EX-24.2(h)(1)
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FORM OF
PARTNERS BALANCED TRUST
UNDERWRITING AGREEMENT
Agreement dated as of [ ], 2003 between PARTNERS
BALANCED TRUST, a Delaware statutory trust (the "Fund"), and BLACKROCK
DISTRIBUTORS, INC., a Delaware corporation (the "Underwriter").
WHEREAS, the Fund is a closed-end management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Underwriter as its
principal underwriter to provide for the sale of all classes of its common
shares of beneficial interest ("Shares"), and the Underwriter is willing to
render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein and intending to be legally bound, the parties
hereto agree as follows:
1. Appointment of Underwriter. The Fund hereby appoints the
Underwriter as principal underwriter of its Shares on the terms and for the
period set forth in this Agreement. The Underwriter hereby accepts such
appointment and agrees to render the services and duties set forth in Section
3 below.
2. Delivery of Documents. The Fund has furnished, or will furnish
the Underwriter upon request, with copies, properly certified or
authenticated, of each of the following documents and will deliver to it all
future amendments and supplements, if any:
a. The Certificate of Trust of the Fund, filed with the
Secretary of State of the State of Delaware on November 22, 2002, as the same
may be amended from time to time (the "Certificate of Trust");
b. The Fund's Second Amended and Restated Agreement and
Declaration of Trust, dated as of [ ], 2003, as the same may be amended from
time to time (the "Declaration of Trust");
c. The Fund's Amended and Restated By-Laws, as the same may be
amended from time to time (the "By-Laws");
d. Resolutions of the Fund's Board of Trustees authorizing the
execution and delivery of this Agreement;
e. The Fund's Registration Statement under the Securities Act
of 1933, as amended (the "1933 Act"), and the 1940 Act on Form N-2 as filed
with the Securities and Exchange Commission (the "Commission") on December 24,
2002, relating to the Shares, as the same may be amended from time to time
(the "Registration Statement"); and
f. The Fund's Prospectus and Statement of Additional
Information and all amendments and supplements thereto (such Prospectus and
Statement of Additional Information and supplements thereto, as presently in
effect and as from time to time amended and supplemented, are herein called
the "Prospectus").
3. Services and Duties. The Underwriter enters into the following
covenants with respect to its services and duties:
a. The Underwriter agrees to sell, as agent, from time to time
during the term of this Agreement, Shares upon the terms and at the current
offering price (including any front-end, deferred contingent or other
applicable sales charge) as described from time to time in the Prospectus. The
Underwriter will act only on its own behalf as principal in making agreements
with selected dealers. No broker-dealer or other person who enters into a
selling or servicing agreement with the Underwriter shall be authorized to act
as agent for the Fund in connection with the offering or sale of Shares to the
public or otherwise. The Underwriter shall use its best efforts to sell Shares
but shall not be obligated to sell any certain number of Shares.
b. The Underwriter shall prepare or review, provide advice
with respect to, and file with the federal and state agencies or other
organizations as required by federal, state, or other applicable laws and
regulations, all sales literature (advertisements, brochures and shareholder
communications) for the Fund.
c. In performing all of its services and duties as
Underwriter, the Underwriter will act in conformity with the Certificate of
Trust, Declaration of Trust, By-Laws, Registration Statement (including the
Prospectus), in each case as amended from time to time, and resolutions and
other instructions of the Fund's Board of Trustees and will comply with the
requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended,
the 1940 Act and all other applicable federal or state law and all applicable
rules of regulatory bodies, including without limitation the Conduct Rules of
the National Association of Securities Dealers, Inc.
d. The Fund shall have the right to suspend the sale of Shares
at any time in response to conditions in the securities markets or otherwise,
and to suspend periodic tender offers at any time permitted by the 1940 Act or
the rules and regulations of the Commission.
e. The Fund reserves the right to reject any order for Shares.
f. The Underwriter agrees to transmit to each broker- dealer
or other person who enters into a selling or servicing agreement ("Selling
Agents") with the Underwriter sufficient repurchase offer notices (as supplied
by the Fund) necessary to allow such Selling Agents to provide repurchase
offer notices to its customers within the times required by, and in accordance
with any requirements from time to time set forth in, the Fund's Prospectus
and any notices to shareholders relating to repurchase offers.
g. The Underwriter represents that it has policies and
procedures in place that comply with its obligations under the provisions of
the International Money Laundering Abatement Act, the USA PATRIOT Act, the
Bank Secrecy Act ("BSA") and any other anti-money laundering law, rule or
regulation applicable to us as a financial institution under the BSA, or
otherwise. Subject to legal restrictions, the Underwriter will, upon the
Fund's request, promptly provide to the Fund evidence of those policies and
procedures and the Underwriter's compliance therewith and/or evidence
establishing the identities and sources of the funds for each purchase of
shares of the Fund.
h. The Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe
by rules and regulations applicable to it as the principal underwriter of an
investment company registered under the 1940 Act such accounts, books and
other documents as are necessary or appropriate to record its transactions
with the Funds. Such accounts, books and other documents shall be subject at
any time and from time to time to such reasonable periodic, special and other
examinations by the Commission or any member or representative thereof as the
Commission may prescribe. The Underwriter shall furnish to the Commission
within such reasonable time as the Commission may prescribe copies of or
extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
4. No Secondary Market. It is understood that no secondary market
for the Shares exists currently, or is expected to develop.
5. Expenses. The Fund 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 Underwriter of
this Agreement and such other documents as may be required in connection with
the offering, purchase, sale, issuance or delivery of the Shares, (iii) the
fees and disbursements of the Fund's counsel, accountants and other advisors,
(iv) the printing and delivery to the Underwriter of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (v) notices of shareholders meetings, proxies and proxy statements,
and annual and semi-annual reports and other communications with shareholders
and (vi) notices of periodic repurchases.
6. Payments of Sales Charges. Any sales charges payable in
connection with purchases of Shares shall be payable to the Underwriter or its
assignees, all in accordance with the Fund's Prospectus.
7. Limitations of Liability. The Underwriter shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
Underwriter's part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
8. Proprietary and Confidential Information. The Underwriter agrees
on behalf of itself and its employees to treat confidentially and as
proprietary information of the Fund all records and other information relative
to the Fund and prior, present or potential shareholders, and not to use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to, and
approval in writing by, the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Underwriter may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Fund.
9. Indemnification.
a. The Fund represents and warrants to the Underwriter that
the Registration Statement and the Prospectus at all times will, in all
material respects, conform to the applicable requirements of the 1933 Act and
the rules and regulations of the Commission thereunder and will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they
were made) not misleading, except that no representation or warranty in this
Section 9 shall apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Fund by or on behalf of
the Underwriter expressly for use in the Registration Statement or Prospectus.
b. The Fund agrees that it will indemnify, defend and hold
harmless the Underwriter, its several officers, and directors, and any person
who controls the Underwriter within the meaning of Section 15 of the 1933 Act,
from and against any losses, claims, damages or liabilities, joint or several,
to which the Underwriter, its several officers, and directors, and any person
who controls the Underwriter within the meaning of Section 15 of the 1933 Act,
may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
(i) arise out of, or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or in any application or other document executed by or on behalf of
the Fund or are based upon information furnished by or on behalf of the Fund
filed in any state in order to qualify the Shares under the securities or blue
sky laws thereof ("Blue Sky Application") or (ii) arise out of, or are based
upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (in each case with respect to the Prospectus, in light of the
circumstances in which they were made) and will reimburse the Underwriter, its
several officers, and directors, and any person who controls the Underwriter
within the meaning of Section 15 of the 1933 Act, for any legal or other
expenses reasonably incurred by the Underwriter, its several officers, and
directors, and any person who controls the Underwriter within the meaning of
Section 15 of the 1933 Act, in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that the Fund shall
not be liable in any case to the extent that such loss, claim, damage, expense
or liability arises out of, or is based upon, any untrue statement, alleged
untrue statement, or omission or alleged omission made in the Registration
Statement, the Prospectus or any Blue Sky application in reliance upon and in
conformity with written information furnished to the Fund by or on behalf of
the Underwriter specifically for inclusion therein or arising out of the
failure of the Underwriter to deliver a current Prospectus. The Fund shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense, of any suit brought to enforce any claims, but
if the Fund elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Underwriter or person or persons,
defendant or defendants, in the suit. In the event the Fund elects to assume
the defense of any suit and retain counsel, the Underwriter, officers or
trustees or controlling person or persons, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them. If the Fund does not elect to assume the defense of any suit, it will
reimburse the Underwriter, officers or trustees or controlling person or
persons, defendant or defendants in the suit for the reasonable fees and
expenses of any counsel retained by them. The Fund agrees to notify the
Underwriter promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the issuance
or sale of any of the Shares.
c. The Fund shall not indemnify any person pursuant to this
Section 9 unless the court or other body before which the proceeding was
brought has rendered a final decision on the merits that such person was not
liable by reason of his or her willful misfeasance, bad faith or gross
negligence in the performance of his or her duties, or his or her reckless
disregard of any obligations and duties, under this Agreement ("disabling
conduct") or, in the absence of such a decision, a reasonable determination
(based upon a review of the facts) that such person was not liable by reason
of disabling conduct has been made by the vote of a majority of a quorum of
the trustees of the Fund who are neither "interested persons" (as defined in
the 0000 Xxx) nor parties to the proceeding, or by independent legal counsel
in a written opinion.
d. The Underwriter will indemnify and hold harmless the Fund
and its several officers and trustees, and any person who controls the Fund
within the meaning of Section 15 of the 1933 Act, from and against any losses,
claims, damages or liabilities, joint or several, to which any of them may
become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
(i) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or any Blue Sky application, or (ii) arise out of, or are based
upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (in each case with respect to the Prospectus, in light of the
circumstances in which they were made), which statement or omission was made
in reliance upon and in conformity with information furnished in writing to
the Fund or any of its several officers and trustees by or on behalf of the
Underwriter specifically for inclusion therein, and will reimburse the Fund
and its several officers, trustees and such controlling persons for any legal
or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim. The
Underwriter shall be entitled to participate, at its own expense, in the
defense, or, if it so elects, to assume the defense, of any suit brought to
enforce the claim, but if the Underwriter elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to the
Fund, to its officers and trustees and to any controlling person or persons,
defendant or defendants in the suit. In the event that the Underwriter elects
to assume the defense of any suit and retain counsel, the Fund, officers and
trustees or controlling person or persons, defendant or defendants in the suit
shall bear the fees and expenses of any additional counsel retained by them.
If the Underwriter does not elect to assume the defense of any suit, it will
reimburse the Fund, officers and trustees or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of
any counsel retained by them. The Underwriter agrees to notify the Fund
promptly of the commencement of any litigation or proceedings against it in
connection with the issue and sale of any of the Shares.
e. If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (b) and (d) of this
Section 9 in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Fund on the one hand and the Underwriter
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above 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 Fund on the
one hand and of the Underwriter on the other in connection with the statements
or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Fund on the one hand and the Underwriter on the other
shall be deemed to be in the same respective proportions as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Fund and the total underwriting discounts
and commissions received by the Underwriter, bear to the aggregate public
offering price of the Shares. The relative fault of the Fund on the one hand
and of the Underwriter on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied
by the Fund or by the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably incurred
by such party in connection with investigating, preparing to defend or
defending any proceeding.
f. The Fund and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (e) above.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
10. Duration and Termination. This Agreement shall become effective
upon its execution as of the date first written above and, unless sooner
terminated as provided herein, shall continue for an initial two year term.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive terms of one year, provided that such continuance is specifically
approved at least annually (a) by a vote of a majority of those members of the
Fund's Board of Trustees who are not parties to this Agreement or "interested
persons" of any such party, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the Fund's Board of Trustees or by vote
of a "majority of the outstanding voting securities" of the Fund; provided,
however, that this Agreement may be terminated by the Fund at any time,
without the payment of any penalty, by vote of a majority of the entire Board
of Trustees or by a vote of a "majority of the outstanding voting securities"
of the Fund on 60-days' written notice to the Underwriter, or by the
Underwriter at any time, without the payment of any penalty, on 90-days'
written notice to the Fund. This Agreement will automatically and immediately
terminate in the event of its "assignment." (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
Upon termination of this Agreement, the Underwriter shall not receive any
underwriting fees for sales of Shares occurring on or after the termination
date; provided that the Underwriter may receive reimbursement for out of
pocket expenses incurred in connection with such sales and provided that the
indemnification and contribution obligations of the parties will survive any
termination of this Agreement.
11. Amendment of this Agreement. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which an enforcement of the change,
waiver, discharge or termination is sought.
12. Notices. Notices of any kind to be given to the Fund hereunder
by the Underwriter shall be in writing and shall be duly given if mailed or
delivered to the Fund at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
with a copy to , 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other address or to such individual as shall be so specified by the Fund to
the Underwriter. Notices of any kind to be given to the Underwriter hereunder
by the Fund shall be in writing and shall be duly given if mailed or delivered
to BlackRock Distributors, Inc., 000 Xxxxx Xxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx
00000, Attention: , or at such other address or to such other individual as
shall be so specified by the Underwriter to the Fund.
13. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
15. Counterparts. This Agreement may be executed in counterparts,
and by facsimile, all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
above written.
PARTNERS BALANCED TRUST
By:________________________________
Title:
BLACKROCK DISTRIBUTORS, INC.
By:________________________________
Title:
