Exhibit (h)(2)
Distribution Agreement
Agreement dated as of September 29, 2006 between BLACKROCK SENIOR FLOATING
RATE FUND, INC., a Maryland corporation (the "Fund"), and BLACKROCK
DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WHEREAS, the Fund is a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act") and it is
affirmatively in the interest of the Fund to offer its shares for sale
continuously; and
WHEREAS, the Fund desires to retain the Distributor as its distributor
with respect to the continuous offering of the Fund's shares and the Distributor
is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth and intending to be legally bound, the parties hereto agree as follows:
1. Appointment of Distributor. The Fund hereby appoints the Distributor as
a principal underwriter of the Fund to sell shares of common stock of the Fund
(sometimes herein referred to as the "shares") on the terms and for the period
set forth in this Agreement. The Distributor 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
Distributor 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 Fund's most recent amendment to its 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"), relating to its shares (the Registration Statement, as presently
in effect and as amended or supplemented from time to time, is herein called the
"Registration Statement"); and
b. The Fund's most recent Prospectus and all amendments and
supplements thereto (each such Prospectus and supplements thereto, as presently
in effect and as from time to time amended and supplemented, is herein called
the "Prospectus").
3. Services and Duties. The Distributor enters into the following
covenants with respect to its services and duties:
a. The Distributor 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 as described in
the Prospectus. The Distributor will act only in its own behalf
as principal in making agreements with selected dealers. No broker-dealer or
other person which enters into a selling or servicing agreement with the
Distributor 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 Distributor shall
use its best efforts to sell shares of the Funds but shall not be obligated to
sell any certain number of shares.
b. The Distributor 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 Distributor, the
Distributor will act in conformity with the Prospectus and resolutions and other
instructions of the Fund's Board of Directors and will comply with the
requirements of the 1933 Act, the Securities Exchange Act of 1934, the 1940 Act
and all other applicable federal or state law.
d. The Distributor will bear the cost of printing and distributing
any Prospectus (including any supplement thereto) to persons who are not
shareholders; provided, however, that the Distributor shall not be obligated to
bear the expenses incurred by the Fund in connection with the preparation and
printing of any amendment to any Registration Statement or Prospectus necessary
for the continued effective registration of the shares under the 1933 Act and
state securities laws and the distribution of any such document to existing
shareholders of the Fund.
e. 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 the redemption of its shares at any time permitted by the 1940 Act or
the rules and regulations of the Commission ("Rules").
f. The Fund reserves the right to reject any order for shares but
will not do so without reasonable cause.
4. Forfeiture of Sales Charges. If any shares sold by the Distributor
under the terms of this Agreement are repurchased by the Fund or by the
Distributor as agent or are tendered for repurchase within seven business days
after the date of confirmation of the original purchase of said shares, the
Distributor shall forfeit the amount above the net asset value received by it in
respect of such shares, provided that the portion, if any, of such amount
re-allowed by the Distributor to broker-dealers or other persons shall be
repayable to the Fund only to the extent recovered by the Distributor from the
broker-dealer or other person concerned. The Distributor shall include in the
form of agreement with such broker-dealers and other persons a corresponding
provision for the forfeiture by them of their concession with respect to shares
sold by them or their principals and repurchased by the Fund or by the
Distributor as agent (or tendered for repurchase) within seven business days
after the date of confirmation of such initial purchases.
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5. Limitations of Liability. The Distributor 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 its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Notwithstanding anything in this
Agreement to the contrary, (i) the Distributor shall not be liable for any
losses or damages occurring directly or indirectly by reason of circumstances
beyond its reasonable control and (ii) the Distributor shall not be liable for
any consequential, special or indirect losses or damages (whether or not the
likelihood of such losses or damages was known by the Distributor). The
provisions of this Section 5 shall survive termination of this Agreement.
6. Proprietary and Confidential Information. The Distributor 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. Notwithstanding the
foregoing, records and information shall not be subject to the foregoing
obligations set forth in this Section 6 if they are required to be disclosed by
the Distributor pursuant to a requirement of a court order, subpoena,
governmental or regulatory agency or law (provided the Distributor will provide
the Company written notice of such requirement, to the extent such notice is
permitted). The provisions of this Section 6 shall survive termination of this
Agreement.
7. Indemnification.
a. The Fund represents and warrants to the Distributor that its
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 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 light of the circumstances under which they were made,
not misleading, except that no representation or warranty in this Section 7
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
Distributor or one of its affiliates expressly for use in the Registration
Statement or Prospectus.
b. The Fund agrees that it will indemnify, defend and hold harmless
the Distributor, its several officers, and directors, and any person who
controls the Distributor 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 Distributor, its several officers, and directors, and any person who
controls the Distributor 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) arise out
of, or are based upon, any untrue
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statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus 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 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, and will reimburse the Distributor, its several
officers, and directors, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by the Distributor, its several officers, and directors, and
any person who controls the Distributor within the meaning of Section 15 of the
1933 Act, in investigating, defending or preparing to defend any action,
proceeding or claim related thereto; provided, however, that the Fund shall not
be liable in any case to the extent that such loss, claim, damage 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 with respect to the Fund in reliance upon
and in conformity with written information furnished to the Fund by or on behalf
of the Distributor or one of its affiliates specifically for inclusion therein
or arising out of the failure of the Distributor to deliver a current
Prospectus.
c. The Fund shall not indemnify any person pursuant to this Section
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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 directors of the Fund who
are neither "interested parties" (as defined in the 0000 Xxx) nor parties to the
proceeding, or by independent legal counsel in a written opinion.
d. The Distributor will indemnify and hold harmless the Fund and its
several officers and directors, 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) 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 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, 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 directors by or on
behalf of the Distributor or one of its affiliates specifically for inclusion
therein, and will reimburse the Fund and its several officers, directors and
such controlling persons for any legal or other expenses reasonably incurred by
any of them in investigating, defending or preparing to defend any action,
proceeding or claim related thereto.
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e. The provisions of this Section 7 shall survive termination of
this Agreement.
8. Duration and Termination. This Agreement shall become effective as of
the date first written above and, unless sooner terminated as provided herein,
shall continue until two years from the date first written above. Thereafter, if
not terminated, this Agreement shall continue automatically with respect to the
Fund 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 Directors 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
Directors 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 Directors of the Fund or by a vote of a "majority of the
outstanding voting securities" of the Fund on 60-days' written notice to the
Distributor, or by the Distributor 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.).
9. 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.
10. Notices. Notices of any kind to be given to the Fund hereunder by the
Distributor shall be in writing and shall be duly given if mailed or delivered
to the Fund at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention:
President, with a copy to Secretary, or at such other address or to such
individual as shall be so specified by the Fund to the Distributor. Notices of
any kind to be given to the Distributor hereunder by the Fund shall be in
writing and shall be duly given if mailed or delivered to BlackRock
Distributors, Inc., 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000, Attention:
President, or at such other address or to such other individual as shall be so
specified by the Distributor to the Fund.
11. Rule 38a-1. The Distributor will provide such information as the Fund
reasonably requests in order for the Fund to comply with its obligations
pursuant to Rule 38a-1 under the 1940 Act.
12. Miscellaneous.
a. 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
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thereby. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. This Agreement shall be
deemed to be a contract made in Delaware and governed by Delaware law, without
regard to principles of conflicts of law.
b. The Fund acknowledges that the Distributor may receive float
benefits and/or investment earnings in connection with maintaining certain
accounts required to provide services under this Agreement.
c. Notwithstanding any provision herein to the contrary, each party
hereto agrees that any Nonpublic Personal Information, as defined under Section
248.3(t) of Regulation S-P ("Regulation S-P"), promulgated under the
Xxxxx-Xxxxx-Xxxxxx Act (the "Act"), disclosed by a party hereunder is for the
specific purpose of permitting the other party to perform the services set forth
in this Agreement. Each party agrees that, with respect to such information, it
will comply with Regulation S-P and the Act and that it will not disclose any
Nonpublic Personal Information received in connection with this Agreement to any
other party, except to the extent as necessary to carry out the services set
forth in this Agreement or as otherwise permitted by Regulation S-P or the Act.
d. To help the U.S. government fight the funding of terrorism and
money laundering activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information that identifies
each person who initially opens an account with that financial institution on or
after October 1, 2003. Consistent with this requirement, the Distributor will
request (or already has requested) the Fund's name, address and taxpayer
identification number or other government-issued identification number. The
Distributor may also ask (and may have already asked) for additional identifying
information, and the Distributor may take steps (and may have already taken
steps) to verify the authenticity and accuracy of these data elements.
e. The Fund hereby represents and warrants to the Distributor that
(i) the terms of this Agreement, (ii) the fees and expenses associated with this
Agreement, and (iii) any benefits accruing to the Distributor or to the adviser
or sponsor of the Fund in connection with this Agreement, including but not
limited to any fee waivers, conversion cost reimbursements, up front payments,
signing payments or periodic payments made or to be made by the Distributor to
such adviser or sponsor or any affiliate of the Fund relating to this Agreement
have been fully disclosed to the Fund's Board of Directors and that, if required
by applicable law, such Board of Directors has approved or will approve the
terms of this Agreement, any such fees and expenses, and any such benefits
13. Counterparts. This Agreement may be executed in counterparts, all of
which together shall constitute one and the same instrument.
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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.
BLACKROCK SENIOR FLOATING RATE FUND, INC.
By:______________________________________
Title:
BLACKROCK DISTRIBUTORS, INC.
By:______________________________________
Title:
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