STRUCTURING FEE AGREEMENT
Exhibit 99.(h)(3)
STRUCTURING
FEE AGREEMENT (the “Agreement”), dated as of August [•], 2010 between Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and BlackRock Advisors, LLC (“BlackRock
Advisors”).
WHEREAS, BlackRock Build America Bond Trust (the “Fund”) is a newly-organized,
non-diversified, closed-end management investment company registered under the Investment Company
Act of 1940, as amended (the “1940 Act”), and certain
shares of its common shares of beneficial interest, par value $0.001
per share (the “Common Stock”), are registered under the Securities Act of 1933, as amended;
WHEREAS, BlackRock Advisors is the investment adviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as an underwriter in an offering of the Fund’s Common Stock;
and
WHEREAS, BlackRock Advisors desires to provide additional compensation to Xxxxxxx Xxxxx for
providing the advice and services described below;
NOW, THEREFORE, in consideration of the mutual terms and conditions set forth below, the
parties hereto agree as follows:
| 1. | In consideration of Xxxxxxx Xxxxx’x providing advice relating to the structure and design and the organization of the Fund as well as services related to the sale and distribution of the Fund’s Common Stock, BlackRock Advisors shall pay Xxxxxxx Xxxxx a fee in the aggregate amount of $[•], which is equal to [•]% of the total price to the public of the Fund’s Common Stock sold by Xxxxxxx Xxxxx pursuant to the prospectus dated August [•], 2010 (the “Prospectus”) (the “Fee”). The Fee shall be paid within 30 days of the Closing Date (as defined in the Underwriting Agreement, dated August [•], 2010, by and among the Fund, BlackRock Advisors, BlackRock Investment Management, LLC (“Black Rock IM”) and each of the Underwriters named therein (the “Underwriting Agreement”)).The fee hereunder shall not exceed [•]% of the total price to the public of the Fund’s Common Stock issued by the Fund pursuant to the Prospectus. The sum total of this Fee, plus the structuring fees and sales incentive fee paid to certain other underwriters in connection with this offering, plus the underwriters’ counsel fees paid by the Fund and commissions paid to certain registered personnel of its broker-dealer affiliates shall not exceed 9.0% of the total price of the Fund’s Common Stock sold by the Fund pursuant to the Prospectus. | |
| 2. | BlackRock Advisors acknowledges that Xxxxxxx Xxxxx did not provide and is not providing any advice hereunder as to the value of securities or regarding the advisability of purchasing or selling any securities for the Fund’s portfolio. No provision of this Agreement shall be considered as creating, nor shall any provision create, any obligation on the part of Xxxxxxx Xxxxx, and Xxxxxxx Xxxxx is not hereby agreeing, to: (i) furnish any advice or make any recommendations regarding the purchase or sale of portfolio securities or (ii) render any opinions, valuations or recommendations of any kind or to |
| perform any such similar services in connection with the transactions contemplated herein. | ||
| 3. | Nothing herein shall be construed as prohibiting Xxxxxxx Xxxxx or its affiliates from providing similar or other services to any other clients (including other registered investment companies or other investment advisers). | |
| 4. | This Agreement shall terminate upon the payment of the entire amount of the Fee, as specified in Section 1 hereof or upon the termination of the Underwriting Agreement without common shares having been delivered and paid for. | |
| 5. | BlackRock Advisors has furnished Xxxxxxx Xxxxx with such information as Xxxxxxx Xxxxx believes appropriate to its assignment hereunder (all such information so furnished being the “Information”). BlackRock Advisors recognizes and confirms that Xxxxxxx Xxxxx (a) has used and relied primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same and (b) does not assume responsibility for the accuracy or completeness of the Information and such other information. To the best of BlackRock Advisors’ knowledge, the Information furnished by BlackRock Advisors, when delivered, was true and correct in all material respects and did not contain any material misstatement of fact or omit to state any material fact necessary to make the statements contained therein not misleading. BlackRock Advisors will promptly notify Xxxxxxx Xxxxx if it learns of any material inaccuracy or misstatement in, or material omission from, any Information delivered to Xxxxxxx Xxxxx. Xxxxxxx Xxxxx agrees to keep such Information confidential to the extent permitted by law. | |
| 6. | BlackRock Advisors agrees that Xxxxxxx Xxxxx shall have no liability to BlackRock Advisors, BlackRock IM or the Fund for any act or omission to act by Xxxxxxx Xxxxx in the course of its performance under this Agreement, in the absence of bad faith, gross negligence or willful misconduct on the part of Xxxxxxx Xxxxx. BlackRock Advisors agrees to the terms set forth in the Indemnification Agreement attached hereto, the provisions of which are incorporated herein by reference and shall survive the termination, expiration or supersession of this Agreement. | |
| 7. | This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement (“Claim”) shall be governed by and construed in accordance with the laws of the State of New York. | |
| 8. | No Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have exclusive jurisdiction over the adjudication of such matters, and BlackRock Advisors and Xxxxxxx Xxxxx consent to the jurisdiction of such courts and personal service with respect thereto. Each of Xxxxxxx Xxxxx and BlackRock Advisors waives all right to trial by jury in any proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. BlackRock Advisors and Xxxxxxx Xxxxx agree that a final judgment in any proceeding or counterclaim brought in any such court shall be conclusive and binding upon BlackRock Advisors and Xxxxxxx Xxxxx and may be |
| enforced in any other courts to the jurisdiction of which BlackRock Advisors and Xxxxxxx Xxxxx are or may be subject, by suit upon such judgment. | ||
| 9. | This Agreement may not be assigned by either party without the prior written consent of the other party. | |
| 10. | This Agreement (including the attached Indemnification Agreement) embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Xxxxxxx Xxxxx and BlackRock Advisors. | |
| 11. | All notices required or permitted to be sent under this Agreement shall be sent, if to BlackRock Advisors: | |
| BlackRock Advisers, LLC 000 Xxxxxxxx Xxxxxxx Xxxxxxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxxxxx, Esq. |
||
| or if to Xxxxxxx Xxxxx: | ||
| Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx | ||
| Incorporated | ||
| 0 Xxxxx Xxxxxxxxx Xxxxxx | ||
| Xxx Xxxx, Xxx Xxxx 00000 | ||
| Attention: Xxxxxxx Xxxxxxxxxx, Director, Closed-End Funds | ||
| or such other name or address as may be given in writing to the other parties. Any notice shall be deemed to be given or received on the third day after deposit in the U.S. mail with certified postage prepaid or when actually received, whether by hand, express delivery service or facsimile transmission, whichever is earlier. | ||
| 12. | This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. |
IN WITNESS WHEREOF, the parties hereto have duly executed this Structuring Fee Agreement as of
the date first above written.
| BLACKROCK ADVISORS, LLC | XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX | |||||||||
| INCORPORATED | ||||||||||
By:
|
By: | |||||||||
| Title: Managing Director | Title: | |||||||||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Indemnification Agreement
Indemnification Agreement
August [•], 2010
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated (“Xxxxxxx Xxxxx”) to advise and assist the undersigned, BlackRock Advisors, LLC,
(together with its affiliates and subsidiaries, referred to as the “Company”) with respect to the
matters set forth in the Structuring Fee Agreement dated August [•], 2010 between the Company and Xxxxxxx
Xxxxx (the “Agreement”), in the event that Xxxxxxx Xxxxx becomes involved in any capacity in any
claim, suit, action, proceeding, investigation or inquiry (including, without limitation, any
shareholder or derivative action or arbitration proceeding) (collectively, a “Proceeding”) with
respect to services performed pursuant to and in accordance with the Agreement, the Company agrees
to indemnify, defend and hold Xxxxxxx Xxxxx harmless to the fullest extent permitted by law, from
and against any losses, claims, damages, liabilities and expenses with respect to services
performed pursuant to and in accordance with the Agreement, except to the extent that it shall be
determined by a court of competent jurisdiction in a judgment that has become final in that it is
no longer subject to appeal or other review, that such losses, claims, damages, liabilities and
expenses resulted solely from bad faith, gross negligence or willful misconduct of Xxxxxxx Xxxxx. In
addition, in the event that Xxxxxxx Xxxxx becomes involved in any capacity in any Proceeding with
respect to the services performed pursuant to and in accordance with the Agreement, the Company
will reimburse Xxxxxxx Xxxxx for its reasonable legal and other expenses (including the cost of any
investigation and preparation) as such expenses are actually incurred
and accounted for by Xxxxxxx Xxxxx in connection
therewith, except to the extent that it shall be determined by a court
of competent jurisdiction in a judgment that has become final in that
it is no longer subject to appeal or other review, that such legal
and other expenses resulted from the bad faith, gross negligence or
willful conduct of Xxxxxxx Xxxxx or Xxxxxxx Xxxxx is otherwise
entitled to indemnification hereunder. The indemnification provided
hereunder shall not extend to these matters indemnified under the
Underwriting Agreement, dated August [•], 2010,
by and among BlackRock Build America Bond Trust (the
“Fund”), BlackRock Advisors, LLC, BlackRock Investment
Management, LLC and each of the underwriters named therein. Promptly as reasonably practicable after receipt by Xxxxxxx Xxxxx of notice of the
commencement of any Proceeding, Xxxxxxx Xxxxx will, if a claim in respect thereof is to be made
under this paragraph, notify the Company in writing of the commencement thereof; but the failure to
so notify the Company (i) will not relieve the Company from liability under this paragraph to the
extent it is not materially prejudiced as a result thereof and (ii) in any event shall not relieve
the Company from any liability which it may have otherwise than on account of this Indemnification
Agreement. Counsel to Xxxxxxx Xxxxx shall be selected by Xxxxxxx Xxxxx. 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 Xxxxxxx Xxxxx) also be counsel to
Xxxxxxx Xxxxx. No indemnifying party shall, without the prior written consent of Xxxxxxx Xxxxx,
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 hereunder
(whether or not Xxxxxxx Xxxxx is an actual or potential party thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx. If such indemnification were not to be available for any reason, the
Company agrees to contribute to the losses, claims, damages, liabilities and expenses involved (i)
in the proportion appropriate to reflect the relative benefits received or sought to be received by
the Company and its stockholders and affiliates and other constituencies, on the one hand, and
Xxxxxxx Xxxxx, on the other hand, in the matters contemplated by the Agreement or (ii) if (but only
if and to the extent) the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and its stockholders and
affiliates, on the one hand, and the party entitled to contribution, on the other hand, as well as
any other relevant equitable considerations. The Company agrees that for the purposes of this
paragraph the relative benefits received, or sought to be received, by the Company and its
stockholders and affiliates, on the one hand, and the party entitled to contribution, on the other
hand, of a transaction as contemplated shall be deemed to be in the same proportion that the total
value received or paid or contemplated to be received or paid by the Company or its stockholders or
affiliates, as the case may be, as a result of or in connection with the transaction (whether or
not consummated) for which Xxxxxxx Xxxxx has been retained to perform services bears to the fees
paid to Xxxxxxx Xxxxx under the Agreement; provided, that in no event shall the Company contribute
less than the amount necessary to assure that Xxxxxxx Xxxxx is not liable for losses, claims,
damages, liabilities and expenses in excess of the amount of fees actually received by Xxxxxxx
Xxxxx pursuant to the Agreement. Relative fault shall be determined by reference to, among other
things, whether any alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Company or other conduct by the Company (or its employees or other
agents), on the one hand, or by Xxxxxxx Xxxxx, on the other hand. Notwithstanding the provisions
of this paragraph, Xxxxxxx Xxxxx shall not be entitled to contribution from the Company if it is
determined that Xxxxxxx Xxxxx was guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act of 1933, as amended) and the Company was not guilty of such
fraudulent misrepresentation. The Company will not settle any Proceeding in respect of which
indemnity may be sought hereunder, whether or not Xxxxxxx Xxxxx is an actual or potential party to
such Proceeding, without Xxxxxxx Xxxxx’x prior written consent (which consent shall not be
unreasonably withheld). For purposes of this Indemnification Agreement, Xxxxxxx Xxxxx shall
include Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, any of its
affiliates, each other person, if any, controlling Xxxxxxx Xxxxx or any of its affiliates, their
respective officers, current and former directors, employees and agents, and the successors and
assigns of all of the foregoing persons. The foregoing indemnity and contribution agreement shall
be in addition to any rights that any indemnified party may have at common law or otherwise.
The Company agrees that neither Xxxxxxx Xxxxx nor any of its affiliates, directors, agents,
employees or controlling persons shall have any liability to the Company or any person asserting
claims on behalf of or in right of the Company with respect to the services performed pursuant to
and in accordance with the Agreement, except to the extent that it shall be determined by a court
of competent jurisdiction in a judgment that has become final in that it is no longer subject to
appeal or other review that any losses, claims, damages, liabilities or expenses incurred by the
Company resulted solely from the bad faith, gross negligence or willful misconduct of Xxxxxxx Xxxxx in
performing the services that are the subject of the Agreement.
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE WITH RESPECT TO THE
SERVICES PERFORMED PURSUANT TO AND IN ACCORDANCE WITH THIS AGREEMENT (“CLAIM”), DIRECTLY OR
INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. EXCEPT AS SET FORTH BELOW, NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT
OTHER THAN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICH COURTS SHALL HAVE
EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS, AND THE COMPANY AND XXXXXXX XXXXX
CONSENT TO THE JURISDICTION OF SUCH COURTS AND PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANY
HEREBY CONSENTS TO PERSONAL JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY CLAIM ARISING
OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY ANY THIRD PARTY AGAINST XXXXXXX XXXXX. EACH OF XXXXXXX XXXXX AND THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY PROCEEDING OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN
ANY WAY RELATING TO THIS AGREEMENT. EACH OF XXXXXXX XXXXX AND THE COMPANY AGREES THAT A FINAL
JUDGMENT IN ANY PROCEEDING OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT
IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON XXXXXXX XXXXX AND THE COMPANY, AS THE CASE
MAY BE, AND MAY BE ENFORCED IN ANY OTHER COURTS TO THE JURISDICTION OF WHICH XXXXXXX XXXXX AND THE
COMPANY, AS THE CASE MAY BE, IS OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
The foregoing Indemnification Agreement shall remain in full force and effect notwithstanding
any termination of Xxxxxxx Xxxxx’x engagement. This Indemnification Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
| Very truly yours, BLACKROCK ADVISORS, LLC |
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| By: | ||||
| Name: Xxxx Xxxxxxx | ||||
| Title: | ||||
|
Accepted and agreed to as of the date first written above: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED |
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| By: | ||||
| Name: | ||||
| Title: | ||||
