MARKETING AND STRUCTURING FEE AGREEMENT
Exhibit 99.(h)(5)
MARKETING AND STRUCTURING
FEE AGREEMENT
FEE AGREEMENT
August [•], 2010
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This agreement is between BlackRock Advisors, LLC, a Delaware limited liability company (the
“Company”) and Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx Xxxxxxx”) with respect to
BlackRock Build America Bond Trust, a Delaware statutory trust (the “Fund”).
1. Fee. (a) In consideration of advice to the Company relating to, but not limited
to, the design and structuring of, and marketing assistance with respect to, the Fund and the
distribution of its common shares of beneficial interest, par value $0.001 per share (the “Shares”), the Company shall pay a fee to
Xxxxxx Xxxxxxx in the aggregate amount of $[•] (the “Fee”). Subject to paragraph (b), 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 for 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 Shares
sold by the Fund pursuant to the Prospectus.
(b) Notwithstanding paragraph (a), in the event that the Company (or the Fund or any person or
entity affiliated with the Company, the Fund or any subadviser to the Fund or acting on behalf of
or at the direction of any of the foregoing) compensates or agrees to compensate any other broker
or dealer participating in the Offering (each, an “Other Broker”) for any services or
otherwise in connection with the Offering or with respect to the Fund or its Shares (excluding for
this purpose any compensation paid directly to the entire underwriting syndicate, as a group,
pursuant to the principal underwriting agreement (the “Underwriting Agreement”) relating to
the Offering), whether such compensation be denominated as a fee, an expense reimbursement, a
set-off, a credit or otherwise (such compensation with respect to any Other Broker, such Other
Broker’s “Other Compensation”), then the amount of the Fee shall be increased as and to the
extent necessary so that the Fee payable to Xxxxxx Xxxxxxx hereunder, expressed as a percentage of
the aggregate price to the public of the Shares sold by Xxxxxx Xxxxxxx in the Offering (including
any Shares over-allotted by Xxxxxx Xxxxxxx in the Offering regardless of whether the over-allotment
option in the Offering is exercised), is no less than the Other Compensation, expressed as a
percentage of the aggregate price to the public of the Shares sold by such Other Broker in the
Offering. For purposes of this paragraph (b), the number of Shares sold by Xxxxxx Xxxxxxx shall be
deemed to include one half of the number of Shares sold by Xxxxxx Xxxxxxx Xxxxx Xxxxxx LLC, and
Citigroup Global Markets Inc. shall be deemed to have sold the other half.
(c) The Company shall pay the Fee to Xxxxxx Xxxxxxx on or before [•], 2010 by wire transfer to
the order of Xxxxxx Xxxxxxx. The Company acknowledges that the Fee is in addition to any
compensation Xxxxxx Xxxxxxx earns in connection with its role as an underwriter to the
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Fund in the Offering, which services are distinct from and in addition to the marketing and
structuring services described above.
2. Term. This Agreement shall terminate upon 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.
3. Indemnification. The Company agrees to the indemnification and other agreements
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.
4. Not an Advisor. The Company acknowledges that Xxxxxx Xxxxxxx 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 Xxxxxx
Xxxxxxx, and Xxxxxx Xxxxxxx is not agreeing hereby, 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
addition, nothing in this Agreement shall be construed to constitute Xxxxxx Xxxxxxx as the agent or
employee of the Company or the Company as the agent or employee of Xxxxxx Xxxxxxx, and neither
party shall make any representation to the contrary. It is understood that Xxxxxx Xxxxxxx is
engaged hereunder solely to provide the services described above to the Company and that Xxxxxx
Xxxxxxx is not acting as an agent or fiduciary of, and Xxxxxx Xxxxxxx shall not have any duties or
liability to, the current or future partners, members or equity owners of the Company or any other
third party in connection with its engagement hereunder, all of which are hereby expressly waived
to the extent the Company has the authority to waive such duties and liabilities.
5. Not Exclusive. Nothing herein shall be construed as prohibiting Xxxxxx Xxxxxxx or
its affiliates from acting as an underwriter or financial advisor or in any other capacity for any
other persons (including other registered investment companies or other investment managers).
Neither this Agreement nor the performance of the services contemplated hereunder shall be
considered to constitute a partnership, association or joint venture between Xxxxxx Xxxxxxx and the
Company.
6. Assignment. This Agreement may not be assigned by either party without prior
written consent of the other party.
7. Amendment; Waiver. No provision of this Agreement may be amended or waived except
by an instrument in writing signed by the parties hereto.
8. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed in and to be performed in
that state.
9. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof.
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This Agreement shall be effective as of the date first written above.
| Very truly yours, BLACKROCK ADVISORS, LLC |
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| By: | ||||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Managing Director | |||
| Accepted and agreed to as of the date first above written: XXXXXX XXXXXXX & CO. INCORPORATED |
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| By: | |||
| Name: | |||
| Title: | |||
INDEMNIFICATION AGREEMENT
August [•], 2010
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx
Xxxxxxx”) to advise and assist the undersigned (together with its affiliates and subsidiaries,
referred to as the “Company”) with the matters set forth in the Marketing and Structuring
Fee Agreement dated August [•], 2010 between the Company and Xxxxxx Xxxxxxx (the “Marketing and
Structuring Fee Agreement”), in the event that Xxxxxx Xxxxxxx 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 the services
performed pursuant to and in accordance with the Marketing and Structuring Fee Agreement, the
Company has agreed to indemnify and hold harmless Xxxxxx Xxxxxxx and Xxxxxx Xxxxxxx’x affiliates
and their respective officers, directors, employees and agents and each other person, if any,
controlling Xxxxxx Xxxxxxx or any of Xxxxxx Xxxxxxx’x affiliates (Xxxxxx Xxxxxxx and each such
other person being an “Indemnified Person”) from and against any losses, claims, damages or
liabilities related to, arising out of or in connection with the activities (the
“Activities”) performed by any Indemnified Person in connection with, or arising out of, or
based upon, the Marketing and Structuring Fee Agreement and/or any action taken by any Indemnified
Person in connection therewith (including, without limitation, any presentation given by the
Company and an Indemnified Person relating to the shares of common stock (the “Shares”) of
BlackRock Build America Bond Trust (the “Fund”)), and will reimburse each Indemnified
Person for all reasonable expenses (including fees and expenses of counsel) actually incurred and accounted for in
connection with investigating, preparing, pursuing or defending any claim, suit, action,
proceeding, investigation or inquiry related to, arising out of or in connection with the
Activities, whether or not pending or threatened and whether or not any Indemnified Person is a
party. The Company will not, however, be responsible for any losses, claims, damages, liabilities
(or expenses relating thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of any Indemnified Person. The Company also agrees that no Indemnified
Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to
the Company for or in connection with the Activities, except for any such liability for losses,
claims, damages or liabilities incurred by the Company that are finally judicially determined to
have resulted from the bad faith or gross negligence of such Indemnified Person. The indemnification
provided hereunder shall not extend to those 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.
Notwithstanding the foregoing, in no event shall the Company be responsible for any losses,
claims, damages or liabilities to any Indemnified Person arising from any such claim, suit, action,
proceeding, investigation or inquiry in excess of the gross proceeds received by the Fund from the
initial public offering of the common share of beneficial interest,
par value $0.001 per share, of the Fund (the “Offering”); provided, however, that
the Company shall, as set forth above, indemnify and be responsible for, regardless of the gross
proceeds received by the Fund from the Offering, all expenses (including fees and
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expenses
of counsel) actually incurred and accounted for in connection with investigating, preparing, pursuing
or defending any claim, suit, action, proceeding, investigation or inquiry related to, arising out
of or in connection with the Activities, whether or not pending or threatened and whether or not
any Indemnified Person is a party, as set forth above.
The Company will not, without Xxxxxx Xxxxxxx’x prior written consent, which consent shall not
be unreasonably withheld or delayed, settle, compromise, consent to the entry of any judgment in or
otherwise seek to terminate any claim, suit, action, proceeding, investigation or inquiry in
respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is
a party thereto) unless such settlement, compromise, consent or termination includes a release of
each Indemnified Person from any liabilities arising out of such claim, suit, action, proceeding,
investigation or inquiry. No Indemnified Person seeking indemnification, reimbursement or
contribution under this agreement (the “Indemnification Agreement”) will, without the
Company’s prior written consent, settle, compromise, consent to the entry of any judgment in or
otherwise seek to terminate any claim, suit, action, proceeding, investigation or inquiry referred
to in the first paragraph of this Indemnification Agreement.
Promptly
as reasonably practicable after receipt by an Indemnified Person of
notice of the commencement of any Proceeding, the Indemnified Person
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 so to 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 an account
of this Indemnification Agreement.
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 partners and affiliates, on the one hand, and Xxxxxx
Xxxxxxx, on the other hand, in the matters contemplated by the Marketing and Structuring Fee
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
partners and affiliates and other constituencies, 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 partners 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 by or paid to or contemplated to be received
by or paid to the Company or its partners or affiliates, as the case may
be, as a result of or in connection with the transaction (whether or not consummated) for which
Xxxxxx Xxxxxxx has been retained to perform financial services bears to the fees paid to Xxxxxx
Xxxxxxx under the Marketing and Structuring Fee Agreement; provided that in no event shall the
Company contribute less than the amount necessary to assure that Xxxxxx Xxxxxxx is not liable for
losses, claims, damages, liabilities and expenses in excess of the amount of fees actually received
by Xxxxxx Xxxxxxx pursuant to the Marketing and Structuring Fee 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 Xxxxxx Xxxxxxx, on the other
hand.
This Indemnification Agreement, together with the Marketing and Structuring Fee Agreement, any
contemporaneous written agreements and any prior written agreements (to the extent not superseded
by this agreement) that relate to the Offering, represents the
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entire agreement between the Company and the Indemnified Parties with respect to the marketing
and structuring fee paid to Xxxxxx Xxxxxxx under the Marketing and Structuring Fee Agreement.
The Company acknowledges that in connection with the Offering: (i) Xxxxxx
Xxxxxxx has acted at arms length, is not an agent of, and owes no fiduciary duties to, the Company,
the Fund or any person affiliated with the Fund or the Company, (ii) Xxxxxx Xxxxxxx owes the
Company only those duties and obligations set forth in this Indemnification Agreement and (iii)
Xxxxxx Xxxxxxx may have interests that differ from those of the Company. The Company waives to the
full extent permitted by applicable law any claims any of the Company, the Fund or any person
affiliated with the Company or the Fund may have against Xxxxxx Xxxxxxx arising from an alleged
breach of fiduciary duty in connection with the offering of the Shares.
The provisions of this Indemnification Agreement shall apply to the Activities and any
modification thereof and shall remain in full force and effect regardless of any termination or the
completion of Xxxxxx Xxxxxxx’x services under the Marketing and Structuring Fee Agreement.
This Indemnification Agreement may not be assigned by either party without
prior written consent of the other party. No provision of this Indemnification
Agreement may be amended or waived except by an instrument in writing signed by
the parties hereto. This Indemnification
Agreement may be executed in any number of counterparts, each of which shall be
an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Indemnification
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
THIS
INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE SERVICES PERFORMED
PURSUANT TO AND IN ACCORDANCE WITH THE AGREEMENT (“CLAIM”), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED IN AND TO
BE PERFORMED IN THAT STATE. 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 THE INDEMNIFIED
PERSONS 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 INDEMNIFICATION
AGREEMENT IS BROUGHT BY ANY THIRD PARTY AGAINST THE BANK OR ANY
INDEMNIFIED PERSON. EACH INDEMNIFIED PERSON 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 INDEMNIFICATION AGREEMENT. EACH INDEMNIFIED
PERSON AND THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY PROCEEDING
OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS
INDEMNIFICATION AGREEMENT BROUGHT IN ANY SUCH COURT SHALL BE
CONCLUSIVE AND BINDING UPON THE INDEMNIFIED PERSON AND THE COMPANY,
AS THE CASE MAY BE, AND MAY BE ENFORCED IN ANY OTHER COURTS TO THE
JURISDICTION OF WHICH THE INDEMNIFIED PERSON AND THE COMPANY, AS THE
CASE MAY BE, IS OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
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| Very truly yours, BLACKROCK ADVISORS, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Accepted and agreed to as of the date first above written: XXXXXX XXXXXXX & CO. INCORPORATED |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Indemnification Agreement]
