Exhibit 9(l)
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BLACKROCK FUNDS/SM/
SHARE ACQUISITION AGREEMENT
DATED AS OF APRIL 29, 1998
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TABLE OF CONTENTS
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Page
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1. BlackRock Share Acquisition.............................. 2
2. Consideration............................................ 2
3. Liquidation and Dissolution of PNC CTFs.................. 3
4. Valuation Time........................................... 4
5. Certain Representations, Warranties and
Agreements of BlackRock Funds.......................... 4
6. Certain Representations, Warranties and
Agreements of PNC...................................... 6
7. CTF Consents............................................. 8
8. Exemptive Relief......................................... 8
9. Effective Times for the BlackRock Share Acquisition...... 8
10. BlackRock Funds Conditions............................... 8
11. PNC CTF Conditions....................................... 10
12. Further Assurances....................................... 11
13. Termination of Representations and Warranties............ 11
14. Termination of Agreement................................. 11
15. Amendment and Waiver..................................... 12
16. Governing Law............................................ 12
17. Successors and Assigns................................... 12
18. Beneficiaries............................................ 12
19. Brokerage Fees and Expenses.............................. 13
20. BlackRock Funds Liability................................ 13
21. PNC Liability............................................ 13
22. Notices.................................................. 13
23. Expenses................................................. 15
24. Entire Agreement......................................... 15
25. Counterparts............................................. 15
ii
BLACKROCK FUNDS/SM/
SHARE ACQUISITION AGREEMENT
This BLACKROCK FUNDS/SM/ SHARE ACQUISITION AGREEMENT (the "Agreement") is
made as of this 29th day of April, 1998 by and among BlackRock Funds/SM/
("BlackRock Funds"), a Massachusetts business trust, on behalf of the following
of its portfolios: Select Equity Portfolio, Large Cap Growth Equity Portfolio,
Large Cap Value Equity Portfolio, Mid-Cap Growth Equity Portfolio, Mid-Cap Value
Equity Portfolio, Small Cap Growth Equity Portfolio, Small Cap Value Equity
Portfolio, International Equity Portfolio, Index Equity Portfolio, Balanced
Portfolio, Low Duration Bond Portfolio, Intermediate Government Bond Portfolio,
Intermediate Bond Portfolio, Managed Income Portfolio, GNMA Portfolio, Tax-Free
Income Portfolio, Pennsylvania Tax-Free Income Portfolio, Ohio Tax-Free Income
Portfolio, Kentucky Tax-Free Income Portfolio, Delaware Tax-Free Income
Portfolio and New Jersey Tax-Free Income Portfolio (each, a "BlackRock
Portfolio" and collectively, the "BlackRock Portfolios"); the following common
trust funds for which PNC Bank, National Association ("PNC"), a national banking
association, acts as trustee: PNC Select Equity Fund, PNC Large Cap Growth
Equity Fund, PNC Large Cap Value Equity Fund, PNC Mid Cap Growth Equity Fund,
PNC Mid Cap Value Equity Fund, PNC Small Cap Growth Equity Fund, PNC Small Cap
Value Equity Fund, PNC International Equity Fund, PNC Equity Growth & Income
Fund, PNC Index Equity Fund, PNC Balanced Fund, PNC Income Fund, PNC Short-Term
Government Bond Fund, PNC Short-Term Bond Fund, PNC Intermediate Government Bond
Fund, PNC Intermediate Bond Fund, PNC Managed Income Fund, PNC GNMA Fund, PNC
Tax-Free Income Fund, PNC PA Tax-Free Income Fund, PNC Long-Term PA Tax-Free
Income Fund, PNC OH Tax-Free Income Fund, PNC KY Tax-Free Income Fund and PNC NJ
Tax-Free Income Fund (collectively, the "PNC-NA CTFs"); and the following common
trust fund for which PNC Bank, Delaware ("PNC-DE"), a bank organized under the
laws of the State of Delaware, acts as trustee: PNC-DE Tax-Free Income Fund (the
"PNC-DE CTF" and collectively with the PNC-NA CTFs, the "PNC CTFs").
WHEREAS, BlackRock Funds is an open-end management investment company
registered with the Securities and Exchange Commission (the "SEC") under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, PNC acts as trustee for each of the PNC-NA CTFs; and
WHEREAS, PNC-DE acts as trustee for the PNC-DE CTF; and
WHEREAS, the parties desire that each BlackRock Portfolio shall issue
"Institutional" class shares to the corresponding PNC CTFS, as specified in
Section 1, which shall thereafter be distributed by PNC and PNC-DE,
respectively, to the participating trusts of the corresponding PNC CTFs in
connection with the liquidation of such PNC CTFs as described in this Agreement
in consideration for which the assets and related liabilities of each PNC CTF
shall be conveyed to, and assumed by, the respective BlackRock Portfolio(s)
corresponding thereto as specified in Section 2 (the "BlackRock Share
Acquisition").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and subject to the terms and conditions hereof, the
parties hereto, intending to be legally bound, agree as follows:
1. BlackRock Share Acquisition. Upon receipt of the Consideration (as
defined in Section 2) from a PNC CTF, each corresponding BlackRock Portfolio
which is the recipient of such Consideration shall simultaneously issue such PNC
CTF, at the relevant Effective Time for the BlackRock Share Acquisition as
defined in Section 9 of this Agreement, full and fractional shares of beneficial
interest in such corresponding BlackRock Portfolio's Institutional share class
having an aggregate net asset value equal to the net value of such Consideration
so conveyed, all determined and adjusted as provided in this Section 1. In
particular, each such corresponding BlackRock Portfolio shall deliver to the PNC
CTF conveying such Consideration such number of shares, including fractional
shares, having an aggregate net asset value equal to the value of the
Consideration of such PNC CTF that is so conveyed, with the net asset value of
the shares of the BlackRock Portfolios and the value of the Consideration being
conveyed being computed in the manner and as of the time and date set forth in
this Section.
The net asset value of shares to be issued by each of the BlackRock
Portfolios, and the net value of the Consideration to be conveyed by each of the
PNC CTFs, shall, in each case, be determined as of the relevant Valuation Time
specified in Section 4 and Schedule I of this Agreement. The net asset value of
Institutional class shares of the BlackRock Portfolios shall be computed in the
manner set forth in the BlackRock Portfolios' then current prospectuses under
the Securities Act of 1933, as amended (the "1933 Act"). The net value of the
Consideration to be conveyed by the PNC CTFs shall be computed by PNC. In
determining the value of the securities transferred by the PNC CTFs to the
BlackRock Portfolios, each security shall be valued in accordance with the Rule
17a-7 procedures adopted by the BlackRock Funds Board of Trustees or otherwise
in accordance with applicable positions of the staff of the SEC. In connection
with such valuations, quotations and security characteristics relating to
establishing such quotations shall be determined by or under the direction of
BlackRock Funds, subject to the approval of PNC with respect to the PNC-NA CTFs
and PNC-DE with respect to the PNC-DE CTF.
2. Consideration. At each Effective Time for the BlackRock Share
Acquisition, all property of every description, and all interests, rights,
privileges and powers of each of the PNC CTFs associated with that Effective
Time pursuant to Section 9 and Schedule I of this Agreement, subject to all
liabilities deriving from the assets thereof, and excluding any other
liabilities of the CTFs (such assets subject to such related liabilities are
herein referred to as the "Consideration"), shall be conveyed by each such PNC
CTF to the corresponding BlackRock Portfolio (as set forth below) and shall be
accepted and assumed by said BlackRock Portfolio as more particularly set forth
in the following paragraph, such that at and after that Effective Time: (a) all
assets of each such PNC CTF shall become and be the assets of the respective
corresponding BlackRock Portfolio; and (b) all such related liabilities and
obligations of each such PNC CTF that are so existing shall attach to the
respective corresponding BlackRock Portfolio as aforesaid and may thenceforth be
enforced against the respective BlackRock Portfolio to the extent as if the same
had been incurred by it; provided, that, in the case of the PNC Income CTF, it
is understood for purposes of this Agreement that the term "corresponding
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BlackRock Portfolio" shall refer to the two BlackRock Portfolios indicated in
the chart below, each of which shall receive that percentage of the assets and
any related liabilities being transferred of the PNC Income CTF such that all
equity assets and related liabilities thereof shall be conveyed to the Large Cap
Value Equity Portfolio and all cash, fixed income assets and related liabilities
thereof shall be conveyed to the Managed Income Portfolio.
Without limiting the generality of the foregoing, it is understood that the
Consideration shall include all property and assets of any nature whatsoever,
including, without limitation, all cash, cash equivalents, securities, claims
and receivables (including dividend and interest receivables) owned by each PNC
CTF, and any deferred or prepaid expenses shown as an asset on each PNC CTF's
books, at the relevant Effective Time, and all good will, all other intangible
property and all books and records belonging to the PNC CTFs.
In particular, the Consideration of each PNC CTF shall be conveyed to the
corresponding BlackRock Portfolio, as set forth below:
PNC CTF CORRESPONDING BLACKROCK PORTFOLIO(S)
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PNC Select Equity Fund Select Equity Portfolio
PNC Large Cap Growth Equity Fund Large Cap Growth Equity Portfolio
PNC Large Cap Value Equity Fund Large Cap Value Equity Portfolio
PNC Mid Cap Growth Equity Fund Mid-Cap Growth Equity Portfolio
PNC Mid Cap Value Equity Fund Mid-Cap Value Equity Portfolio
PNC Small Cap Growth Equity Fund Small Cap Growth Equity Portfolio
PNC Small Cap Value Equity Fund Small Cap Value Equity Portfolio
PNC International Equity Fund International Equity Portfolio
PNC Equity Growth & Income Fund Large Cap Value Equity Portfolio
PNC Index Equity Fund Index Equity Portfolio
PNC Balanced Fund Balanced Portfolio
PNC Income Fund Managed Income; Large Cap Value Equity
PNC Short Term Government Bond Fund Low Duration Bond Portfolio
PNC Short Term Bond Fund Low Duration Bond Portfolio
PNC Intermediate Government Bond Fund Intermediate Government Bond Portfolio
PNC Intermediate Bond Fund Intermediate Bond Portfolio
PNC Managed Income Fund Managed Income Portfolio
PNC GNMA Fund GNMA Portfolio
PNC Tax-Free Income Fund Tax-Free Income Portfolio
PNC PA Tax-Free Income Fund Pennsylvania Tax-Free Income Portfolio
PNC Long-Term PA Tax-Free Income Fund Pennsylvania Tax-Free Income Portfolio
PNC OH Tax-Free Income Fund Ohio Tax-Free Income Portfolio
PNC KY Tax-Free Income Fund Kentucky Tax-Free Income Portfolio
PNC DE Tax-Free Income Fund Delaware Tax-Free Income Portfolio
PNC NJ Tax-Free Income Fund New Jersey Tax-Free Income Portfolio
3. Liquidation and Dissolution of PNC CTFs. At each Effective Time, each
of the PNC CTFs associated with that Effective Time pursuant to Section 9 and
Schedule I of this Agreement shall make a liquidating distribution to its
participating trusts as follows. Holders of record as of that Valuation Time of
units of each such PNC CTF shall be credited with full and fractional shares of
the Institutional class of beneficial interest that are issued by the
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corresponding BlackRock Portfolio in connection with the BlackRock Share
Acquisition in exchange for the PNC CTF units that are held of record. In
addition, each participating trust holding record units of a PNC CTF shall have
the right to receive any unpaid distributions which were declared before the
relevant Effective Time with respect to the units of such PNC CTF that are held
by the participating trust at that Effective Time. In accordance with
instructions it receives from PNC and PNC-DE, respectively, BlackRock Funds
shall record on its books the ownership of the respective BlackRock Portfolio
shares as of the relevant Valuation Times of the PNC CTFs. Following
consummation of the BlackRock Share Acquisition, PNC and PNC-DE, respectively,
shall take such steps as shall be necessary and proper to effect the dissolution
of the PNC CTFs.
4. Valuation Times. The Valuation Time for the BlackRock Share
Acquisition with respect to each of the PNC CTFs and the corresponding BlackRock
Portfolios shall be 4:01 P.M. Eastern Time, on the respective date set forth on
Schedule I hereto or such earlier or later date as agreed to by the parties to
this Agreement.
5. Certain Representations, Warranties and Agreements of BlackRock Funds.
BlackRock Funds, on behalf of itself and the BlackRock Portfolios, represents
and warrants to, and agrees with, PNC and PNC-DE as follows (such
representations, warranties and agreements being made on behalf of each
BlackRock Portfolio on a several and not joint, nor joint and several, basis):
(a) BlackRock Funds is a Massachusetts business trust duly created
pursuant to its Declaration of Trust for the purpose of acting as a
management investment company under the 1940 Act, and is validly existing
under the laws of the Commonwealth of Massachusetts. BlackRock Funds is
registered as an open-end management investment company under the 1940 Act
and its registration with the SEC as an investment company is in full force
and effect.
(b) BlackRock Funds has the power to own all of its properties and
assets and to consummate the transactions contemplated herein, and has all
necessary federal, state and local authorizations to carry on its business
as now being conducted and to consummate the transactions contemplated by
this Agreement.
(c) This Agreement has been duly authorized, executed and delivered by
BlackRock Funds, and represents a valid and binding contract, enforceable
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement will not, violate BlackRock Funds' Declaration of Trust, as
amended, or the Code of Regulations or any agreement or arrangement to
which BlackRock Funds is a party or by which it is bound.
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(d) Each BlackRock Portfolio that has not conducted operations prior
to the associated Effective Time for the BlackRock Share Acquisition
intends to qualify as a regulated investment company under Part I of
Subchapter M of Subtitle A, Chapter 1 of the Code ("Subchapter M"). Each
BlackRock Portfolio that has conducted operations prior to the associated
Effective Time for the BlackRock Share Acquisition has elected to qualify
and has qualified as a regulated investment company under Subchapter M as
of and since its first taxable year, has been a regulated investment
company under such Part of the Code at all times since the end of its first
taxable year when it so qualified, and qualifies and shall continue to
qualify as a regulated investment company for its current taxable year.
(e) The audited financial statements of BlackRock Funds for its fiscal
year ended September 30, 1997 present fairly the financial position of the
BlackRock Portfolios as of the dates indicated and the results of their
operations for the periods indicated, in conformity with generally accepted
accounting principles applied on a consistent basis. There has been no
material adverse change in the financial position of any BlackRock
Portfolio since the dates of said financial statements.
(f) Each BlackRock Portfolio has valued, and will continue to value,
its portfolio securities and other assets in accordance with applicable
legal requirements.
(g) There are no material legal, administrative or other proceedings
pending or, to its knowledge, threatened, against BlackRock Funds or the
BlackRock Portfolios which could result in liability on the part of
BlackRock Funds or the BlackRock Portfolios.
(h) At each Effective Time, all federal and other tax returns and
reports of each associated BlackRock Portfolio required by law to have been
filed by such time shall have been filed, and all federal and other taxes
shall have been paid so far as due, or provision shall have been made for
the payment thereof and, to the best knowledge of each such BlackRock
Portfolio, no such return or report shall be currently under audit and no
assessment shall have been asserted with respect to such returns or
reports.
(i) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by BlackRock Funds
of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act, the 1940 Act, and the rules and regulations
under those Acts, or state securities laws.
(j) BlackRock Funds shall have filed a post-effective amendment (the
"N-1A Post-Effective Amendment") to its registration statement on Form N-1A
(File No. 33-26305) with the SEC, and with the appropriate state securities
commissions, relating to the establishment of Delaware Tax-Free Income
Portfolio, Kentucky Tax-Free Income Portfolio and GNMA Portfolio. The N-1A
Post-Effective Amendment on its effective date with the SEC, and at each
Effective Time (i) shall comply in all material respects with the
provisions of the 1933 Act and the 1940 Act, the rules and regulations
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thereunder, and the state securities laws, and (ii) shall not contain any
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.
(k) The shares of each BlackRock Portfolio to be issued and delivered
to the PNC CTFs for the account of the participating trusts of the PNC
CTFs, pursuant to the terms hereof, shall have been duly authorized as of
the associated Effective Time and, when so issued and delivered, shall be
duly and validly issued, fully paid and non-assessable, and no shareholder
of such BlackRock Fund shall have any preemptive right to subscription or
purchase in respect thereto.
(l) Each BlackRock Fund shall operate its business in the ordinary
course between the date hereof and its associated Effective Time. It is
understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions and any
other dividends and distributions deemed advisable.
6. Certain Representations, Warranties and Agreements of PNC and PNC-DE.
Each of PNC and PNC-DE, respectively, on behalf of itself and the PNC CTFs for
which it acts as trustee, represents and warrants to, and agrees with, BlackRock
Funds as follows (such representations, warranties and agreements being made on
behalf of the PNC CTFs on a several and not joint, nor joint and several,
basis):
(a) PNC is a national banking association duly organized and validly
existing under the laws of the United States. PNC-DE is a bank duly
organized and validly existing under the laws of the State of Delaware.
(b) Each of PNC and PNC-DE, in its capacity as trustee for the
respective PNC CTFs, has the power to direct the investment of the
Consideration and, subject to any required consents of the participating
trusts referred to in Section 7, to carry out and consummate the
transactions contemplated herein, and has all necessary federal, state and
local authorizations to carry on its business as now being conducted and to
consummate the transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized, executed and delivered by
PNC and PNC-DE, respectively, on behalf of the PNC CTFs, and represents a
valid and binding contract, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement will not,
violate the articles of association or by-laws of PNC, the organization
certificate or by-laws of PNC-DE or, except as previously disclosed to
BlackRock Funds in writing, any agreement or arrangement to which PNC or
PNC-DE, respectively, is a party or by which it is bound.
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(d) Each PNC CTF is a "common trust fund" within the meaning of
Section 584(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
(e) The most recently available audited financial statements of the
PNC CTFs (copies of which have been previously furnished to BlackRock
Funds), present fairly the financial position of the PNC CTFs as of the
dates indicated and the results of their operations for the periods
indicated, in conformity with generally accepted accounting principles
applied on a consistent basis. There has been no material adverse change
in the financial position of any PNC CTF since the dates of said financial
statements.
(f) Except as previously disclosed to BlackRock Funds in writing,
there are no contingent liabilities of any PNC CTF not disclosed in said
financial statements delivered pursuant to Section 6(e).
(g) Each PNC CTF has valued, and will continue to value, its portfolio
securities and other assets in accordance with applicable legal
requirements.
(h) Except as previously disclosed to BlackRock Funds in writing,
there are no material legal, administrative or other proceedings pending
or, to its knowledge threatened, against PNC, PNC-DE or the PNC CTFs which
could result in liability on the part of PNC, PNC-DE or the PNC CTFs.
(i) At each associated Effective Time, all federal and other tax
returns and reports of each associated PNC CTF required by law to have been
filed by such PNC CTF by such time shall have been filed, and all federal
and other taxes shall have been paid so far as due, or provision shall have
been made for the payment thereof and, to the best knowledge of each such
PNC CTF, no such return or report of such PNC CTF shall be currently under
audit and no assessment shall have been asserted with respect to such
return or reports.
(j) At both each Valuation Time and each corresponding Effective Time,
PNC and PNC-DE, respectively, shall have full right, power and authority to
convey the respective associated Consideration in payment for the shares of
the BlackRock Portfolios as contemplated herein and, upon conveyance, the
BlackRock Portfolios shall have good and marketable title thereto, subject
to no restrictions on the ownership or transfer thereof (except as imposed
by federal, state or foreign securities laws).
(k) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the PNC CTFs of
the transactions contemplated by this Agreement.
(l) The PNC CTFs shall not sell or otherwise dispose of any shares of
the BlackRock Portfolios to be acquired in the transactions contemplated
herein, except in distribution to the participating trusts of the PNC CTFs
as contemplated herein.
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(m) The business of each PNC CTF shall be conducted in the ordinary
course between the date hereof and its associated Effective Time. It is
understood that such ordinary course of business will include the
declaration and payment of customary distributions and any other
distributions deemed advisable.
(n) Except for agreements or other arrangements relating to the
purchase and sale of portfolio securities, each PNC CTF has furnished
BlackRock Funds with copies or descriptions of all material contracts or
legally binding arrangements to which it is a party and which relate to
such PNC CTF.
(o) Each PNC CTF has delivered to BlackRock Funds a statement of all
of the specific assets and specific related liabilities of the PNC CTFs,
together with a list of the portfolio securities of each PNC CTF showing
the tax costs of such securities by lot and the holding periods of such
securities, and clearly reflecting the basis used for determination of gain
or loss realized on the partial sale of any security. Each PNC CTF shall
immediately notify BlackRock Funds of any portfolio security thereafter
acquired or sold by the PNC CTF and, upon BlackRock Funds' request, shall
promptly and periodically update the other information described in this
paragraph. Upon notice by BlackRock Funds, each PNC CTF shall immediately
sell any portfolio security that BlackRock Funds identifies as
impermissible under the investment policies, objectives and limitations of
the corresponding BlackRock Portfolio.
7. CTF Consents. Prior to each Effective Time, PNC, PNC-DE and the PNC
CTFs shall provide such notice and disclosure and obtain such consents as shall
be required under applicable law to effect the BlackRock Share Acquisition with
respect to the associated PNC CTFs and BlackRock Funds.
8. Exemptive Relief. BlackRock Funds and PNC shall have filed an
application for an order of exemption under the 1940 Act (the "Exemptive
Application") with the SEC to the extent necessary in order to effect the
BlackRock Share Acquisition, and shall cooperate with each other in connection
with obtaining such order of exemption.
9. Effective Times for the BlackRock Share Acquisition. The shares of
the BlackRock Portfolios to be issued and the conveyance of the Consideration
pursuant to Sections 1 and 2 and the liquidation and dissolution of the PNC CTFs
pursuant to Section 3 shall occur on three dates, in each case on the next
business day following the respective Valuation Time for each PNC CTF set forth
on Schedule I hereto, or on such other date, and at such place and time, agreed
to by each of the parties. The three dates and times at which such actions are
taken are each referred to herein as an "Effective Time."
10. BlackRock Funds Conditions. The obligations of BlackRock Funds
hereunder shall be subject to the following conditions precedent with respect to
each Effective Time:
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(a) This Agreement and the transactions contemplated by this Agreement
shall have been approved by PNC and PNC-DE, on behalf of the respective
associated PNC CTFs and any consents referred to in Section 7 shall have
been obtained.
(b) Each associated PNC CTF shall have delivered to its corresponding
BlackRock Portfolio a statement of the specific assets and specific
liabilities of the PNC CTF, together with a list of the portfolio
securities of the PNC CTF showing the tax costs of such securities by lot
and the holding periods of such securities, as of the associated Valuation
Time, and clearly reflecting the basis used for determination of gain or
loss realized on the partial sale of any security transferred to such
BlackRock Portfolios.
(c) The associated PNC CTFs shall have duly executed and delivered to
BlackRock Funds such bills of sale, assignments, certificates and other
instruments of conveyance as BlackRock Funds may deem necessary or
desirable to convey all of each such PNC CTF's right, title and interest in
and to the Consideration. Such Consideration shall be accompanied by all
necessary documentation to evidence that any required duties or taxes have
been paid or cash for the appropriate amount thereof.
(d) As of the related Valuation Time and such Effective Time, there
shall have been no material adverse change in the financial position of any
associated PNC CTF since the dates of the financial statements referred to
in Section 6(e).
(e) All representations and warranties of PNC and PNC-DE,
respectively, and the PNC CTFs made in this Agreement shall be true and
correct in all material respects as if made at and as of the related
Valuation Time and such Effective Time.
(f) Each of the associated PNC CTFs shall have delivered to BlackRock
Funds a certificate executed on its behalf by an appropriate officer of PNC
or PNC-DE, as the case may be, in a form reasonably satisfactory to
BlackRock Funds and dated as of such Effective Time, to the effect that the
representations and warranties of such PNC CTF made in this Agreement are
true and correct at and as of such Effective Time.
(g) The Consideration to be conveyed to a BlackRock Portfolio as of
such Effective Time under this Agreement shall include no assets which such
BlackRock Portfolio may not properly hold pursuant to its investment
limitations or objectives or may not otherwise lawfully hold.
(h) The N-1A Post-Effective Amendment shall have become effective
under the 1933 Act and no stop order suspending such effectiveness shall
have been instituted or, to the knowledge of BlackRock Funds, contemplated
by the SEC and the parties shall have received all permits and other
authorizations necessary under federal and state securities laws to
consummate the transactions contemplated by this Agreement.
(i) An order granting substantially the relief requested pursuant to
the Exemptive Application shall have been issued under the 1940 Act.
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(j) No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain
or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
(k) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have rendered a legal opinion,
dated on or before such Effective Time, as to certain of the federal income
tax consequences under the Code of the BlackRock Share Acquisition.
(l) Coopers & ▇▇▇▇▇▇▇ L.L.P. shall have rendered an opinion, dated on
or before such Effective Time, as to certain of the federal income tax
consequences under the Code of the BlackRock Share Acquisition.
(m) Each of the associated PNC CTFs shall have performed and complied
in all material respects with each of its agreements and covenants required
by this Agreement to be performed or complied with by it prior to or at the
related Valuation Time and such Effective Time.
11. PNC CTF Conditions. The obligations of the PNC CTFs hereunder shall
be subject to the following conditions precedent with respect to each Effective
Time:
(a) This Agreement shall have been adopted and the transactions
contemplated by this Agreement shall have been approved by the Board of
Trustees of BlackRock Funds.
(b) As of the related Valuation Time and such Effective Time there
shall have been no material adverse change in the financial position of any
associated BlackRock Portfolio since the dates of the financial statements
referred to in Section 5(e).
(c) All representations and warranties of BlackRock Funds and the
associated BlackRock Portfolios made in this Agreement shall be true and
correct in all material respects as if made at and as of the related
Valuation Time and such Effective Time.
(d) BlackRock Funds shall have delivered to the associated PNC CTFs a
certificate executed in its name by an appropriate officer, in a form
reasonably satisfactory to such PNC CTFs and dated as of such Effective
Time, to the effect that the representations and warranties of BlackRock
Funds and the relevant associated BlackRock Portfolios made in this
Agreement are true and correct at and as of such Effective Time and that,
to its best knowledge, the Consideration to be conveyed as of such
Effective Time to each such BlackRock Portfolio under this Agreement as set
forth in Section 10(b) include only assets which such BlackRock Portfolio
may properly acquire under its investment policies, limitations and
objectives and may otherwise be lawfully held by such BlackRock Portfolio.
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(e) The N-1A Post-Effective Amendment shall have become effective
under the 1933 Act and no stop order suspending the effectiveness shall
have been instituted, or to the knowledge of BlackRock Funds, contemplated
by the SEC and the parties shall have received all permits and other
authorizations necessary under federal and state securities laws to
consummate the transactions contemplated herein.
(f) An order granting substantially the relief requested pursuant to
the Exemptive Application shall have been issued under the 1940 Act.
(g) No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain
or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
(h) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have rendered a legal opinion as
to the matters referred to in Section 10(k).
(i) Coopers & ▇▇▇▇▇▇▇ L.L.P. shall have rendered an opinion as to the
matters referred to in Section 10(l).
(j) BlackRock Funds shall have performed and complied in all material
respects with each of its agreements and covenants required by this
Agreement to be performed or complied with by it prior to or at the related
Valuation Time and such Effective Time.
12. Further Assurances. Subject to the terms and conditions herein
provided, each of the parties hereto shall use its best efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated by this Agreement, including without limitation,
delivering and/or causing to be delivered to the other party hereto each of the
items required under this Agreement as a condition to such party's obligations
hereunder.
13. Termination of Representations and Warranties. The representations
and warranties of and with respect to each BlackRock Portfolio and each PNC CTF
set forth in this Agreement shall terminate upon the acquisition of the shares
of the relevant BlackRock Portfolios and the conveyance of the Consideration to
the relevant BlackRock Portfolios at the associated Effective Time, and the
representations and warranties of BlackRock Funds, PNC and PNC-DE shall
terminate at the final Effective Time.
14. Termination of Agreement. This Agreement may be terminated by a party
at any time at or prior to any Effective Time as provided below:
11
(a) By PNC, as to any associated PNC-NA CTF's participation in the
BlackRock Share Acquisition, if PNC determines that proceeding with the
BlackRock Share Acquisition with respect to such PNC-NA CTF is not in the
best interests of such PNC-NA CTF or participating trusts therein;
(b) By PNC-DE, as to the PNC-DE CTF's participation in the BlackRock
Share Acquisition, but only at or prior to the associated Effective Time,
if PNC-DE determines that proceeding with the BlackRock Share Acquisition
with respect to the PNC-DE CTF is not in the best interests of the PNC-DE
CTF or participating trusts therein;
(c) By BlackRock Funds, as to any associated BlackRock Portfolio's
participation in the BlackRock Share Acquisition, if the Board of Trustees
of BlackRock Funds determines that proceeding with the BlackRock Share
Acquisition with respect to such BlackRock Portfolio is not in the best
interests of such BlackRock Portfolio or its shareholders;
(d) By BlackRock Funds, as to any associated BlackRock Portfolio's
participation in the BlackRock Share Acquisition, if the conditions set
forth in Section 10 are not satisfied as specified in Section 10 with
respect to the BlackRock Share Acquisition as it relates to such BlackRock
Portfolio;
(e) By any associated PNC CTF, as to its participation in the
BlackRock Share Acquisition, if the conditions set forth in Section 11 are
not satisfied as specified in Section 11 with respect to the BlackRock
Share Acquisition as it relates to such PNC CTF; or
(f) By mutual consent of each of the parties hereto.
15. Amendment and Waiver. The parties hereto may, by written agreement,
amend any of the provisions of this Agreement, and either party may waive any
breach by the other party or the failure to satisfy any of the conditions to its
obligations (such waiver to be in writing).
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
17. Successors and Assigns. This Agreement shall be binding upon the
respective successors and permitted assigns of the parties hereto. This
Agreement and the rights, obligations and liabilities hereunder may not be
assigned by either party without the consent of the other party.
18. Beneficiaries. Nothing contained in this Agreement shall be deemed to
create rights in persons not parties hereto, other than the successors and
permitted assigns of the parties.
12
19. Brokerage Fees and Expenses. Each of the PNC CTFs and BlackRock Funds
represents and warrants to the other that there are no brokers or finders
entitled to receive any payments in connection with the transactions provided
for herein.
20. BlackRock Funds Liability. The names "BlackRock Funds" and "Trustees
of the BlackRock Funds" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated December 22, 1988 which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of the Trust.
The obligations of "BlackRock Funds" entered into in the name of or on behalf
thereof by any of its Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust Property (as defined in the Declaration of
Trust), and all persons dealing with any class of shares of the Trust must look
solely to the Trust Property belonging to such class for the enforcement of any
claims against the Trust. The parties hereto specifically acknowledge and agree
that any liability of BlackRock Funds under this Agreement in connection with
the transactions contemplated herein with respect to a BlackRock Portfolio or
its corresponding PNC CTF shall be discharged only out of the assets of that
BlackRock Portfolio and that no other portfolio of BlackRock Funds shall be
liable with respect thereto.
21. PNC Liability. The obligations of each PNC CTF entered into in the
name or on behalf thereof by any of the trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the trustees, interest holders or representatives of the common trust funds
personally, but bind only the assets of such PNC CTF.
22. Notices. All notices required or permitted herein shall be in writing
and shall be deemed to be properly given when delivered personally or by
telecopier to the party entitled to receive the notice or when sent by certified
or registered mail, postage prepaid, or delivered to an internationally
recognized overnight courier service, in each case properly addressed to the
party entitled to receive such notice at the address or telecopier number stated
below or to such other address or telecopier number as may hereafter be
furnished in writing by notice similarly given by one party to the other party
thereto:
(a) If to BlackRock Funds:
BlackRock Advisors, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copies to:
BlackRock Funds
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) If to the PNC-NA CTFs:
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer
PNC Private Bank
14
With copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
PNC Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 28th Floor
F2-F070-28-1
Philadelphia, PA 19103
(c) If to the PNC-DE CTF
PNC Bank, Delaware
c/o PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer
PNC Private Bank
With copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
PNC Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇▇▇-▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
23. Expenses. To the extent not otherwise agreed to by the parties, each
party shall be responsible for the payment of all expenses incurred by such
party in connection with this Agreement and the transactions contemplated
hereby.
24. Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to matters provided for herein.
25. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
15
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the date first
written above.
BLACKROCK FUNDS
On behalf of each of
the BlackRock Funds Portfolios
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Trustee, President and Treasurer
PNC SELECT EQUITY FUND
PNC LARGE CAP GROWTH EQUITY FUND
PNC LARGE CAP VALUE EQUITY FUND
PNC MID CAP GROWTH EQUITY FUND
PNC MID CAP VALUE EQUITY FUND
PNC SMALL CAP GROWTH EQUITY FUND
PNC SMALL CAP VALUE EQUITY FUND
PNC INTERNATIONAL EQUITY FUND
PNC EQUITY GROWTH & INCOME FUND
PNC INDEX EQUITY FUND
PNC BALANCED FUND
PNC INCOME FUND
PNC SHORT TERM GOVERNMENT BOND
FUND
PNC SHORT TERM BOND FUND
PNC INTERMEDIATE GOVERNMENT BOND
FUND
PNC INTERMEDIATE BOND FUND
PNC MANAGED INCOME FUND
PNC GNMA FUND
PNC TAX-FREE INCOME FUND
PNC PA TAX-FREE INCOME FUND
PNC LONG-TERM PA TAX-FREE INCOME
FUND
PNC OH TAX-FREE INCOME FUND
PNC KY TAX-FREE INCOME FUND
PNC NJ TAX-FREE INCOME FUND
By: PNC BANK, NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
PNC-DE TAX-FREE INCOME FUND
By: PNC BANK, DELAWARE, as Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Schedule I
----------
PNC CTF CORRESPONDING BLACKROCK PORTFOLIO(S) VALUATION TIME
------- ------------------------------------ --------------
PNC Select Equity Fund Select Equity Portfolio May 1, 1998
PNC Large Cap Growth Equity Fund Large Cap Growth Equity Portfolio May 1, 1998
PNC Large Cap Value Equity Fund Large Cap Value Equity Portfolio May 1, 1998
PNC Mid Cap Growth Equity Fund Mid-Cap Growth Equity Portfolio May 1, 1998
PNC Mid Cap Value Equity Fund Mid-Cap Value Equity Portfolio May 1, 1998
PNC Small Cap Growth Equity Fund Small Cap Growth Equity Portfolio May 1, 1998
PNC Small Cap Value Equity Fund Small Cap Value Equity Portfolio May 1, 1998
PNC International Equity Fund International Equity Portfolio May 1, 1998
PNC Equity Growth & Income Fund Large Cap Value Equity Portfolio May 1, 1998
PNC Index Equity Fund Index Equity Portfolio May 1, 1998
PNC Balanced Fund Balanced Portfolio May 15, 1998
PNC Income Fund Managed Income; Large Cap Value Equity May 15, 1998
PNC Short Term Government Bond Fund Low Duration Bond Portfolio May 15, 1998
PNC Short Term Bond Fund Low Duration Bond Portfolio May 15, 1998
PNC Intermediate Government Bond Fund Intermediate Government Bond Portfolio May 15, 1998
PNC Intermediate Bond Fund Intermediate Bond Portfolio May 15, 1998
PNC Managed Income Fund Managed Income Portfolio May 15, 1998
PNC GNMA Fund GNMA Portfolio May 15, 1998
PNC Tax-Free Income Fund Tax-Free Income Portfolio May 8, 1998
PNC PA Tax-Free Income Fund Pennsylvania Tax-Free Income Portfolio May 8, 1998
PNC Long-Term PA Tax-Free Income Fund Pennsylvania Tax-Free Income Portfolio May 8, 1998
PNC OH Tax-Free Income Fund Ohio Tax-Free Income Portfolio May 8, 1998
PNC KY Tax-Free Income Fund Kentucky Tax-Free Income Portfolio May 8, 1998
PNC DE Tax-Free Income Fund Delaware Tax-Free Income Portfolio May 8, 1998
PNC NJ Tax-Free Income Fund New Jersey Tax-Free Income Portfolio May 8, 1998