results of
operations of the Trust.
(g) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or any of the Trust
Agreements by the Trust, nor the consummation by the Trust of the
transactions contemplated hereby or thereby (A) requires any consent,
approval, authorization or other order of, or registration or filing with,
the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official having
jurisdiction over the Trust (except such as may have been obtained prior to
the date hereof and such as may be required for compliance with the state
securities or blue sky laws of various jurisdictions which have been or
will be effected in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default
under, the Articles Supplementary, the Articles of Incorporation, the
Bylaws or other organizational documents of the Trust or (B) conflicts or
will conflict with or constitutes or will constitute a material breach of,
or a default under, any material agreement, indenture, lease or other
instrument to which the Trust is a party or by which it or any of its
properties may be bound, or materially violates or will materially violate
any material statute, law, regulation or judgment, injunction, order or
decree applicable to the Trust or any of its properties, or will result in
the creation or imposition of any material lien, charge or encumbrance upon
any property or assets of the Trust pursuant to the terms of any agreement
or instrument to which it is a party or by which it may be bound or to
which any of its property or assets is subject. As of the date hereof, the
Trust is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(h) The accountants, Deloitte & Touche LLP, who have
certified or shall certify the financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them) are independent public
accountants as required by the 1933 Act, the 1940 Act and the Rules and
Regulations.
(i) The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), present fairly the financial position of the Trust on
the basis stated or incorporated by reference in the Registration Statement
at the respective dates or for the respective periods to which they apply;
and such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein.
(j) The execution and delivery of, and the performance by
the Trust of its obligations under, this Agreement and the Trust Agreements
have been duly and validly authorized by the Trust, and this Agreement and
the Trust Agreements have been duly executed and delivered by the Trust
and, assuming due authorization, execution and delivery by the other
parties thereto, each constitutes the valid and legally binding agreement
of the Trust, enforceable against the Trust in accordance with its terms,
except as rights to indemnity and contribution hereunder and thereunder may
be limited by federal or state securities laws, and subject to the
qualification that the enforceability of the Trust's obligations hereunder
and thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general equitable principles
whether enforcement is considered in a proceeding in equity or at law.
(k) Except as disclosed in or contemplated by the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them), subsequent to the respective dates as of which such
information is given in the Registration Statement and the Prospectus (or
any amendment or supplement to either of them), the Trust has not incurred
any material liability or material obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that
is material to the Trust, and there has not been any change in the
capitalization, or material increase in the short-term debt or long-term
debt, of the Trust, or any material adverse change, or any development
involving a prospective material adverse change, in the condition
(financial or other), general affairs, assets or results of operations of
the Trust, whether or not arising in the ordinary course of business (other
than as a result of changes in market conditions generally or the market
for municipal securities generally).
(l) The Trust has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of
the Shares, will not distribute any offering material in connection with
the offering and sale of the Shares other than the Registration Statement,
the Prepricing Prospectus, the Prospectus or other materials permitted by
the 1933 Act, the 1940 Act or the Rules and Regulations.
(m) The Trust has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto),
subject to such qualifications as may be set forth in the Prospectus.
(n) The Trust maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(o) No holder of any security of the Trust has any right to
require registration of any security of the Trust because of the filing of
the registration statement or consummation of the transactions contemplated
by this Agreement.
(p) The Trust, subject to the registration statement having
been declared effective and the filing of the Prospectus under Rule 497
under the 1933 Act Rules and Regulations, has taken all required action
under the 1933 Act, the 1940 Act and the Rules and Regulations to make the
public offering and consummate the sale of the Shares as contemplated by
this Agreement.
(q) The Trust is registered under the 1940 Act and the 1940
Act Rules and Regulations as a diversified, closed-end management
investment company and the 1940 Act Notification has been duly filed with
the Commission and, at the time of filing thereof and any amendment or
supplement thereto, conformed in all material respects with all applicable
provisions of the 1940 Act and the 1940 Act Rules and Regulations; no order
of suspension or revocation of such registration under the 1940 Act and the
1940 Act Rules and Regulations has been issued or proceedings therefor
initiated or, to the knowledge of the Trust or the Adviser, threatened by
the Commission. The provisions of the Articles Supplementary, the Articles
of Incorporation and Bylaws, and the investment policies and restrictions
described in the Registration Statement and the Prospectus, comply in all
material respects with the requirements of the 1940 Act and the 1940 Act
Rules and Regulations.
(r) All advertising, sales literature or other promotional
material (including "prospectus wrappers") intended for public distribution
and authorized in writing by or prepared by the Trust for use in connection
with the offering and sale of the Shares (collectively, "sales material")
complied and comply in all material respects with the applicable
requirements of the 1933 Act, the 1933 Act Rules and Regulations and the
rules and interpretations of the NASD and no such sales material, when read
together with the Prospectus, contained or contains an untrue statement of
a material fact or omitted or omits to state a 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.
(s) Each of the Trust Agreements complies in all material
respects with all applicable provisions of the 1933 Act, the 1940 Act, the
Rules and Regulations, the Investment Advisers Act of 1940, as amended (the
"Advisers Act") and the rules and regulations of the Commission promulgated
under the Advisers Act (the "Advisers Act Rules and Regulations").
(t) The Trust's common shares are duly listed on the NYSE.
(u) The Shares have been, or prior to the Closing Date will
be, assigned a rating of 'aaa' by Xxxxx'x Investors Service, Inc.
("Moody's") and "AAA" by Standard & Poor's Rating Services ("S&P").
(v) In accordance with the Certificate of Incorporation, the
Trust has received written confirmation from each of Moody's and S&P that
the issuance of the Shares will not impair the ratings currently assigned
by each of them to any of the Trust's currently outstanding preferred
shares.
7. Representations and Warranties of the Adviser. The
Adviser represents and warrants to each Underwriter that:
(a) The Adviser is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them), and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or to qualify does
not have a material adverse effect on the ability of the Adviser to perform
its obligations under this Agreement and the Advisory Agreement.
(b) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the
1940 Act Rules and Regulations from acting under the Advisory Agreement for
the Trust as contemplated by the Prospectus (or any amendment or supplement
thereto). There does not exist any proceeding which should reasonably be
expected to have a material adverse affect on the registration of the
Adviser with the Commission.
(c) There are no legal or governmental proceedings pending
or, to the knowledge of the Adviser, threatened against the Adviser, that
are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them) but are not
described as required or that should reasonably be expected to have a
material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement and the Advisory Agreement.
(d) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreement by the Adviser, nor the consummation by
the Adviser of the transactions contemplated hereby or thereby (A) requires
the Adviser to obtain any consent, approval, authorization or other order
of, or registration or filing with, the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator,
any court, regulatory body, administrative agency or other governmental
body, agency or official having jurisdiction over the Adviser or conflicts
or will conflict with or constitutes or will constitute a breach of or a
default under, the certificate of incorporation or bylaws, or other
organizational documents, of the Adviser or (B) conflicts or will conflict
with or constitutes or will constitute a material breach of or a default
under, any material agreement, indenture, lease or other instrument to
which the Adviser is a party or by which the Adviser or any of its
properties may be bound, or materially violates or will materially violate
any material statute, law, regulation or judgment, injunction, order or
decree applicable to the Adviser or any of its properties or will result in
the creation or imposition of any material lien, charge or encumbrance upon
any property or assets of the Adviser pursuant to the terms of any
agreement or instrument to which it is a party or by which it may be bound
or to which any of the property or assets of the Adviser is subject, except
in any case under clause (A) or (B) as should not reasonably be expected to
have a material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement and the Advisory Agreement. The Adviser is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.
(e) The execution and delivery of, and the performance by
the Adviser of its obligations under, this Agreement and the Advisory
Agreement have been duly and validly authorized by the Adviser, and this
Agreement and the Advisory Agreement have been duly executed and delivered
by the Adviser and, assuming due authorization, execution and delivery by
the other parties thereto, each constitutes the valid and legally binding
agreement of the Adviser, enforceable against the Adviser in accordance
with its terms, except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws, and subject to the
qualification that the enforceability of the Trust's obligations hereunder
and thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general equitable principles
whether enforcement is considered in a proceeding in equity or at law.
(f) The Adviser has the financial resources necessary for
the performance of its services and obligations as contemplated in the
Prospectus (or any amendment or supplement thereto) and under this
Agreement and the Advisory Agreement.
(g) The description of the Adviser in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them) complied and comply in all material respects with the provisions of
the 1933 Act, the 1940 Act, the Advisers Act, the Rules and Regulations and
the Advisers Act 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
(in the case of the Prospectus, in light of the circumstances under which
they were made) not misleading.
(h) The Advisory Agreement complies in all material respects
with all applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
(i) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them),
subsequent to the respective dates as of which such information is given in
the Registration Statement and the Prospectus (or any amendment or
supplement to either of them), there has not occurred any event which
should reasonably be expected to have a material adverse effect on the
ability of the Adviser to perform its obligations under this Agreement and
the Advisory Agreement.
(j) The Adviser has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto),
except to the extent that the failure to so have should not reasonably be
expected to have a material adverse effect on the ability of the Adviser to
perform its obligations under the Advisory Agreement; the Adviser has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the Adviser under any such permit,
except where the revocation, termination or impairment of the Adviser's
rights under such permits should not reasonably be expected to have a
material adverse effect on the ability of the Adviser to perform its
obligations under the Advisory Agreement.
(k) Except as stated in this Agreement and in the Prospectus
(and in any amendment or supplement thereto), the Adviser has not taken,
nor will it take, directly or indirectly, any action designed to or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any securities issued by the Trust to
facilitate the sale or resale of the Shares, and the Adviser is not aware
of any such action taken or to be taken by any affiliates of the Adviser
who are not underwriters or dealers participating in the offering of the
Shares.
(l) Each Prepricing Prospectus complied when filed with the
Commission in all material respects with the provisions of the 1933 Act,
the 1940 Act and the Rules and Regulations. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus or
the Prospectus.
8. Indemnification and Contribution. (a) The Trust and the
Adviser, jointly and severally, agree to indemnify and hold harmless you
and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation),
joint or several, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prepricing
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with information relating to
any Underwriter furnished in writing to the Trust by or on behalf of any
Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a)
with respect to any Prepricing Prospectus shall not inure to the benefit of
any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such Underwriter to any
person if a copy of the Prospectus shall not have been delivered or sent to
such person within the time required by the 1933 Act and the 1933 Act Rules
and Regulations, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the
Trust has delivered the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which
the Trust or the Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in
respect of which indemnity may be sought against the Trust or the Adviser,
such Underwriter or such controlling person shall promptly notify the Trust
or the Adviser, and the Trust or the Adviser may assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and
to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Trust or the Adviser have agreed in writing to pay
such fees and expenses, (ii) the Trust and the Adviser have failed to
assume the defense and employ counsel, or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Trust or the
Adviser and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and
the Trust or the Adviser by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Trust and the
Adviser shall not have the right to assume the defense of such action, suit
or proceeding on behalf of such Underwriter or such controlling person). It
is understood, however, that the Trust and the Adviser shall, in connection
with any one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests with
you or among themselves, which firm shall be designated in writing by you,
and that all such fees and expenses shall be reimbursed as they are
incurred. The Trust and the Adviser shall not be liable for any settlement
of any such action, suit or proceeding effected without their written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the
Trust and the Adviser agree to indemnify and hold harmless any Underwriter,
to the extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Trust and the Adviser, their trustees and
directors, any officers who sign the Registration Statement, and any person
who controls the Trust or the Adviser within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Trust and the Adviser to each Underwriter, but
only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use
in the Registration Statement, the Prospectus or any Prepricing Prospectus,
or any amendment or supplement thereto. If any action, suit or proceeding
shall be brought against the Trust or the Adviser, any of their trustees
and directors, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any Prepricing Prospectus, or
any amendment or supplement thereto, and in respect of which indemnity may
be sought against any Underwriter pursuant to this paragraph (c), such
Underwriter shall have the rights and duties given to the Trust and the
Adviser by paragraph (b) above (except that if the Trust or the Adviser
shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be
at such Underwriter's expense), and the Trust and the Adviser, their
trustees and directors, any such officer, and any such controlling person
shall have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any
liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Trust and the Adviser on the one hand
(treated jointly for this purpose as one person) and the Underwriters on
the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above 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 Trust
and the Adviser on the one hand (treated jointly for this purpose as one
person) and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Trust and the Adviser on the one hand
(treated jointly for this purpose as one person) and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Trust bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The Trust and the Adviser agree that as between the
Trust, and the Adviser (and solely for the purpose of allocating among such
parties the total amount to be contributed by each of them to one another
and without prejudice to the right of the Underwriters to receive
contributions from the Trust and the Adviser under this Section 8(d) on a
joint and several basis) the relative benefits received by the Trust, on
the one hand, and the Adviser on the other hand, shall be deemed to be in
the same proportion that the total net proceeds from the offering (before
deducting expenses) received by the Trust bear to the present value of the
future revenue stream to be generated by the advisory fee to be paid by the
Trust to the Adviser pursuant to the Advisory Agreement. The relative fault
of the Trust and the Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Trust and the Adviser on the one hand (treated jointly for this purpose as
one person) or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Trust, the Adviser and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section
8 were determined by a pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
and expenses referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which such
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of 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 1933 Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I
hereto (or such numbers of Shares increased as set forth in Section 11
hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses
are incurred. The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Trust and the
Adviser set forth in this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, the Trust,
the Adviser, their trustees, directors or officers, or any person
controlling the Trust or the Adviser, (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or
to the Trust, the Adviser, their trustees, directors or officers, or any
person controlling the Trust or the Adviser, shall be entitled to the
benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 8.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a
post-effective amendment thereto to be declared effective before
the offering of the Shares may commence, the registration statement
or such post-effective amendment shall have become effective not
later than 5:30 P.M., New York City time, on the date hereof, or at
such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 497 and 430A under
the 1933 Act and the 1933 Act Rules and Regulations shall have been
timely made; no stop order suspending the effectiveness of the
Registration Statement or order pursuant to Section 8(e) of the
1940 Act shall have been issued and no proceeding for those
purposes shall have been instituted or, to the knowledge of the
Trust, the Adviser or any Underwriter, threatened by the
Commission, and any request of the Commission for additional
information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with to your
reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change or any development
involving a prospective change in or affecting the condition
(financial or other), business, general affairs, properties, net
assets, or results of operations of the Trust or the Adviser not
contemplated by the Prospectus, which in your opinion, would
materially adversely affect the market for the Shares, or (ii) any
event or development relating to or involving the Trust or the
Adviser or any officer, trustee or director of the Trust or the
Adviser which makes any statement made in the Prospectus untrue or
which, in the opinion of the Trust and its counsel or the
Underwriters and their counsel, requires the making of any addition
to or change in the Prospectus in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations
or any other law to be stated therein or necessary in order to make
the statements therein not misleading, if amending or supplementing
the Prospectus to reflect such event or development would, in your
opinion, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion
of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Trust,
dated the Closing Date and addressed to you, in the form attached
hereto as Exhibit A.
(d) You shall have received on the Closing Date an opinion
of Xxxxxx Xxxxxxxx, Esq., counsel for the Adviser, dated the
Closing Date and addressed to you, in form and substance
satisfactory to you and to the effect that:
(i) Based on certificates of the Secretary of State
of the State of Delaware, the Adviser is a corporation duly
incorporated and validly existing in good standing under the
laws of the State of Delaware, with all necessary corporate
power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or
supplement to either of them). Based on certificates of the
applicable secretaries of state, the Adviser is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires
such registration or qualification, except where the failure
to so register and qualify does not have a material adverse
effect on the ability of the Adviser to perform its
obligations under this Agreement and the Advisory Agreement.
(ii) The Adviser is duly registered with the
Commission as an investment adviser under the Advisers Act
and is not prohibited by the Advisers Act, the Advisers Act
Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Advisory Agreement for
the Trust as contemplated by the Prospectus (or any
amendment or supplement thereto); and, to the best knowledge
of such counsel after reasonable inquiry, there does not
exist any proceeding which should reasonably be expected to
adversely affect the registration of the Adviser with the
Commission;
(iii) The Adviser has corporate power and authority
to enter into this Agreement and the Advisory Agreement, and
this Agreement and the Advisory Agreement have been duly
authorized, executed and delivered by the Adviser and the
Advisory Agreement is a valid and legally binding agreement
of such Adviser, enforceable against the Adviser in
accordance with its terms except as rights to indemnity and
contribution hereunder and thereunder may be limited by
Federal or state securities laws or principles of public
policy and subject to the qualification that the
enforceability of the Adviser's obligations thereunder may
be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general
equitable principles whether enforcement is considered in a
proceeding in equity or at law;
(iv) Neither the execution, delivery or performance
of this Agreement or the Advisory Agreement by the Adviser
which is a party thereto, nor the consummation by the
Adviser of the transactions contemplated hereby and thereby
(A) conflicts or will conflict with, or constitutes or will
constitute a breach of or default under, the certificate of
incorporation or bylaws, or other organizational documents,
of the Adviser or (B) conflicts or will conflict with, or
constitutes or will constitute a material breach of or
material default under any material agreement, indenture,
lease or other instrument to which the Adviser is a party,
or will result in the creation or imposition of any material
lien, charge or encumbrance upon any material property or
material assets of the Adviser, nor will any such action
result in any material violation of any law of the State of
New York, the Delaware General Corporation Law, the 1940
Act, the Advisers Act or any regulation or judgment,
injunction, order or decree applicable to the Adviser or any
of its properties;
(v) No consent, approval, authorization or other
order of, or registration or filing with, the Commission,
any arbitrator, any court, regulatory body, administrative
agency or other governmental body, agency, or official of
the State of New York is required on the part of the Adviser
for the execution, delivery and performance of this
Agreement or the Advisory Agreement, or the consummation by
the Adviser of the transactions contemplated hereby and
thereby;
(vi) To the best knowledge of such counsel after
reasonable inquiry, there are no legal or governmental
proceedings pending or threatened against the Adviser or to
which the Adviser or any of its properties is subject, which
are required to be described in the Registration Statement
or the Prospectus (or any amendment or supplement to either
of them) but are not described as required;
(vii) The Adviser has all material permits, licenses,
franchises and authorizations of governmental or regulatory
authorities as are necessary to own its properties and to
conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto), and to
perform its obligations under the Advisory Agreement; and
(viii) Such counsel shall also state that the
description of the Adviser contained in the Registration
Statement (and any amendment or supplement thereto) does 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 contained therein not
misleading and that the description of the Adviser contained
in the Prospectus or any amendment or supplement thereto, as
of its issue date and as of the Closing Date does 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 contained therein, in the
light of the circumstances under which they were made, not
misleading.
(e) Reserved.
(f) You shall have received on the Closing Date an opinion
of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated
the Closing Date and addressed to you, with respect to such matters
as you may reasonably request.
(g) You shall have received letters addressed to you and
dated the date hereof and the Closing Date from Deloitte & Touche
LLP, independent certified public accountants, substantially in the
forms heretofore approved by you.
(h) (i) No order suspending the effectiveness of the
registration statement or the Registration Statement or prohibiting
or suspending the use of the Prospectus (or any amendment or
supplement thereto) or any Prepricing Prospectus shall have been
issued and no proceedings for such purpose or for the purpose of
commencing an enforcement action against the Trust, the Adviser or
with respect to the transactions contemplated by the Prospectus (or
any amendment or supplement thereto) and this Agreement (other than
enforcement actions against any Underwriter with respect to the
transactions contemplated by the Prospectus (or any amendment or
supplement thereto) and this Agreement) may be pending before or,
to the knowledge of the Trust, the Adviser or any Underwriter or in
the reasonable view of counsel to the Underwriters, shall be
threatened by the Commission at or prior to the Closing Date and
that any request for additional information on the part of the
Commission (to be included in the Registration Statement, the
Prospectus or otherwise) be complied with to the reasonable
satisfaction of the Underwriters; (ii) there shall not have been
any change in the capitalization of the Trust nor any material
increase in the short-term or long-term debt of the Trust (other
than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or
any amendment or supplement thereto); (iii) there shall not have
been, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or any
amendment or supplement to either of them), except as may otherwise
be stated in the Registration Statement and Prospectus (or any
amendment or supplement to either of them), any material adverse
change (other than as a result of changes in market conditions
generally or the market for municipal securities generally) in the
condition (financial or other), general affairs, assets or results
of operations of the Trust; (iv) the Trust shall not have any
liabilities or obligations, direct or contingent (whether or not in
the ordinary course of business), that are material to the Trust,
other than those reflected in or contemplated by the Registration
Statement or the Prospectus (or any amendment or supplement to
either of them); and (v) all the representations and warranties of
the Trust and the Adviser contained in this Agreement that are
qualified by a materiality standard shall be true and correct, and
all representations and warranties of the Trust and the Adviser
contained in this Agreement that are not so qualified shall be true
and correct in all material respects, on and as of the date hereof
and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate of the
Trust and the Adviser, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of each of
the Trust and the Adviser (or such other officers as are reasonably
acceptable to you), to the effect set forth in this Section 9(h)
and in Section 9(i) hereof.
(i) Neither the Trust nor the Adviser shall have failed at
or prior to the Closing Date to have performed or complied in all
material respects with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(j) The Trust shall have delivered and you shall have
received evidence satisfactory to you that the Shares are rated
'aaa' by Xxxxx'x and 'AAA' by S&P as of the Closing Date, and there
shall not have been given any notice of any intended or potential
downgrading, or of any review for a potential downgrading, in the
rating accorded to the Shares by Xxxxx'x or by S&P.
(k) As of the Closing Date and assuming the receipt of the
net proceeds from the sale of the Shares, the 1940 Act Preferred
Shares Asset Coverage and the Preferred Shares Basic Maintenance
Amount (each as defined in Appendix C-1 to the statement of
additional information contained in the Registration Statement)
each will be met.
(l) The Trust and the Adviser shall have furnished or caused
to be furnished to you such further certificates and documents as
you shall have reasonably requested in order to verify the
satisfaction of the conditions set forth in this Section 9,
including, without limitation, a certificate of the secretary or
assistant secretary of the Trust and the Adviser, an incumbency
certificate of the Trust and the Adviser and a certificate of the
auction agent.
(m) You shall have received on the Closing Date the written
confirmations referred to in Section 6(v) hereof.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to you and your counsel.
10. Expenses. The Trust agrees to pay the following costs
and expenses and all other costs and expenses incident to the performance
by it of its obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the registration statement
(including financial statements and exhibits thereto), each Prepricing
Prospectus, the 1940 Act Notification, the Prospectus and each amendment or
supplement to any of them (including, without limitation, the filing fees
prescribed by the 1933 Act, the 1940 Act and the Rules and Regulations);
(ii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of
the Registration Statement, each Prepricing Prospectus, the Prospectus, any
sales material and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of
the Shares; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Shares, including any stamp taxes in
connection with the original issuance and sale of the Shares; (iv) the
reproduction and delivery of this Agreement, any dealer agreements and all
other agreements or documents reproduced and delivered in connection with
the offering of the Shares; (v) the registration or qualification of the
Shares for offer and sale under the securities or blue sky laws of the
several states as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental
blue sky memoranda and such registration and qualification); (vi) fees paid
to Xxxxx'x and/or S&P; (vii) the transportation and other expenses incurred
by or on behalf of Trust representatives in connection with presentations
to prospective purchasers of the Shares; and (viii) the fees and expenses
of the Trust's accountants and the fees and expenses of counsel (including
local and special counsel) for the Trust.
11. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective
amendment thereto to be declared effective before the offering of the
Shares may commence, when the registration statement or such post-effective
amendment has become effective. Until such time as this Agreement shall
have become effective, it may be terminated by the Trust, by notifying you,
or by you, by notifying the Trust.
If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase hereunder on
the Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on the Closing Date, each
non-defaulting Underwriter shall be obligated, severally, in the proportion
which the number of Shares set forth opposite its name in Schedule I hereto
bears to the aggregate number of Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify,
to purchase the Shares which such defaulting Underwriter or Underwriters
are obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares which the Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to you and the
Trust for the purchase of such Shares by one or more non-defaulting
Underwriters or other party or parties approved by you and the Trust are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Trust
or the Adviser. In any such case which does not result in termination of
this Agreement, either you or the Trust shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not
listed in Schedule I hereto who, with your approval and the approval of the
Trust, purchases Shares which a defaulting Underwriter is obligated, but
fails or refuses, to purchase.
Any notice under this Section 11 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
12. Termination of Agreement. This Agreement shall be
subject to termination in your absolute discretion, without liability on
the part of any Underwriter to the Trust or the Adviser, by notice to the
Trust or the Adviser, if prior to the Closing Date (i) trading in the
Trust's common shares or securities generally on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market or the
Nasdaq Stock Market shall have been suspended or materially limited, (ii)
additional material governmental restrictions not in force on the date of
this Agreement have been imposed upon trading in securities generally or a
general moratorium on commercial banking activities in New York shall have
been declared by either federal or state authorities, or (iii) there shall
have occurred any outbreak or material escalation of hostilities or other
international or domestic calamity, crisis or material adverse change in
political, financial or economic conditions, the effect of which is to make
it, in your judgment, impracticable or inadvisable to commence or continue
the offering of the Shares at the offering price to the public set forth on
the cover page of the Prospectus or to enforce contracts for the resale of
the Shares by the Underwriters. Notice of such termination may be given to
the Trust or the Adviser by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The
statements set forth in the last paragraph on the cover page, and the
statements in the first and third paragraphs under the caption
"Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Sections
6(b) and 8 hereof.
14. Miscellaneous. Except as otherwise provided in Sections
5, 11 and 12 hereof, notice given pursuant to any provision of this
Agreement shall be in writing and shall be delivered (i) if to the Trust or
the Adviser, at the office of BlackRock Financial Management, Inc. at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxxxxx; or
(ii) if to you, to Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit
of the several Underwriters, the Trust, the Adviser, their trustees,
directors and officers, and the other controlling persons referred to in
Section 8 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under
or by virtue of this Agreement. Neither the term "successor" nor the term
"successors and assigns" as used in this Agreement shall include a
purchaser from any Underwriter of any of the Shares in his status as such
purchaser.
15. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party
hereto.
Please confirm that the foregoing correctly sets forth the
agreement among the Trust, the Adviser and the several Underwriters.
Very truly yours,
THE BLACKROCK [ ] TRUST INC.
By:___________________________________
BLACKROCK FINANCIAL
MANAGEMENT, INC.
By:____________________________________
Confirmed as of the date
first above mentioned.
XXXXXXX XXXXX XXXXXX INC.
[ ]
By: XXXXXXX XXXXX XXXXXX INC.
By: __________________________
Managing Director
SCHEDULE I
THE BLACKROCK [ ] TRUST INC.
Number of
Underwriter Shares
----------- ---------
Xxxxxxx Xxxxx Xxxxxx Inc.
---------
Total.................................. 2600
EXHIBIT A
FORM OF OPINION OF XXXXXXX, ARPS, SLATE, XXXXXXX & XXXX LLP
