CCR&W DRAFT
12/10/01
BlackRock Municipal 2018 Term Trust
(a Delaware business trust)
Auction Market Preferred Shares ("AMPS") of Beneficial Interest
2,752 Shares __ AMPS, Series W7
2,752 Shares __ AMPS, Series R7
Liquidation Preference $25,000 per share
PURCHASE AGREEMENT
December [ ], 2001
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
c/x Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10080
Ladies and Gentlemen:
BlackRock Municipal 2018 Term Trust, a Delaware business trust (the
"Trust"), proposes, upon the terms and conditions set forth herein, to issue and
sell an aggregate of 2,752 shares of its Auction Market Preferred Shares of
Beneficial Interest, Series W7 and 2,752 shares of its Auction Market Preferred
Shares of Beneficial Interest, Series R7, each with a liquidation preference of
$25,000 per share (the "AMPS"). The AMPS will be authorized by, and subject to
the terms and conditions of, the Statement of Preferences of Auction Market
Preferred Shares of the Trust, dated as of December 13, 2001 (the "Statement")
and the Agreement and Declaration of Trust of the Trust, as amended and
restated, dated as of October 15, 2001 (the "Declaration"), in the forms filed
as exhibits to the Registration Statement referred to in the second following
paragraph of this Agreement, as the same may be amended from time to time. 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 Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and Xxxxxxx
Xxxxx Xxxxxx Inc. ("Salomon") 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 Xxxxxxx Xxxxx and Xxxxxxx are acting as representatives (in
such capacity, the "Representatives"), 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 AMPS set forth in said Schedule A.
The Trust understands that the Underwriters propose to make a public
offering of the AMPS as soon as the Representatives 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. 333-73154 and No.
811-10501) covering the registration of the AMPS 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 (the "1940 Act
Notification")
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 AMPS, 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 December [7], 2001 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 ("XXXXX").
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; and all reference in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such 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, and as of the Closing Time referred to in
Section 2(c) 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
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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, 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 amendments or
supplements thereto, at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time, 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 XXXXX, 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 AMPS, 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) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the Rules and Regulations and, when
read together with the other information in the Prospectus, at the date
the Registration Statement became effective, at the date the Prospectus
was issued and at the Closing Time, 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.
(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 (other than as
a result of changes in market conditions) (a "Material Adverse
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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 except for dividends declared on Common
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 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 1940
Act) of the Trust or an "affiliated person" (as defined in the 1940 Act)
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 "Capitalization."
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 SHARES. The AMPS 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 AMPS in all material respects conform
to all statements relating thereto contained in the Prospectus and such
description in all material respects conforms to the rights set forth in
the instruments defining the same; no holder of the AMPS will be subject
to personal liability by reason of being such a holder; and the issuance
of the AMPS 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
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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 not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Investment Management Agreement, the
Sub-Investment Advisory Agreement, the Custodian Agreement, the Transfer
Agent and Service Agreement and the Auction Agency Agreement referred to
in the Registration Statement (as used herein, the "Management
Agreement," the "Sub-Advisory Agreement", the "Custodian Agreement", the
"Transfer Agency Agreement" and the "Auction Agency Agreement"
respectively) and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and
sale of the AMPS and the use of the proceeds from the sale of the AMPS
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 (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
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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. The Trust does not own any Intellectual
Property concerning the name "Blackrock."
(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 AMPS 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 AMPS (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 in light of the circumstances under which they were
made, 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), and as of the date of this
Agreement qualifies as a regulated investment company under Subchapter M
of the Code.
(xx) DISTRIBUTION OF OFFERING MATERIALS. The Trust has not
distributed and, prior to the later to occur of (A) the Closing Time and
(B) completion of the distribution of the AMPS, will not distribute any
offering material in connection with the offering and sale of the AMPS
other than the Registration Statement, a preliminary prospectus, the
Prospectus or other materials, if any, permitted by the 1933 Act or the
1940 Act or the Rules and Regulations.
(xxi) ACCOUNTING CONTROLS. The Trust maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's
general or specific authorization and with the applicable requirements
of the 1940 Act, the Rules and Regulations and the Code; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally
6
accepted accounting principles and to maintain accountability for assets
and to maintain compliance with the books and records requirements under
the 1940 Act and the Rules and Regulations; (C) access to assets is
permitted only in accordance with the management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxii) ABSENCE OF UNDISCLOSED PAYMENTS. To The Trust's
knowledge, neither The Trust nor any employee or agent of The Trust has
made any payment of funds of The Trust or received or retained any
funds, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(xxiii) MATERIAL AGREEMENTS. This Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Custodian Agreement, the
Transfer Agency Agreement and the Auction 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, the Transfer Agency Agreement
and the Auction Agency Agreement, each of the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement, the Transfer Agency
Agreement and the Auction 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).
(xxiv) 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.
(xxv) NYSE LISTING. The Trust's common shares are duly listed
on the New York Stock Exchange ("NYSE").
(xxvi) RATINGS. The AMPS have been, or prior to the Closing
Date will be, assigned a rating of 'Aaa' by Xxxxx'x Investors Service,
Inc. ("Moody's") and "AAA" by Standard & Poor's Rating Services ("S&P").
(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 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
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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.
(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 Investment Management Agreement and the
Sub-Investment 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 Investment
Management Agreement and Sub-Investment 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 1940 Act) 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 or the Sub-Advisory Agreement, or which is required to be
disclosed in the Registration Statement and the Prospectus.
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(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 Representatives 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) SHARES. 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 Shares set forth in
SCHEDULE A opposite the name of such Underwriter, plus any additional number of
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) COMMISSION. The Trust agrees to pay to the Underwriters a
commission set forth in Schedule B as compensation to the Underwriters for their
performance under this Agreement.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the AMPS shall be made at the offices of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or through the
facilities of The Depository Trust Company ("DTC") or at such other place as
shall be agreed upon by the Representatives and the Trust, at 10:00 A.M.
(Eastern time) on the 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 upon by the Representatives
and the Trust (such time and date of payment and delivery being herein called
"Closing Time").
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 Representatives through DTC for the respective accounts of the Underwriters
of the AMPS to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the AMPS which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the AMPS to be purchased by any Underwriter whose funds have not been
received by the Closing Time but such payment shall not relieve such Underwriter
from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the AMPS shall be
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time. The
certificates for the AMPS will be made available for examination and packaging
by the Representatives in the City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
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, except as
otherwise stated in (C) below, for a period of three years from the date
9
hereof, the Trust (in the case of (A), (B), (C)(i) and (D) below) and
the Advisors (in the case of (C)(ii) below) will advise you promptly and
will confirm such advice in writing: (A) of any request made by the
Commission for amendment of or a supplement to the Registration
Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement to any of the foregoing) or for additional
information, (B) of the issuance by the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official of any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending
the use of the Prospectus or any preliminary prospectus, or any sales
material (as hereinafter defined), of any notice pursuant to Section
8(e) of the 1940 Act, of the suspension of qualification of the AMPS for
offering or sale in any jurisdiction, or the initiation of any
proceeding for any such purposes, (C) of receipt by (i) the Trust, any
affiliate of the Trust or any representative or attorney of the Trust of
any other material communication adverse to the Trust from the
Commission or (ii) the Trust, the Advisors, any affiliate of the Trust
or the Advisors or any representative or attorney of the Trust or the
Advisors of any other material communication adverse to the Trust from
the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or
any official relating to the Trust (if such communication relating to
the Trust is received by such person within three years after the date
of this Agreement), the Registration Statement, the 1940 Act
Notification, the Prospectus, any preliminary prospectus, any sales
material (or any amendment or supplement to any of the foregoing) or
this Agreement or any of the Trust Agreements and (D) within the period
of time referred to in paragraph (iv) below, of any material adverse
change in the condition (financial or other), general affairs, assets or
results of operations of the Trust or any event which should reasonably
be expected to have a material adverse effect on the ability of either
Advisor to perform its respective obligations under this Agreement and
the Advisory Agreements to which it is a party (in either case, other
than as a result of changes in market conditions generally or the market
for municipal securities generally) or of the happening of any other
event which makes any statement of a material fact made in the
Registration Statement or the Prospectus, or any preliminary prospectus
(or any amendment or supplement to any of the foregoing) untrue or which
requires the making of any additions to or changes in the Registration
Statement or the Prospectus, or any preliminary prospectus (or any
amendment or supplement to any of the foregoing) in order to state a
material fact required by the 1933 Act, the 1940 Act or the Rules and
Regulations to be stated therein or necessary in order to make the
statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, or of the
necessity to amend or supplement the Registration Statement, the
Prospectus, or any preliminary prospectus (or any amendment or
supplement to any of the foregoing) to comply with the 1933 Act, the
1940 Act, the Rules and Regulations or any other law or order of any
court or regulatory body. If at any time the Commission shall issue any
order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any sales
material (or any amendment or supplement to any of the foregoing) or
suspending the qualification of the AMPS for offering or sale in any
jurisdiction, the Trust and the Advisors will use their reasonable best
efforts to obtain the withdrawal of such order at the earliest possible
time. If at any time the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or
any official shall issue any order prohibiting or suspending the use of
the Prospectus or any sales material (or any amendment or supplement to
any of the foregoing) or suspending the qualification of the AMPS for
offering or sale in any jurisdiction, the Advisors will use their
reasonable best efforts to obtain the withdrawal of such order at the
earliest possible time. The Trust will notify the Representatives
immediately, and, if requested by the Representatives, confirm the
notice in writing, (i) when any post-effective amendment to the
Registration
10
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 AMPS 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 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
Representatives 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 Representatives 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 Representatives or counsel for the
Underwriters shall object.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Trust has
furnished or will deliver to the Representatives 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 Representatives, 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 XXXXX, 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 in the opinion of counsel for the Underwriter the
Prospectus is required under the 1933 Act to be delivered in connection
with sales by any Underwriter or dealer 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 XXXXX, 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 AMPS, 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
11
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 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 AMPS for
offering and sale under the applicable securities laws of such states
and other jurisdictions of the United States as the Representatives 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 AMPS 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 AMPS 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 AMPS in the manner specified in the
Prospectus under "Use of Proceeds".
(ix) 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 and Regulations and the
1934 Act and the rules and regulations of the Commission thereunder,
respectively.
(x) 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.
(xi) NO MANIPULATION OF MARKET FOR SHARES. 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 AMPS, and (b) until the Closing
Date, or the Date of Delivery, if any, (i) sell, bid for or purchase the
AMPS or pay any person any compensation for soliciting purchases of the
AMPS or (ii) pay or agree to pay to any person any compensation for
soliciting another to purchase any other Shares of the Trust.
(xii) 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 day following 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.
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(xiii) ACCOUNTANT'S CERTIFICATE. The Trust will furnish to the
Underwriters, on the date on which delivery is made to the Rating
Agencies, the report and the confirmation of the Independent Accountant
(as defined in the Statement) required to be delivered pursuant to
paragraph 7(f) of Part I of the Statement.
(b) Except as provided in this Agreement, the Trust will not sell,
contract to sell or otherwise dispose of any of its preferred shares of
beneficial interest of the same series as the AMPS or any securities convertible
into or exercisable or exchangeable for its preferred shares of beneficial
interest of the same series as the AMPS, or grant any options or warrants to
purchase its preferred shares of beneficial interest of the same series as the
AMPS, for a period of 180 days after the date of the Prospectus, without the
prior written consent of Xxxxxxx Xxxxx.
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 AMPS, (iii) the preparation, issuance and delivery of the certificates
for the AMPS 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
AMPS to the Underwriters, (iv) the fees and disbursements of the Trust's
counsel, accountants and other advisors, (v) the qualification of the AMPS 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 AMPS, (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 AMPS, (x) the fees and
expenses incurred in connection with the rating of the AMPS and (xi) the
printing of any sales material.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives 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 in all material respects 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
13
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 Representatives shall have received the favorable opinions, dated as of
Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Trust, and Xxxxxx X. Xxxxxxxx, 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 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
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance Xxxxxx & Xxxxx 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),
(iv), (v), (ix), (x) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Trust) inclusive, (xi)
(solely as to the information in the Prospectus under "Description of AMPS"),
(xiii) and the penultimate 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 Representatives. 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 or business affairs of the
Trust, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of a duly authorized officer
of the Trust and of the Treasurer 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 in all material respects 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 in all material respects with all
agreements and satisfied all conditions on its part to be performed or satisfied
in all material respects 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 Representatives shall have received from Deloitte & Touche
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, 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 Representatives
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.
14
(g) 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.
(h) RATING. The Trust shall have delivered and you shall have
received evidence satisfactory to you that the AMPS are rated 'Aaa' by Xxxxx'x
and 'AAA' by S&P as of the Closing Date, and there shall not have been given any
notice of any intended or potential downgrading, or of any review for a
potential downgrading, in the rating accorded to the AMPS or any other
securities issued by the Trust, by Xxxxx'x or by S&P.
(i) ASSET COVERAGE. As of the Closing Date and assuming the receipt
of the net proceeds from the sale of the AMPS, the Investment Company Act
Preferred Shares Asset Coverage and the Preferred Shares Basic Maintenance
Amount (each as defined in the Statement) each will be met.
(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 reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the AMPS 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 AMPS as herein contemplated shall be reasonably satisfactory in
form and substance to the Representatives 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 may be terminated by the Representatives by notice to the Trust at any
time at or prior to Closing Time, 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 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 reasonable fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating,
15
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 Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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 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 Xxxxxxx Xxxxx,
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
16
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.
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 AMPS
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 AMPS pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the AMPS 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 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 AMPS 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 AMPS 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 1933 Act) 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,
17
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 AMPS 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 AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The Representatives 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
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 Representatives, impracticable or inadvisable to market
the AMPS or to enforce contracts for the sale of the AMPS, 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 a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, 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 AMPS which it or they are obligated to purchase
under this Agreement (the "Defaulted Shares"), the Representatives 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 Shares in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Shares does not exceed 10% of the
number of Shares 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
18
(b) if the number of Defaulted Shares exceeds 10% of the number of
Shares to be purchased on such date, this Agreement 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, either the Representatives or the Trust shall have the right
to postpone Closing Time 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.
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
Representatives, c/x Xxxxxxx Xxxxx & Co., North Tower, World Financial Center,
New York, New York 10080, 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 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxxxxxxxxx.
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 Shares 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.
19
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 Municipal 2018 Term 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:
XXXXXXX XXXXX & CO.
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------
Authorized Signatory
For themselves and as
Representatives of the
other Underwriters named
in SCHEDULE A hereto.
20
SCHEDULE A
Number of
NAME OF UNDERWRITER Shares
------------------- ----------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated................ [ ]
Xxxxxxx Xxxxx Xxxxxx Inc.......................................... [ ]
UBS Warburg LLC................................................... [ ]
Prudential Securities Incorporated................................ [ ]
Total.................................................... [ ]
==========
Sch A-1
SCHEDULE B
BLACKROCK MUNICIPAL 2018 TERM TRUST
[ ] Auction Market Preferred Shares of Beneficial Interest
Series _____
Liquidation Preference $25,000 per share
1. The initial public offering price per share for the AMPS, determined
as provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $25,000.
3. The commission to be paid to the Underwriters for their performance
hereunder shall be $[ ] per share.
4. The initial dividend rate on the AMPS shall be ___% per annum.
Sch B-1
