BlackRock Strategic High Yield Trust
(a Delaware business trust)
[ ] Common Shares of Beneficial Interest
(Par Value $.001 Per Share)
FORM OF PURCHASE AGREEMENT
_______, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
BlackRock Strategic High Yield Trust, a Delaware business trust (the
"Trust"), the Trust's investment adviser, BlackRock Advisors, Inc., a Delaware
corporation ("BAI"), and its investment sub-adviser, BlackRock Financial
Management, Inc., a Delaware corporation ("BFM") (each, an "Adviser" and
together, the "Advisers"), each confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of
the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as
representative (in such capacity, the "Representative"), with respect to the
issue and sale by the Trust and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of common shares of
beneficial interest, par value $.001 per share, of the Trust ("Common Shares")
set forth in said SCHEDULE A, and with respect to the grant by the Trust to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [ ] additional Common Shares
to cover over-allotments, if any. The aforesaid [ ] Common Shares (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the [ ]
Common Shares subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities."
The Trust understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deem advisable after
this Agreement has been executed and delivered.
The Trust has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-[ ] and No. 811-[ ])
covering the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses, and a notification on Form N-8A of registration of the Trust as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the rules and regulations of the Commission under the 1933 Act
and the 1940 Act (the "Rules and Regulations"). Promptly after execution and
delivery of this Agreement, the Trust will either (i) prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
Rules and Regulations and paragraph (c) or (h) of Rule 497 ("Rule 497") of the
Rules and Regulations or (ii) if the Trust has elected to rely upon Rule 434
("Rule 434") of the Rules and Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 497. The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such
registration statement at the time it became effective, if applicable, (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the Securities, including the
statement of additional information incorporated therein by reference, is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated [ ] together with the Term Sheet and
all references in this Agreement to the date of the Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE TRUST AND THE ADVISERS. The
Trust and the Advisers jointly and severally represent and warrant
to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agree
with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has
been issued under the 1933 Act, or order of suspension or
revocation of registration pursuant to Section 8(e) of the
1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Trust
or the Advisers, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement, the
Rule 462(b) Registration Statement, the notification of Form N-8A and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act, the 1940 Act and
the Rules and Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any
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amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Trust will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 497 under the 1933 Act,
complied when so filed in all material respects with the Rules and
Regulations and each preliminary prospectus and the Prospectus delivered
to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Trust has complied or
will comply with the requirements of Rule 111 under the 1933 Act
Regulations relating to the payment of filing fees thereof.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the statement of assets and liabilities included in the
Registration Statement are independent public accountants
as required by the 1933 Act and the Rules and Regulations.
(iii) FINANCIAL STATEMENTS. The statement of assets and
liabilities included in the Registration Statement and the
Prospectus, together with the related notes, presents
fairly the financial position of the Trust at the date
indicated; said statement has been prepared in conformity
with generally accepted accounting principles ("GAAP").
(iv) EXPENSE SUMMARY. The information set forth in the
Prospectus in the Fee Table has been prepared in accordance
with the requirements of Form N-2 and to the extent
estimated or projected, such estimates or projections are
reasonably believed to be attainable and reasonably based.
(v) NO MATERIAL ADVERSE CHANGE. Since the respective dates as
of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business
affairs or business prospects of the Trust, whether or not
arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions
entered into by the Trust, other than those in the ordinary
course of business, which are material with respect to the
Trust, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Trust on any
class of its capital stock.
(vi) GOOD STANDING OF THE TRUST. The Trust has been duly
organized and is validly existing as a business trust in
good standing under the laws of the State of Delaware and
has business trust power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Trust is duly
qualified as a foreign business trust to transact business
and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason
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of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse
Effect.
(vii) NO SUBSIDIARIES. The Trust has no subsidiaries.
(viii) INVESTMENT COMPANY STATUS. The Trust is duly registered
with the Commission under the 1940 Act as a closed-end
diversified management investment company, and no order of
suspension or revocation of such registration has been
issued or proceedings therefor initiated or threatened by
the Commission.
(ix) OFFICERS AND TRUSTEES. No person is serving or acting as
an officer, trustee or investment adviser of the Trust
except in accordance with the provisions of the 1940 Act
and the 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").
Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of
them), no trustee 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.
(x) CAPITALIZATION. The authorized, issued and outstanding
shares of beneficial interest of the Trust is as set forth
in the Prospectus as of the date thereof under the caption
"Description of Shares." All issued and outstanding shares
of beneficial interest of the Trust have been duly
authorized and validly issued and are fully paid and
non-assessable, except as provided for in the Trust's
declaration of trust, and have been offered and sold or
exchanged by the Trust in compliance with all applicable
laws (including, without limitation, federal and state
securities laws); none of the outstanding shares of
beneficial interest of the Trust was issued in violation of
the preemptive or other similar rights of any
securityholder of the Trust.
(xi) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The
Securities to be purchased by the Underwriters from the
Trust have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when
issued and delivered by the Trust pursuant to this
Agreement against payment of the consideration set forth
herein, will be validly issued and fully paid and
non-assessable, except as provided for in the Trust's
declaration of trust. The Common Shares conform to all
statements relating thereto contained in the Prospectus and
such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities
will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not
subject to the preemptive or other similar rights of any
securityholder of the Trust.
(xii) ABSENCE OF DEFAULTS AND CONFLICTS. The Trust is not in
violation of its declaration of trust or by-laws, or in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to
which it is a party or by which it may be bound, or to
which any of the property or assets of the Trust is subject
(collectively, "Agreements and Instruments") except for
such violations or defaults that would
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not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Custodian
Agreement and the Transfer Agent and Service Agreement
referred to in the Registration Statement (as used herein,
the "Management Agreement," the "Sub-Advisory Agreement",
the "Custodian Agreement" and the "Transfer Agency
Agreement," respectively) and the consummation of the
transactions contemplated herein and in the Registration
Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Trust with its
obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default
or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Trust
pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of
the provisions of the declaration of trust or by-laws of
the Trust or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign,
having jurisdiction over the Trust or any of its assets,
properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Trust.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by
any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Trust or
the Advisers, threatened, against or affecting the Trust,
which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets of the Trust
or the consummation of the transactions contemplated in
this Agreement or the performance by the Trust of its
obligations hereunder. The aggregate of all pending legal
or governmental proceedings to which the Trust is a party
or of which any of its property or assets is the subject
which are not described in the Registration Statement,
including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a
Material Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits
thereto by the 1933 Act, the 1940 Act or by the Rules and
Regulations which have not been so described and filed as
required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Trust owns or
possesses, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service
marks, trade names or other intellectual property
5
(collectively, "Intellectual Property") necessary to carry
on the business now operated by the Trust, and the Trust
has not received any notice or is not otherwise aware of
any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of
the Trust therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect; provided that
the Trust's right to use the name "BlackRock" is limited as
set forth in Section 16 of the Management Agreement.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency is necessary or required
for the performance by the Trust of its obligations
hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as
have been already obtained or as may be required under the
1933 Act, the 1940 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or state securities
laws.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Trust possesses
such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to operate its
properties and to conduct the business as contemplated in
the Prospectus; the Trust is in compliance with the terms
and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be
in full force and effect would not have a Material Adverse
Effect; and the Trust has not received any notice of
proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse
Effect.
(xviii) ADVERTISEMENTS. Any advertising, sales literature or
other promotional material (including "prospectus
wrappers", "broker kits," "road show slides" and "road show
scripts") authorized in writing by or prepared by the Trust
or the Advisers used in connection with the public offering
of the Securities (collectively, "sales material") 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 therein not misleading.
Moreover, all sales material complied and will 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 National Association
of Securities Dealers, Inc. ("NASD").
(xix) SUBCHAPTER M. The Trust intends to direct the investment
of the proceeds of the offering described in the
Registration Statement in such a manner as to comply with
the requirements of Subchapter M of the Internal Revenue
Code of 1986, as amended ("Subchapter M of the Code" and
the "Code," respectively),
6
and intends to qualify as a regulated investment company
under Subchapter M of the Code.
(xx) MATERIAL AGREEMENTS. This Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Custodian
Agreement and the Transfer Agency Agreement have each been
duly authorized by all requisite action on the part of the
Trust, executed and delivered by the Trust, as of the dates
noted therein and each complies with all applicable
provisions of the 1940 Act. Assuming due authorization,
execution and delivery by the other parties thereto with
respect to the Custodian Agreement and the Transfer Agency
Agreement, each of the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement and the
Transfer Agency Agreement constitutes a valid and binding
agreement of the Trust, enforceable in accordance with its
terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered
in a proceeding in equity or at law).
(xxi) REGISTRATION RIGHTS. There are no persons with
registration rights or other similar rights to have any
securities registered pursuant to the Registration
Statement or otherwise registered by the Trust under the
1933 Act.
(xxii) NYSE LISTING. The Securities have been duly authorized
for listing, upon notice of issuance, on the New York Stock
Exchange ("NYSE") and the Trust's registration statement on
Form 8-A under the 1934 Act has become effective.
(b) REPRESENTATIONS AND WARRANTIES BY THE ADVISERS. The Advisers
represent and warrant to each Underwriter as of the date hereof,
as of the Closing Time referred to in Section 2(c) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b)
hereof as follows:
(i) GOOD STANDING OF THE ADVISERS. Each of the Advisers has
been duly organized and is validly existing and in good
standing as corporations 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 Prospectus and each is duly
qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which
such qualification is required.
(ii) INVESTMENT ADVISER STATUS. Each of Advisers is duly
registered and in good standing with the Commission as an
investment adviser under the Advisers Act, and is not
prohibited by the Advisers Act or the 1940 Act, or the
rules and regulations under such acts, from acting under
the Management Agreement and the Sub-Advisory Agreement for
the Trust as contemplated by the Prospectus.
(iii) DESCRIPTION OF ADVISERS. 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
is true and correct and does not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
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(iv) CAPITALIZATION. Each of the Advisers has the financial
resources available to it necessary for the performance of
its services and obligations as contemplated in the
Prospectus, this Agreement and under the respective
Management Agreement and the Sub-Advisory Agreement to
which it is a party.
(v) AUTHORIZATION OF AGREEMENTS; ABSENCE OF DEFAULTS AND
CONFLICTS. This Agreement, the Management Agreement and the
Sub-Advisory Agreement have each been duly authorized,
executed and delivered by each respective Adviser, and the
Management Agreement and the Sub-Advisory Agreement each
constitute a valid and binding obligation of each
respective Adviser, enforceable in accordance with its
terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether
considered in a proceeding in equity or at law); and
neither the execution and delivery of this Agreement, the
Management Agreement or the Sub-Advisory Agreement nor the
performance by either of the Advisers of its obligations
hereunder or thereunder will conflict with, or result in a
breach of any of the terms and provisions of, or
constitute, with or without the giving of notice or lapse
of time or both, a default under, any agreement or
instrument to which either Adviser is a party or by which
it is bound, the certificate of incorporation, the by-laws
or other organizational documents of each of the Advisers,
or to each Adviser's knowledge, by any law, order, decree,
rule or regulation applicable to it of any jurisdiction,
court, federal or state regulatory body, administrative
agency or other governmental body, stock exchange or
securities association having jurisdiction over the
Advisers or their respective properties or operations; and
no consent, approval, authorization or order of any court
or governmental authority or agency is required for the
consummation by the Advisers of the transactions
contemplated by this Agreement, the Management Agreement or
the Sub-Advisory Agreement, except as have been obtained or
may be required under the 1933 Act, the 1940 Act, the 1934
Act or state securities laws.
(vi) NO MATERIAL ADVERSE CHANGE. Since the respective dates as
of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein,
there has not occurred any event which should reasonably be
expected to have a material adverse effect on the ability
of either Adviser to perform its respective obligations
under this Agreement and the respective Management
Agreement and Sub-Advisory Agreement to which it is a
party.
(vii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by
any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Advisers,
threatened against or affecting either of the Advisers or
any "affiliated person" of either of the Advisers (as such
term is defined in the ▇▇▇▇ ▇▇▇) or any partners,
directors, officers or employees of the foregoing, whether
or not arising in the ordinary course of business, which
might reasonably be expected to result in any material
adverse change in the condition, financial or otherwise, or
earnings, business affairs or business prospects of either
of the Advisers, materially and adversely affect the
properties or assets of either of the Advisers or
materially impair or adversely affect the ability of either
of the Advisers to function as an investment adviser or
perform its obligations under the Management Agreement
8
or the Sub-Advisory Agreement, or which is required to be
disclosed in the Registration Statement and the Prospectus.
(viii) ABSENCE OF VIOLATION OR DEFAULT. Each Adviser is not in
violation of its certificate of incorporation, by-laws or
other organizational documents or in default under any
agreement, indenture or instrument except for such
violations or defaults that would not result in a Material
Adverse Effect on the respective Adviser or the Trust.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Trust or the Advisers delivered to the Representative or to
counsel for the Underwriters shall be deemed a representation and
warranty by the Trust or the Advisers, as the case may be, to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Trust agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at
the price per share set forth in SCHEDULE B, the number of Initial
Securities set forth in SCHEDULE A opposite the name of such
Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to the
terms and conditions herein set forth, the Trust hereby grants an
option to the Underwriters, severally and not jointly, to purchase
up to an additional [ ] Common Shares in the aggregate at the
price per share set forth in SCHEDULE B, less an amount per share
equal to any dividends or distributions declared by the Trust and
payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 45 days after
the date hereof and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may
be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representative to the Trust
setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be
determined by the Representative, but shall not be later than
seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not
jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial
Securities set forth in SCHEDULE A opposite the name of such
Underwriter bears to the total number of Initial Securities,
subject in each case to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its
discretion shall make to eliminate any sales or purchases of a
fractional number of Option Securities.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the
offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall
be agreed upon by the Representative and the Trust, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days
after such date as shall be agreed
9
upon by the Representative and the Trust (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Trust, on each Date of Delivery as specified in the notice from the
Representative to the Trust.
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such
denominations and registered in such names as the Representative
may request in writing at least one full business day before the
Closing Time or the relevant Date of Delivery, as the case may be.
The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and
packaging by the Representative in the City of New York not later
than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants.
(a) The Trust and the Advisers, jointly and severally, covenant with
each Underwriter as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Trust, subject to Section 3(a)(ii), will
comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Representative immediately,
and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus
or any amended Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceedings for any
of such purposes. The Trust will promptly effect the
filings necessary pursuant to Rule 497 and will take such
steps as it deems necessary to ascertain promptly whether
the form of prospectus transmitted for filing under Rule
497 was received for filing by the Commission and, in the
event that it was not, it will promptly file such
prospectus. The Trust will make every reasonable effort to
prevent the issuance of any stop order, or
10
order of suspension or revocation of registration pursuant
to Section 8(e) of the 1940 Act, and, if any such stop
order or order of suspension or revocation of registration
is issued, to obtain the lifting thereof at the earliest
possible moment.
(ii) FILING OF AMENDMENTS. The Trust will give the
Representative notice of its intention to file or prepare
any amendment to the Registration Statement (including any
filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective
or to the Prospectus, will furnish the Representative with
copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be,
and will not file or use any such document to which the
Representative or counsel for the Underwriters shall
object.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Trust has
furnished or will deliver to the Representative and counsel
for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver
to the Representative, without charge, a conformed copy of
the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and
each amendment thereto furnished to the Underwriters will
be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(iv) DELIVERY OF PROSPECTUSES. The Trust has delivered to each
Underwriter, without charge, as many copies of each
preliminary prospectus as such Underwriter reasonably
requested, and the Trust hereby consents to the use of such
copies for purposes permitted by the 1933 Act. The Trust
will furnish to each Underwriter, without charge, during
the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies
of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(v) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time
when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the
Underwriters or for the Trust, to amend the Registration
Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact
necessary in order to make the statements therein not
misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement
the Prospectus in order to comply with the requirements of
the 1933 Act or the Rules and Regulations, the Trust will
promptly prepare and file with the Commission, subject to
Section 3(a)(ii), such amendment or supplement as may be
necessary to correct such statement or omission or to make
the Registration Statement or
11
the Prospectus comply with such requirements, and the Trust
will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may
reasonably request.
(vi) BLUE SKY QUALIFICATIONS. The Trust will use its best
efforts, in cooperation with the Underwriters, to qualify
the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of
the United States as the Representative may designate and
to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date
of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Trust
shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which
the Securities have been so qualified, the Trust will file
such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(vii) RULE 158. The Trust will timely file such reports
pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as
practicable an earnings statement for the purposes of, and
to provide the benefits contemplated by, the last paragraph
of Section 11(a) of the 1933 Act.
(viii) USE OF PROCEEDS. The Trust will use the net proceeds
received by it from the sale of the Securities in the
manner specified in the Prospectus under "Use of Proceeds".
(ix) LISTING. The Trust will use its reasonable best efforts
to effect the listing of the Securities on the NYSE,
subject to notice of issuance, concurrently with the
effectiveness of the Registration Statement.
(x) RESTRICTION ON SALE OF SECURITIES. During a period of 180
days from the date of the Prospectus, the Trust will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (A)
directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of
Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or file any
registration statement under the 1933 Act with respect to
any of the foregoing or (B) enter into any swap or any
other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any
such swap or transaction described in clause (A) or (B)
above is to be settled by delivery of Common Shares or such
other securities, in cash or otherwise. The foregoing
sentence shall not apply to (1) the Securities to be sold
hereunder or (2) Common Shares issued pursuant to any
dividend reinvestment plan.
(xi) REPORTING REQUIREMENTS. The Trust, during the period when
the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, will file all documents required to be
filed with the Commission pursuant to the 1940 Act and the
1934 Act within the time periods required by the 1940 Act
and the Rules
12
and Regulations and the 1934 Act and the rules and
regulations of the Commission thereunder, respectively.
(xii) SUBCHAPTER M. The Trust will comply with the requirements
of Subchapter M of the Code to qualify as a regulated
investment company under the Code.
(xiii) NO MANIPULATION OF MARKET FOR SECURITIES. The Trust will
not (a) take, directly or indirectly, any action designed
to cause or to result in, or that might reasonably be
expected to constitute, the stabilization or manipulation
of the price of any security of the Trust to facilitate the
sale or resale of the Securities, and (b) until the Closing
Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Securities or pay any person any compensation
for soliciting purchases of the Securities or (ii) pay or
agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Trust .
(xiv) RULE 462(B) REGISTRATION STATEMENT. If the Trust elects
to rely upon Rule 462(b), the Trust shall file a Rule
462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Trust shall at
the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the 1933 Act.
SECTION 4. Payment of Expenses.
(a) EXPENSES. The Trust will pay all expenses incident to the
performance of its obligations under this Agreement, including (i)
the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed
and of each amendment thereto, (ii) the preparation, printing and
delivery to the Underwriters of this Agreement, any Agreement
among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to
the Underwriters, (iv) the fees and disbursements of the Trust's
counsel, accountants and other advisors, (v) the qualification of
the Securities under securities laws in accordance with the
provisions of Section 3(a)(vi) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto,
(vi) the printing and delivery to the Underwriters of copies of
each preliminary prospectus, Prospectus and any amendments or
supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel
to the Underwriters in connection with, the review by the NASD of
the terms of the sale of the Securities, (x) the fees and expenses
incurred in connection with the listing of the Securities on the
NYSE and (xi) the printing of any sales material. Also, the Trust
has agreed to pay the Underwriters one-half of one cent per Common
Share as partial reimbursement of expenses incurred in connection
with the offering. BAI has agreed to pay organizational expenses
and offering costs (other than sales load) of the Trust that
exceed $.03 per Common Share.
13
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or
Section 9(a) hereof, the Trust and the Advisers, jointly and
severally, agree that they shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Trust and the Advisers
contained in Section 1 hereof or in certificates of any officer of the Trust or
the Advisers delivered pursuant to the provisions hereof, to the performance by
the Trust and the Advisers of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has
become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act, no notice or order pursuant to Section 8(e) of
the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or threatened by the
Commission, and any request on the part of the Commission for
additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 497 (or a
post-effective amendment providing such information shall have
been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Trust has elected to rely
upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 497.
(b) OPINION OF COUNSEL FOR TRUST AND THE ADVISERS. At Closing Time,
the Representative shall have received the favorable opinions,
dated as of Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Trust, and ▇▇▇ ▇▇▇▇▇▇▇▇, counsel for the
Advisers, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such
letters for each of the other Underwriters substantially to the
effect set forth in EXHIBIT A hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representative shall have received the favorable opinion, dated as
of Closing Time, of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel
for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters with respect to the
matters set forth in clauses (A) (i), (ii), (vi), (vii) (solely as
to preemptive or other similar rights arising by operation of law
or under the charter or by-laws of the Trust), (viii) through (x),
inclusive, (xii), (xiv) (solely as to the information in the
Prospectus under "Description of Shares") and the last paragraph
of EXHIBIT A hereto. In giving such opinion such counsel may rely,
as to all matters governed by the laws of jurisdictions other than
the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the
Representative. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the Trust and
certificates of public officials.
(d) OFFICERS' CERTIFICATES. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the
earnings,
14
business affairs or business prospects of the Trust, whether or
not arising in the ordinary course of business, and the
Representative shall have received a certificate of a duly
authorized officer of the Trust and of the chief financial or
chief accounting officer of the Trust and of the President or a
Vice President or Managing Director of each of the Advisers, dated
as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties
in Sections 1(a) and (b) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing
Time, (iii) each of the Trust and the Advisers, respectively, has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the
Registration Statement, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, has been
issued and no proceedings for any such purpose have been
instituted or are pending or are contemplated by the Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representative shall have received from Deloitte &
Touche LLP a letter dated such date, in form and substance
satisfactory to the Representative, together with signed or
reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and
the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representative
shall have received from Deloitte & Touche LLP a letter, dated as
of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(g) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official
notice of issuance.
(h) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof
to purchase all or any portion of the Option Securities, the
representations and warranties of the Trust contained herein and
the statements in any certificates furnished by the Trust
hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representative shall
have received:
(i) OFFICERS' CERTIFICATES. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Trust and of
the chief financial or chief accounting officer of the
Trust and of the President or a Vice President or Managing
Director of each of the Advisers confirming that the
information contained in the certificate delivered by each
of them at the Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
(ii) OPINIONS OF COUNSEL FOR THE TRUST AND THE ADVISERS. The
favorable opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Trust, and ▇▇▇ ▇▇▇▇▇▇▇▇, counsel for
the Advisers, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating
to the Option
15
Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(iii) OPINION OF COUNSEL FOR THE UNDERWRITERS. The favorable
opinion of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for
the Underwriters, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) BRING-DOWN COMFORT LETTER. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the
Representative and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the Representative pursuant to Section 5(f)
hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(j) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Trust and the Advisers in connection with
the organization and registration of the Trust under the 1940 Act
and the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Representative
and counsel for the Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is
after the Closing Time, the obligations of the several
Underwriters to purchase the relevant Option Securities, may be
terminated by the Representative by notice to the Trust at any
time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 13 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Trust and the Advisers,
jointly and severally, agree to indemnify and hold harmless each
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, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule
434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission
therefrom of a material
16
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission;
provided that (subject to Section 6(e) below) any such
settlement is effected with the written consent of the
Trust; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Trust or the
Advisers by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF TRUST, ADVISERS, TRUSTEES, DIRECTORS AND
OFFICERS. Each Underwriter severally agrees to indemnify and hold
harmless the Trust and the Advisers, their respective trustees and
directors, each of the Trust's officers who signed the
Registration Statement, and each person, if any, who controls the
Trust or the Advisers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written
information furnished to the Trust or the Advisers by such
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) INDEMNIFICATION FOR MARKETING MATERIALS. In addition to the
foregoing indemnification, the Trust and the Advisers also,
jointly and severally, agree to indemnify and hold harmless each
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, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 6(a),
as limited by the proviso set forth therein, with respect to any
sales material.
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect
of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event
17
shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 6(a) above, counsel to
the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and,
in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Trust
and the Advisers. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition
to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel,
such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Trust and the Advisers on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Trust and the Advisers on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Trust and the Advisers on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Trust and the total underwriting discount received by the Underwriters
(whether from the Trust or otherwise), in each case as
18
set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Trust and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Trust or the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Trust, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Trust and each director of the Advisers, respectively, each
officer of the Trust who signed the Registration Statement, and each person, if
any, who controls the Trust or the Advisers, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Trust and the Advisers, respectively. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in SCHEDULE A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Trust or the Advisers submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Trust or the Advisers, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The Representative may terminate this
Agreement, by notice to the Trust, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Trust or
the Advisers, whether or not arising in the ordinary course of
business, or (ii) if there has
19
occurred any material adverse change in the financial markets in
the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change
in national or international political, financial or economic
conditions, in each case the effect of which is such as to make
it, in the judgment of the Representative, impracticable to market
the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in the Common Shares of the Trust
has been suspended or materially limited by the Commission or the
NYSE, or if trading generally on the American Stock Exchange or
the NYSE or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv)
if a banking moratorium has been declared by either Federal or New
York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party
to any other party except as provided in Section 4 hereof, and
provided further that Sections 1, 6, 7, 8 and 13 shall survive
such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Representative
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters,
or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the
Trust to sell the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Trust to sell the relevant Option Securities,
as the case may be, either the Representative or the Trust shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
20
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representative, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of Equity Capital Markets; and notices to the
Trust or the Advisers shall be directed, as appropriate, to the office of
BlackRock Financial Management, Inc. at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Trust, the Advisers and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Trust, the Advisers and their respective successors and the
controlling persons and officers, trustees and directors referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Trust, the
Advisers and their respective partners and successors, and said controlling
persons and officers, trustees and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Trust and the Advisers in accordance with its terms.
Very truly yours,
BlackRock Strategic High Yield Trust
By:
-------------------------------------
Name:
Title:
BlackRock Advisors, Inc.
By:
-------------------------------------
Name:
Title:
BlackRock Financial Management, Inc.
By:
-------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
----------------------------------
Authorized Signatory
For itself and as
Representative of the
other Underwriters named
in SCHEDULE A hereto.
22
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Sch A-1
SCHEDULE B
BLACKROCK STRATEGIC HIGH YIELD TRUST
[ ] Common Shares of Beneficial Interest
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial public
offering price set forth above less $[ ] per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Trust and
payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A
FORM OF OPINION OF TRUST'S AND ADVISERS'
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(A) With respect to the Trust:
(i) The Trust has been duly organized and is validly existing
as a business trust in good standing under the laws of the State of
Delaware.
(ii) The Trust has business trust power and authority to own,
lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into
and perform its obligations under the Purchase Agreement.
(iii) The Trust is duly qualified as a foreign business trust
to transact business and is in good standing in each other
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) To the best of our knowledge, the Trust does not have
any subsidiaries.
(v) The authorized, issued and outstanding shares of
beneficial interest of the Trust is as set forth in the
Prospectus under the caption "Description of Shares --
Common Shares" (except for subsequent issuances, if any,
pursuant to the Purchase Agreement); all issued and
outstanding shares of beneficial interest of the Trust have
been duly authorized and validly issued and are fully paid
and non-assessable, except as provided for in the Trust's
declaration of trust, and have been offered and sold or
exchanged by the Trust in compliance with all applicable
laws (including, without limitation, federal and state
securities laws); the Common Shares conform as to legal
matters to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set
forth in the instruments defining the same; and none of the
outstanding shares of beneficial interest of the Trust was
issued in violation of the preemptive or other similar
rights of any securityholder of the Trust.
(vi) The Securities to be purchased by the Underwriters from
the Trust have been duly authorized for issuance and sale
to the Underwriters pursuant to the Purchase Agreement and,
when issued and delivered by the Trust pursuant to the
Purchase Agreement against payment of the consideration set
forth in the Purchase Agreement, will be validly issued and
fully paid and non-assessable, except as provided for in
the Trust's declaration of trust, and no holder of the
Securities is or will be subject to personal liability by
reason of being such a holder.
(vii) The issuance of the Securities is not subject to
preemptive or other similar rights of any securityholder of
the Trust.
(viii) The Purchase Agreement has been duly authorized,
executed and delivered by the Trust.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under
the 1933 Act; any required filing of the Prospectus
pursuant to Rule 497(c) or Rule 497(h) has been made in the
manner and within the time period required by Rule 497;
and, to the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the
1933 Act, and, to the best of our knowledge, no order of
suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act has been issued, and no
proceedings for any such purpose have been instituted or
are pending or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the
Rule 434 Information, as applicable, the Prospectus and
each amendment or supplement to the Registration Statement
and Prospectus as of their respective effective or issue
dates (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to
which we need express no opinion), and the notification on
Form N-8A complied as to form in all material respects with
the requirements of the 1933 Act, the 1940 Act and the
Rules and Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434,
from the prospectus included in the Registration Statement
at the time it became effective.
(xii) The form of certificate used to evidence the Common
Shares complies in all material respects with all
applicable statutory requirements, with any applicable
requirements of the declaration of trust and by-laws of the
Trust and the requirements of the New York Stock Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Trust is a party, or to which
the property of the Trust is subject, before or brought by
any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties
or assets of the Trust or the consummation of the
transactions contemplated in the Purchase Agreement or the
performance by the Trust of its obligations thereunder.
(xiv) The information in the Prospectus under "Description of
Shares" and "Tax Matters" and in the Registration Statement
under Item 29 (Indemnification), to the extent that it
constitutes matters of law, summaries of legal matters, the
Trust's declaration of trust and by-laws or
2
legal proceedings, or legal conclusions, has been reviewed
by us and is correct in all material respects.
(xv) Each of the Management Agreement, the Sub-Advisory
Agreement, the Custodian Agreement, the Transfer Agency
Agreement and the Purchase Agreement comply in all material
respects with all applicable provisions of the 1940 Act,
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 as a closed-end diversified management
investment company; and, to the best of our knowledge, no
order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or threatened
by the Commission.
(xvii) To the best of our knowledge, no person is serving as an
officer, trustee or investment adviser of the Trust except
in accordance with the 1940 Act and the Rules and
Regulations and the Investment Advisers Act and the
Advisers Act Rules and Regulations. Except as disclosed in
the Registration Statement and Prospectus (or any amendment
or supplement to either of them), to the best of our
knowledge, no trustee of the Trust is an "interested
person" (as defined in the ▇▇▇▇ ▇▇▇) of the Trust or an
"affiliated person" (as defined in the ▇▇▇▇ ▇▇▇) of an
Underwriter.
(xviii) There are no statutes or regulations that are required
to be described in the Prospectus that are not described as
required.
(xix) All descriptions in the Registration Statement of
contracts and other documents to which the Trust is a party
are accurate in all material respects. To the best of our
knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in
all material respects.
(xx) To the best of our knowledge, the Trust is not in
violation of its declaration of trust or by-laws and no
default by the Trust exists in the due performance or
observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration
Statement.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of,
any court or governmental authority or agency (other than
under the 1933 Act, the 1934 Act, the 1940 Act and the
Rules and Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of the
various states, as to which we need express no opinion) is
necessary or required
3
in connection with the due authorization, execution and
delivery of the Purchase Agreement or for the offering,
issuance or sale of the Securities or the consummation of
the transactions contemplated by this Agreement.
(xxii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and in the
Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Trust with
its obligations under the Purchase Agreement do not and
will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section
1(a)(xii) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust pursuant to any
contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Trust is a party or
by which it or any of them may be bound, or to which any of
the property or assets of the Trust is subject, nor will
such action result in any violation of the provisions of
the charter or by-laws of the Trust, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the
Trust or any of its properties, assets or operations.
(xxiii) The Purchase Agreement, the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement and the
Transfer Agency Agreement have each been duly authorized by
all requisite action on the part of the Trust, executed and
delivered by the Trust, as of the dates noted therein.
Assuming due authorization, execution and delivery by the
other parties thereto with respect to the Custodian
Agreement and the Transfer Agency Agreement, each of the
Management Agreement, the Sub-Advisory Agreement, the
Custodian Agreement and the Transfer Agency Agreement
constitutes a valid and binding agreement of the Trust,
enforceable in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing.
(B) With respect to the Advisers:
(xxiv) Each Adviser has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
(xxv) Each Adviser has full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into
and perform its obligations under the Purchase Agreement.
4
(xxvi) Each Adviser is duly qualified as a foreign corporation
to transact business and is in good standing in each other
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so
qualify would not result in a Material Adverse Effect.
(xxvii) Each Adviser is duly registered with the Commission as
an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and
Regulations, the 1940 Act or the Rules and Regulations from
acting under the Management Agreement for the Trust as
contemplated by the Prospectus.
(xxviii) The Purchase Agreement, the Management Agreement and the
Sub-Advisory Agreement have been duly authorized, executed
and delivered by the respective Adviser, and the Management
Agreement and the Sub-Advisory Agreement each constitutes a
valid and binding obligation of the respective Adviser,
enforceable in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in
equity or at law).
(xxix) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Advisers are a party, or to
which the property of the Advisers is subject, before or
brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to
result in any material adverse change in the condition,
financial or otherwise, in the earnings, business affairs
or business prospects of the Advisers, materially and
adversely affect the properties or assets of the Advisers
or materially impair or adversely affect the ability of the
Advisers to function as an investment adviser or perform
its obligations under the Management Agreement or the
Sub-Advisory Agreement, or which is required to be
disclosed in the Registration Statement or the Prospectus.
(xxx) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits
thereto, and the descriptions thereof or references thereto
are correct in all material respects.
(xxxi) To the best of our knowledge, each Adviser is not in
violation of its certificate of incorporation, by-laws or
other organizational documents and no default by the
Advisers exists in the due performance or observance of any
material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument
that is described or referred to in the Registration
Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
5
(xxxii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or
foreign (other than under the 1933 Act, the 1940 Act and
the Rules and Regulations, which have been obtained, or as
may be required under the securities or blue sky laws of
the various states, as to which we need express no opinion)
is necessary or required in connection with the due
authorization, execution and delivery of the Purchase
Agreement.
(xxxiii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and in the
Registration Statement and compliance by the Advisers with
their obligations under the Purchase Agreement do not and
will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section
1(a)(xii) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Advisers pursuant to any
contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Advisers is a party
or by which it or any of them may be bound, or to which any
of the property or assets of the Advisers is subject
(except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of
the Advisers, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us,
of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Advisers
or any of its properties, assets or operations.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Trust, representatives of Deloitte &
Touche LLP, the independent accountants who examined the statement of assets and
liabilities of the Trust included or incorporated by reference in the
Registration Statement and the Prospectus, and you and your representatives and
we have reviewed certain Trust records and documents. While we have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the information
contained in the Registration Statement and the Prospectus, except to the extent
necessary to enable us to give the opinions with respect to the Trust in
paragraphs (A)(v), (xiv) and (xix), on the basis of such participation and
review, nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time such Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements, supporting schedules and
other financial data included therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other
6
financial data, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
7