EXHIBIT (H)(1)
THE BLACKROCK PENNSYLVANIA STRATEGIC MUNICIPAL TRUST
_________ Shares
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
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________ __, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the
several Underwriters listed in
Schedule I hereto
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The BlackRock Pennsylvania Strategic Municipal Trust, a Delaware
business trust (the "Trust"), proposes, upon the terms and conditions set forth
herein, to issue and sell an aggregate of ______ shares (the "Firm Shares") of
its Common Shares of Beneficial Interest, par value $.001 per share (the "Common
Shares"). The Trust also proposes to grant to the Underwriters (as defined
below), upon the terms and subject to the conditions set forth herein, an option
to purchase up to _________ additional shares (the "Option Shares" and together
with the Firm Shares, the "Shares") of Common Shares. The Shares will be
authorized by, and subject to the terms and conditions of, the Agreement and
Declaration of Trust of the Trust (the "Declaration") in the form filed as an
exhibit to the Registration Statement referred to in Section 1 of this
agreement, as the same may be amended from time to time. The Trust, its
investment adviser, BlackRock Advisors, Inc. ("BAI"), and its investment sub-
adviser, BlackRock Financial Management, Inc. ("BFM") (each, an "Adviser" and
together, the "Advisers"), wish to confirm as follows their agreement with
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and Prudential Securities Incorporated (the
"Representatives"), as representatives of the several Underwriters listed in
Schedule I hereto (the "Underwriters"), in connection with the purchase of the
Shares by the Underwriters.
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Collectively, the Investment Advisory Agreement dated as of _____,
1999 between the Trust and BAI (the "Investment Advisory Agreement"), the Sub-
Advisory Agreement dated as of _____, 1999 between the Trust, BAI and BFM (the
"Sub-Advisory Agreement"), the Custodian Agreement dated as of _____, 1999
between the Trust and State Street Bank and Trust Company (the "Custodian
Agreement") and the Transfer Agency and Dividend Paying Agency Agreement dated
as of _____, 1999 between the Trust and ______ (the "Transfer Agency Agreement")
are hereinafter referred to as the "Trust Agreements." The Investment Advisory
Agreement and the Sub-Advisory Agreement are hereinafter collectively referred
to as the "Advisory Agreements." This Underwriting Agreement is hereinafter
referred to as the "Agreement."
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1. Registration Statement and Prospectus. The Trust has prepared and
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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. 333-82093 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 July 29, 1999, and as such prospectus and statement of
additional information shall have been amended from time to time prior to the
date of the Prospectus, together with any other prospectus and statement of
additional information relating to the Trust other than the Prospectus approved
in writing by or directly or indirectly prepared by the Trust or the Advisers;
it being understood that the definition of Prepricing Prospectus above shall not
include any Prepricing Prospectus prepared by the Underwriters unless approved
in writing by the Trust or an Adviser. The terms "Registration Statement,"
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements and other information incorporated by reference therein.
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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. (a) The Trust hereby agrees,
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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 Advisers 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 $14.325 per share,
the number of shares of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
(b) The Trust also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Trust herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Trust, at the same purchase price per share
as the Underwriters shall pay for the Firm Shares, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 45th day after the date of
the Prospectus (or, if such 45th day shall be a Saturday or Sunday or a holiday,
on the next business day thereafter when the New York Stock Exchange is open for
trading), up to an aggregate of _______ Option Shares. Option Shares may be
purchased only for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. Upon any exercise of the over-allotment
option, each Underwriter, severally and not jointly, agrees to purchase from the
Trust the number of Option Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) which bears the same proportion
to the number of Option Shares to be purchased by the Underwriters as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto (or such number of Firm Shares increased as set forth in Section 11
hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Trust and the Advisers have been
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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
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Underwriters of and payment for the Firm Shares and the Option Shares (if the
option provided for in Section 2(b) hereof shall have been exercised on or
before the third business day prior to the Closing Date (as defined below))
shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or through the facilities of the Depository Trust Company or
another mutually agreeable facility, at 9:30 A.M., New York City time, on
________ __, 1999 (the "Closing Date"). The place of closing for the Firm
Shares and the Option Shares and the Closing Date may be varied by agreement
between you and the Trust.
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Delivery to the Underwriters of and payment for any Option Shares to
be purchased by the Underwriters shall be made at the aforementioned office of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Trust of the Underwriters' determination to purchase a number, specified in such
notice, of Option Shares. The place of closing for any Option Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Trust.
Certificates for the Firm Shares and for any Option Shares to be
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 or any Option Closing Date, as the case
may be. 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 or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Option Shares
to be purchased hereunder shall be delivered to you on the Closing Date or the
Option Closing Date, as the case may be, 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 Advisers. The Trust and the
----------------------------------------
Advisers, 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 endeavor to cause the Registration Statement or
such post-effective amendment to become effective under the 1933 Act as soon as
possible 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) The Trust 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 the Trust, the Advisers, any affiliate of the Trust or the
Advisers or
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any representative or attorney of the Trust or the Advisers of any other
material communication 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),
business, prospects, properties, net assets or results of operations of the
Trust or the Advisers 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 sales materials (as herein
defined) (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 sales materials
(as herein defined) (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 sales material (as herein defined) (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, 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 Trust 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 request.
(d) The Trust will not (i) 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 or (ii)
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, file any information, documents or
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reports to you, as Representatives of the several Underwriters, 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 expeditiously 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 in the judgment of the Trust or in the opinion of counsel for the
Underwriters is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the 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, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Trust will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will expeditiously furnish to the Underwriters and
dealers, without charge, a reasonable number of copies thereof. In the event
that the Trust and you, as Representatives of the several Underwriters, agree
that the Registration Statement or the Prospectus should be amended or
supplemented, the Trust, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(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.
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(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 15 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 five years hereafter, the Trust will furnish
to you (i) as soon as available, a copy of each 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 terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
you terminating this Agreement pursuant to Section 12 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Trust or the Advisers to comply with the terms or
fulfill any of the conditions of this Agreement required to be complied with or
fulfilled by them, the Trust and the Advisers, jointly and severally, agree to
reimburse the Representatives for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.
(k) The Trust will apply the net proceeds from the sale of the Firm
Shares, and of the Option Shares, if any, 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 Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or grant any
options or warrants to purchase Common Shares, for a period of 180 days after
the date of the Prospectus, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc.; provided, however, that the Trust may issue Common Shares pursuant
to any dividend reinvestment plan of the Trust in effect on the date hereof.
(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Trust nor the Advisers have taken, nor
will any of them take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in
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stabilization or manipulation of the price of the Shares or any other securities
issued by the Trust to facilitate the sale or resale of the Shares.
(o) The Trust will use its reasonable best efforts to have the Shares
listed, subject to notice of issuance, on the NYSE concurrently with the
effectiveness of the registration statement.
(p) The Trust will 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.
(q) The Trust and the Advisers 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 Advisers. The
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Trust and the Advisers, jointly and severally, represent and warrant to each
Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied
when so filed 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.
(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 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 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.
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(c) All the shares of beneficial interest 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 to the description thereof in
the Registration Statement and the Prospectus (and any amendment or supplement
to either of them); and the capital stock of the Trust conforms to the
description thereof in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them).
(d) Except for the Option Shares, shares to be issued pursuant to the
Trust's dividend reinvestment plan and as otherwise described in the Prospectus,
there are no outstanding options, warrants or other rights calling for the
issuance of, or any commitment, plan or arrangement to issue, any shares of
capital stock of the Trust or any security convertible into or exchangeable or
exercisable for capital stock of the Trust.
(e) The Trust is a business trust duly organized and validly existing
in good standing under the laws of the State of Delaware with full business
trust 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), business, prospects, properties, net assets or
results of operations of the Trust; and the Trust has no subsidiaries.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Trust or the Advisers, 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.
(g) The Trust is not in violation of the Declaration 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,
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lease or other instrument to which the Trust is a party or by which it or any of
its properties may be bound.
(h) 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 (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 Declaration, the Bylaws or other
organizational documents of the Trust or (B) conflicts or will conflict with or
constitutes or will constitute a 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. The Trust is not subject
to any order of any court or of any arbitrator, governmental authority or
administrative agency.
(i) 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.
(j) 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; 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; and the other financial and statistical information and data
included in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) are accurately presented.
(k) 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
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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.
(l) 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),
the Trust has not incurred any liability or 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 capital stock,
or material increase in the short-term debt or long-term debt, of the Trust, or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Trust, whether or not arising in the ordinary
course of business.
(m) 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.
(n) 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; the Trust 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 Trust under any such permit, subject in each
case to such qualification as may be set forth in the Prospectus (and any
amendment or supplement thereto); and, except as described in the Prospectus
(and any amendment or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Trust.
(o) 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 and with the
applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and
the Code; (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 and to maintain compliance with the
books and records requirements under the 1940 Act and the 1940 Act Rules and
Regulations; (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.
13
(p) To the Trust's knowledge, neither the Trust nor any employee or
agent of the Trust has made any payment of funds of the Trust or received or
retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(q) 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.
(r) 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.
(s) The conduct by the Trust of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of any
patents, patent licenses, trademarks, service marks or trade names which it does
not own, possess or license.
(t) The Trust is registered under the 1940 Act and the 1940 Act Rules
and Regulations as a closed-end, non-diversified 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
either of the Advisers, threatened by the Commission. The provisions of the
Declaration 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. The Trust is, and at all times through the completion of the
transactions contemplated hereby, will be, in compliance in all material
respects with the terms and conditions of the 1933 Act and the 1940 Act. No
person is serving or acting as an officer, director or investment adviser of the
Trust except in accordance in all material respects with the provisions of the
1940 Act and the 1940 Act Rules and Regulations and 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").
(u) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Trust 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 Trust is not aware of any such action taken or to be taken by any
affiliates of the Trust who are not underwriters or dealers participating in the
offering of the Shares.
14
(v) All advertising, sales literature or other promotional material
(including Aprospectus wrappers," "broker kits," "road show slides" and "road
show scripts") authorized in writing by or prepared by the Trust or the Advisers
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 1940 Act, the Rules and Regulations
and the rules and interpretations of the NASD and no such sales material
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.
(w) Each of the Trust Agreements and the Trust's and the Advisers'
obligations under this Agreement and each of the Trust Agreements to which it is
a party comply in all material respects with all applicable provisions of the
1933 Act, the 1940 Act, the Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations.
(x) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director of
the Trust is an "interested person" (as defined in the ▇▇▇▇ ▇▇▇) of the Trust or
an "affiliated person" (as defined in the ▇▇▇▇ ▇▇▇) of any Underwriter.
(y) The Shares have been duly authorized for listing, subject to
official notice of issuance, on the NYSE and the Trust's registration statement
on Form 8-A under the 1934 Act has become effective.
(z) The Trust believes, after reasonable inquiry, that each supplier,
vendor, customer or financial service organization used by the Trust has a
program reasonably designed to address on a timely basis the risk that its
computer hardware and software may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates after
December 31, 1999 (the "Year 2000 Problem"), except to the extent that a failure
by any such supplier, vendor, customer or financial service organization to have
such a program would not have a material adverse effect on the Trust. The Trust
is in compliance in all material respects with the Commission's Release No. 33-
7558 dated July 29, 1998 related to Year 2000 compliance.
7 Representations and Warranties of the Advisers. BAI and BFM,
----------------------------------------------
jointly and severally, represent and warrant to each Underwriter that:
(a) Each of the Advisers 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 each 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
15
adverse effect on the condition (financial or other), business, prospects,
properties, net assets or results of operations of such Adviser or on the
ability of such Adviser to perform its obligations under this Agreement and the
Advisory Agreements to which it is a party.
(b) Each of the Advisers 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 Agreements to which it is a party
for the Trust as contemplated by the Prospectus (or any amendment or supplement
thereto). There does not exist any proceeding which might adversely affect the
registration of either Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of each Adviser, threatened against such Adviser, or to which such
Adviser or any of its properties is subject, 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 may reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of such Adviser or on the ability of such Adviser to perform its
obligations under this Agreement and the Advisory Agreements to which it is a
party.
(d) Neither the execution, delivery or performance of this Agreement
or the Advisory Agreements by each Adviser which is a party thereto, nor the
consummation by each Adviser of the transactions contemplated hereby or thereby
(A) requires either 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 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 such Adviser or (B) conflicts or
will conflict with or constitutes or will constitute a breach of or a default
under, any material agreement, indenture, lease or other instrument to which
either Adviser is a party or by which either 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
either 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 either 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 either Adviser is subject. Neither Adviser is 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 each
Adviser of its respective obligations under, this Agreement and the Advisory
Agreements to which it is a party have been duly and validly authorized by such
Adviser, and this Agreement and the Advisory Agreements have been duly executed
and delivered by such Adviser and, assuming due authorization, execution and
delivery by the other parties thereto, each constitutes the valid and
16
legally binding agreement of such Adviser, enforceable against such 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.
(f) Each Adviser has the financial resources available to it
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 Agreements to which it is a party.
(g) The description of each 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) This Agreement and each of the Advisory Agreements comply 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),
neither Adviser has incurred any liability or obligation, direct or contingent,
or entered into any transaction, not in the ordinary course of business, that is
material to either Adviser or the Trust, and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of either Adviser, whether or not arising in the ordinary course of business, or
which, in each case, could have a material adverse effect on the ability of
either Adviser to perform its respective obligations under this Agreement and
the Advisory Agreements to which it is a party.
(j) Each of the Advisers 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); each of
the Advisers 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 either Adviser under any such
permit.
17
(k) Except as stated in this Agreement and in the Prospectus (and in
any amendment or supplement thereto), neither Adviser has 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 neither Adviser is aware of any such action taken or to be taken by
any affiliates of the Advisers who are not underwriters or dealers participating
in the offering of the Shares.
8 Indemnification and Contribution. (a) The Trust and the
--------------------------------
Advisers, 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 the information relating to
such 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
Advisers 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 Advisers, such Underwriter or
such controlling person shall promptly notify the Trust or the Advisers, and the
Trust or the Advisers shall 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 Advisers have agreed in
writing to pay such fees and expenses, (ii) the Trust and the Advisers
18
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 Advisers
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
Advisers 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 Advisers 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 Advisers
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 the Representatives, and that all such fees and expenses shall be
reimbursed as they are incurred. The Trust and the Advisers 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 Advisers 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 Advisers, their directors, any officers who
sign the Registration Statement, and any person who controls the Trust or the
Advisers 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
Advisers 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 Advisers,
any of their 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 Advisers by
paragraph (b) above (except that if the Trust or the Advisers 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 Advisers, their 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.
19
(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 Advisers 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 Advisers 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 Advisers 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
Advisers agree that as between the Trust, BAI and BFM (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 Advisers under this
Section 8(d) on a joint and several basis) the relative benefits received by the
Trust, on the one hand, and BAI and BFM, 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 BAI pursuant to the Investment Advisory Agreement. The relative fault
of the Trust and the Advisers 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 Advisers 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 Advisers 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
20
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 ▇▇▇▇ ▇▇▇) 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 numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm 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 Advisers 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 Advisers, their directors or
officers, or any person controlling the Trust or the Advisers, (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 Advisers, their directors or officers, or any
person controlling the Trust or the Advisers, 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 Firm Shares and the Option Shares, as the
case may be, 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 Advisers or
any Underwriter, threatened by the Commission, and any request of the
21
Commission for additional information (to be included in the registration
statement or the prospectus or otherwise) shall have been complied with to your
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, prospects,
properties, net assets, or results of operations of the Trust or the Advisers
not contemplated by the Prospectus, which in your opinion, as Representatives of
the several Underwriters, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Trust or
the Advisers or any officer or director of the Trust or the Advisers 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, as Representatives of the several
Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Trust, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, in form and substance satisfactory to you and to the effect that:
(i) The Trust is a business trust duly organized and
validly existing in good standing under the laws of the State of
Delaware with full business trust 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), business, prospects,
properties, net assets or results of operations of the Trust; the
Trust has no subsidiaries;
(ii) The [authorized and outstanding capital stock of the
Trust is as set forth under the caption ["Financial Statements"] in
the Prospectus; and the] authorized capital stock of the Trust
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Shares";
(iii) There were no shares of capital stock of the Trust
outstanding prior to the issuance of the Shares, except _____ shares
of beneficial interest owned of record by ____, which shares have been
duly authorized and validly issued, and are fully paid and
nonassessable;
22
(iv) 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 to the best knowledge
of such counsel after reasonable inquiry, similar rights that entitle
or will entitle any person to acquire any Shares upon the issuance
thereof by the Trust, and will conform to the description thereof
contained in the Prospectus under the caption ADescription of Shares--
Common Shares";
(v) The form of certificates for the Shares conforms to
the requirements of Delaware law;
(vi) The Registration Statement and all post-effective
amendments, if any, have become effective under the 1933 Act and the
1933 Act Rules and Regulations and, to the best knowledge of such
counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement or order pursuant to
Section 8(e) of the 1940 Act has been issued and no proceedings for
that purpose are pending before or contemplated by the Commission; and
any required filing of the Prospectus pursuant to Rule 497 of the 1933
Act Rules and Regulations has been made in accordance with Rule 497;
(vii) The Trust has business trust power and authority to
enter into this Agreement and each of the Trust Agreements and to
issue, sell and deliver the Shares to the Underwriters as provided
herein, and this Agreement and each of the Trust Agreements have been
duly authorized, executed and delivered by the Trust and each is a
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 or principles of public policy 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;
(viii) The Trust is not in violation of the Declaration or
Bylaws, or other organizational documents, and to the best knowledge
of such counsel after reasonable inquiry, is not in default in the
performance of any material obligation, agreement or condition
contained in any bond, debenture, note or 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;
(ix) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement and the Trust
Agreements by the Trust, nor the consummation by the Trust of the
transactions contemplated hereby
23
and thereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Declaration or Bylaws,
or other organizational documents, of the Trust or any agreement,
indenture, lease or other instrument to which the Trust is a party or
by which it or any of its properties is bound, or will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust, nor will any such action result in
any violation of any statute, law, regulation or judgement (assuming
compliance with all applicable state securities or blue sky laws),
injunction, order or decree applicable to the Trust or any of its
properties;
(x) No consent, approval, authorization or other order of, or
registration or filing with, the Commission, the NASD, any national
securities exchange, or, to the best of such counsel's knowledge after
reasonable inquiry, any state securities commission, any arbitrator,
any court, regulatory body, administrative agency or other
governmental body, agency, or official is required on the part of 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) for the valid issuance and
sale of the Shares to the Underwriters as contemplated by this
Agreement, the execution, delivery and performance by the Trust of
this Agreement and the Trust Agreements or the consummation of the
transactions contemplated hereby and thereby;
(xi) The 1940 Act Notification, the Registration Statement,
the Prospectus and any supplements or amendments thereto (except for
the financial statements and the notes thereto and the schedules and
other financial and statistical data included therein, as to which
such counsel need not express any opinion) comply in all material
respects with the requirements of the 1933 Act, the 1940 Act and the
Rules and Regulations;
(xii) To the best knowledge of such counsel after reasonable
inquiry, (A) other than as described in the Registration Statement or
Prospectus (or any amendment or supplement to either of them), there
are no legal or governmental proceedings pending or threatened against
the Trust, or to which the Trust or any of its properties is subject,
which are required to be described in the Registration Statement or
Prospectus (or any amendment or supplement to either of them) and (B)
there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus (or 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, as the case may be;
(xiii) To the best knowledge of such counsel after reasonable
inquiry, the Trust is not in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Trust or of any decree of the Commission, the
24
NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or governmental agency, body or
official having jurisdiction over the Trust;
(xiv) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents, or refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown;
(xv) Each of the Trust Agreements and the Trust's and the
Advisers' obligations under this Agreement and each of the Trust
Agreements to which it is a party comply in all material respects with
all applicable provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the Rules and Regulations and the Advisers Act Rules and
Regulations;
(xvi) The Trust is duly registered with the Commission under
the 1940 Act and the 1940 Act Rules and Regulations as a closed-end,
[non-]diversified management investment company and, to the best
knowledge of such counsel after reasonable inquiry, 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 threatened by the Commission; the provisions of
the Declaration 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, and the Trust has
taken all required action under the 1933 Act and 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;
(xvii) The Trust has full business trust power and authority,
and such permits, licenses, franchises and authorizations of
governmental or regulatory authorities (except where the failure so to
have any such permits, licenses, franchises and authorizations,
individually or in the aggregate, would not have a material adverse
effect on the business, properties, operations or financial condition
of the Trust), 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);
(xviii) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance
of, and such counsel does not know of any commitment, plan or
arrangement to issue, any shares of capital stock of the Trust or any
security convertible into or exchangeable or exercisable for capital
stock of the Trust; and no holder of any security of the Trust has any
right to require registration of Common Shares, shares of preferred
stock or any
25
other security of the Trust because of the filing of the registration
statement or consummation of the transactions contemplated by this
Agreement; and
(xix) The Shares have been duly authorized for listing, subject
to official notice of issuance, on the NYSE.
(xx) Such counsel shall also state that, while they have not
themselves checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, except to the limited extent
stated in paragraphs (iii), (v) and (xv) above, in the course of their
review and discussion of the contents of the Registration Statement
and Prospectus with certain officers and employees of the Trust and
its independent accountants and special Pennsylvania counsel for the
Trust, no facts have come to their attention which cause them to
believe that the Registration Statement or any amendment or supplement
thereto (except as to any financial statements or other financial data
included in the Registration Statement or any such amendment or
supplement, as to which they express no belief), as of its effective
date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading or that the
Prospectus or any amendment or supplement thereto (except as to any
financial statements or other financial data included in the
Prospectus or any such amendment or supplement, as to which they
express no belief), as of its issue date and as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they
were made, not misleading.
(d) You shall have received on the Closing Date an opinion of
_________, counsel for the Advisers, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, in form and
substance satisfactory to you and to the effect that:
(i) Each of the Advisers 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 each 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),
business, prospects, properties, net assets or results of operations
of such Adviser
26
to perform its obligations under this Agreement and the Advisory
Agreements to which it is a party;
(ii) Each of the Advisers 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 Agreements to which it is a party 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 or any facts
or circumstances the existence of which could lead to any proceeding
which might adversely affect the registration of either Adviser with
the Commission;
(iii) Each of the Advisers has corporate power and authority to
enter into this Agreement and the Advisory Agreements to which it is a
party, and this Agreement and the Advisory Agreements to which each
Adviser is a party have been duly authorized, executed and delivered
by each Adviser which is a party thereto and each is a valid and
legally binding agreement of such Adviser, enforceable against such
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 Advisers' 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;
(iv) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreements by each Adviser which is a party
thereto, nor the consummation by each Adviser of the transactions
contemplated hereby and thereby 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 such Adviser or any agreement, indenture, lease or other
instrument to which either Adviser is a party or by which either
Adviser or any of its properties is bound, or will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of either Adviser, nor will any such action result
in any violation of any existing statute, law, regulation or judgment,
injunction, order or decree applicable to either Adviser or any of its
properties;
(v) No 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 is required on the part of
either Adviser for the execution, delivery and performance of this
Agreement or the Advisory Agreements to which it is a party, or the
27
consummation by such 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 either Adviser or to which either 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 or
which may reasonably be expected to involve a prospective material
adverse change in the condition (financial or other), business,
prospects, properties, net assets or results of operations of either
Adviser or on the ability of either Adviser to perform its obligations
under this Agreement and the Advisory Agreements to which it is a
party;
(vii) The obligations of each of the Advisers under this
Agreement and the Advisory Agreements to which it is a party comply 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;
(viii) Each of the Advisers has full corporate power and
authority, and such 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 Agreements to which it is a party;
and
(ix) Such counsel shall also state that the description of
each of the Advisers 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 Advisers contained in
the Prospectus or any amendment or supplement thereto, as of its issue
date and as of the Closing Date or the Option Closing Date, as the
case may be, 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) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, special Pennsylvania counsel for the Trust, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, in form and substance satisfactory to you and to the effect that:
28
(i) The statements in the Prospectus under the captions "The
Trust's Investments--Municipal Bonds--Special Considerations Relating
to Pennsylvania Municipal Bonds" and "Tax Matters" (with respect to
the Pennsylvania income tax) (in the prospectus) and "Investment
Policies and Techniques--Factors Pertaining to Pennsylvania" and "Tax
Matters--Pennsylvania Tax Matters" (in the statement of additional
information), insofar as they refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown; and
(ii) Such counsel shall also state that they have participated in
the preparation of, and have reviewed and discussed the contents of,
the Registration Statement and Prospectus with certain officers and
employees of the Trust and its independent accountants concerning the
statements set forth in the Registration Statement and Prospectus
under the captions "The Trust's Investments--Municipal Bonds--Special
Considerations Relating to Pennsylvania Municipal Bonds" and "Tax
Matters" (with respect to the Pennsylvania income tax) (in the
prospectus) and "Investment Policies and Techniques--Factors
Pertaining to Pennsylvania" and "Tax Matters--Pennsylvania Tax
Matters" (in the statement of additional information), and that based
upon the foregoing, no facts have come to their attention which cause
them to believe that the statements contained in the Registration
Statement or any amendment or supplement thereto under such captions
(except as to any financial statements or other financial data
included in the Registration Statement or any such amendment or
supplement, as to which they express no belief), as of its effective
date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading or that the
statements contained in the Prospectus or any amendment or supplement
thereto under such captions (except as to any financial statements or
other financial data included in the Prospectus or any such amendment
or supplement, as to which they express no belief), as of its issue
date and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading.
(f) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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
the Representatives.
29
(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 or any sales material shall have been issued and no proceedings for
such purpose or for the purpose of commencing an enforcement action against the
Trust, the Advisers or, with respect to the transactions contemplated by the
Prospectus (or any amendment or supplement thereto) and this Agreement, any
Underwriter, may be pending before or, to the knowledge of the Trust, the
Advisers or any Underwriter or in the reasonable view of counsel to the
Underwriters, shall be threatened or contemplated 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 satisfaction of the Underwriters; (ii)
there shall not have been any change in the capital stock 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 in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Trust or the Advisers; (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 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 Advisers contained in this Agreement shall be true and correct 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
Advisers, dated the Closing Date and signed by the chief executive officer and
the chief financial officer of each of the Trust and the Advisers (or such other
officers as are acceptable to you), to the effect set forth in this Section 9(h)
and in Section 9(i) hereof.
(i) Neither the Trust nor either of the Advisers 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 Shares have been duly authorized for listing, subject to
official notice of issuance, on the NYSE.
(k) The Trust and the Advisers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
30
Any certificate or document signed by any officer of the Trust or the
Advisers and delivered to you, or to your counsel, shall be deemed a
representation and warranty by the Trust or the Advisers, as applicable, to each
Underwriter as to the statements made therein.
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 of the Shares under the
Exchange Act and the listing of the Shares on the NYSE; (vi) 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 for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental blue sky memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
NASD; (viii) the transportation and other expenses incurred by or on behalf of
Trust representatives in connection with presentations to prospective purchasers
of the Shares; (ix) the fees and expenses of the Trust's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Trust; and (x) an amount of [$75,000] [$50,000] payable on the Closing Date to
the Underwriters in partial reimbursement of their expenses in connection with
the offering.
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
notification of the effectiveness of the registration statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Trust,
by notifying you, or by you, as Representatives of the several Underwriters, 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
31
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 Firm Shares set forth opposite its name in
Schedule I hereto bears to the aggregate number of Firm 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 Advisers. 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 Advisers, by notice to the Trust or the
Advisers, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Option Shares), as the case may
be, (i) trading in 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 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 either Adviser by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
32
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 Advisers, at the
office of BlackRock Financial Management, Inc. at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇; or (ii) if to you, as
Representatives of the several Underwriters, to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Investment
Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Trust, the Advisers, their 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.
33
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Advisers and the several Underwriters.
Very truly yours,
BLACKROCK STRATEGIC MUNICIPAL TRUST
By:_______________________________
BLACKROCK ADVISORS, INC.
By:_______________________________
BLACKROCK FINANCIAL MANAGEMENT, INC.
By:_______________________________
Confirmed as of the date first
above mentioned on behalf of themselves and the
other several Underwriters named in Schedule I hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: _______________________________
Managing Director
1
SCHEDULE I
BLACKROCK STRATEGIC MUNICIPAL TRUST
Underwriter Number of
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Shares
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▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................ --
Prudential Securities Incorporated.................. --
Total............................................... --