BlackRock Limited Duration Income Trust
(a Delaware statutory trust)
[___] Common Shares of Beneficial Interest
(Par Value $.001 Per Share)
FORM OF PURCHASE AGREEMENT
[___], 2003
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
[Other Underwriters]
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
BlackRock Limited Duration Income Trust, a Delaware statutory trust
(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, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), X.X.
Xxxxxxx & Sons, Inc. and [UBS Securities LLC] 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 is acting as representative (in such capacity,
the "Representative"), 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 common shares of beneficial interest, par value $.001 per
share, of the Trust ("Common Shares") set forth in said Schedule A, and with
respect to the grant by the Trust to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of [___] additional Common Shares to cover over-allotments, if any. The
aforesaid [___] Common Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the [____] Common Shares subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities."
The Trust understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems 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. 333-105352 and No.
811-21349) covering the registration of the Securities 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 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 Securities, 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 [___], 2003 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.
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, as of the Closing Time referred to in Section
2(c) hereof, and as of each Date of Delivery (if any) referred to in Section
2(b) 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 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 (and, if any Option Securities
are purchased, at the Date of Delivery), 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
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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 (and, if any Option
Securities are purchased, at the Date of Delivery), 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 Securities, the Trust has
complied or will comply with the requirements of Rule 111 under the
1933 Act Rules and 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) Expense Summary. The information set forth in the
Prospectus in the Fee Table has been prepared in accordance with the
requirements of Form N-2 and to the extent estimated or projected, such
estimates or projections are reasonably believed to be attainable and
reasonably based.
(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 (a "Trust
Material Adverse 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.
(vi) Good Standing of the Trust. The Trust has been duly
organized and is validly existing as a statutory trust in good standing
under the laws of the State of Delaware and has statutory 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
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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 Trust 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, to the knowledge of the Trust
or the Adviser, 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 0000
Xxx) of the Trust or an "affiliated person" (as defined in the 0000
Xxx) 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 "Description of
Shares." 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 Securities. The
Securities 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 Common Shares
conform to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities 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 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 Trust Material
Adverse Effect; and the execution, delivery and performance of this
Agreement, the Management Agreement, the Sub-Advisory Agreement, the
Custodian Agreement and the Transfer Agent and Service Agreement
referred to in the Registration Statement (as used herein, the
"Management Agreement," the "Sub-Advisory Agreement", the "Custodian
Agreement" and the "Transfer Agency Agreement," respectively) and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Trust with its obligations
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hereunder have been duly authorized by all necessary 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 Trust 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 Trust 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 Trust 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 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 Trust Material Adverse Effect;
provided that the Trust's right to use the name "BlackRock" is limited
as set forth in Section 16 of the Management Agreement. 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 Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
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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
Trust 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 Trust 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 Trust
Material Adverse Effect.
(xviii) Advertisements. Any advertising, sales literature or
other promotional material (including "prospectus wrappers", "broker
kits," "road show slides," "road show scripts" and "electronic road
show presentations") authorized in writing by or prepared by the Trust
or the Advisers used in connection with the public offering of the
Securities (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 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 intends to qualify 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 Shares, will not
distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, a preliminary
prospectus, the Prospectus or the sales materials.
(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 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.
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(xxiii) Material Agreements. This Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Custodian Agreement and the
Transfer 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 and the Transfer Agency Agreement, each of the
Management Agreement, the Sub-Advisory Agreement, the Custodian
Agreement and the Transfer 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 Securities have been duly authorized
for listing, upon notice of issuance, on the New York Stock Exchange
("NYSE") and the Trust's registration statement on Form 8-A under the
1934 Act has become effective.
(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, and as of each Date of Delivery
(if any) referred to in Section 2(b) 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 a
corporation 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 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 Management Agreement and the Sub-Advisory
Agreement to which it is a party.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement, the Management Agreement, the Additional
Compensation Agreement between Xxxxxxx Xxxxx and BAI (the "Additional
Compensation Agreement") and the Sub-Advisory Agreement have each been
duly authorized, executed and delivered by each respective Adviser,
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and the Management Agreement, the Additional Compensation 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, the Additional Compensation
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, the Additional Compensation
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
Management Agreement and Sub-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 0000 Xxx) 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.
(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 a
Trust Material Adverse Effect on the Trust.
(c) Officer's Certificates. Any certificate signed by any officer of
the Trust or the Advisers delivered to the Representative 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.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. 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 Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Trust hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [____] Common Shares in the
aggregate at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Trust and payable
on the Initial Securities but not payable on the Option Securities. The option
hereby granted will expire 45 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representative to the
Trust setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representative, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as Xxxxxxx Xxxxx in its discretion shall make to eliminate any sales
or purchases of a fractional number of Option Securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other place as shall be agreed upon by the Representative and
the Trust, at 10:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) 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 Representative and the Trust (such time and date of payment
and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Trust, on each Date of Delivery as specified in the notice from the
Representative to the Trust.
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 Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, 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 Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
9
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representative may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
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 will notify
the Representative immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration 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 Securities 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
Representative 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 Representative 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 Representative or counsel for the
Underwriters shall object.
(iii) Delivery of Registration Statements. The Trust has
furnished or will deliver to the Representative 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 Representative, 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.
10
(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 the Prospectus is required to be delivered under
the 1933 Act 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 Securities, 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 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
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions of the United States as the
Representative 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 securities 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
Securities 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 Securities in the manner specified
in the Prospectus under "Use of Proceeds".
(ix) Listing. The Trust will use its reasonable best efforts
to effect the listing of the Securities on the NYSE, subject to notice
of issuance, concurrently with the effectiveness of the Registration
Statement.
(x) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectus, the Trust will not, without the
prior written consent of Xxxxxxx Xxxxx, (A) directly
11
or indirectly, offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of Common
Shares or any securities convertible into or exercisable or exchangeable for
Common Shares or file any registration statement under the 1933 Act with respect
to any of the foregoing or (B) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (A) or (B) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (1) the Securities to be sold hereunder or (2)
Common Shares issued pursuant to any dividend reinvestment plan.
(xi) 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.
(xii) 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.
(xiii) No Manipulation of Market for Securities. 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 Securities, and (b) until
the Closing Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Securities or pay any person any compensation for
soliciting purchases of the Securities or (ii) pay or agree to pay to
any person any compensation for soliciting another to purchase any
other securities of the Trust .
(xiv) 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 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.
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 Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities 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 Securities to the Underwriters, (iv) the fees and
disbursements of the Trust's counsel, accountants and other advisors, (v) the
qualification of the Securities 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 Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
12
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in connection with the
listing of the Securities on the NYSE and (xi) the printing of any sales
material. Also, the Trust shall pay to Xxxxxxx Xxxxx, on behalf of the
Underwriters, $.0067 per share of the securities purchased pursuant to this
agreement as partial reimbursement of expenses incurred in connection with the
offering. The Advisers have agreed to pay organizational expenses and offering
costs of the Trust (other than sales load, but including the partial
reimbursement of expenses described in the preceding sentence) that exceed $.04
per Common Share.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative 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 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
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
Representative shall have received the favorable opinions, dated as of Closing
Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Trust, and
Xxxxxxx X. Xxxxxx, 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 substantially 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
Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance US 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), (vi), (vii)
(solely as to preemptive or other similar rights arising by operation of law or
under the charter or by-laws of the Trust), (viii) through (x), inclusive,
(xii), (xiv) (solely as to the information in the Prospectus under "Description
of Shares") and the last 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 Representative. 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.
13
(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, business affairs or business prospects of the
Trust, whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate of a duly authorized officer of
the Trust and of the chief financial or chief accounting officer 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 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 with all agreements and satisfied all
conditions on its part to be performed or satisfied 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 Representative shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representative, 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 Representative
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.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official notice of
issuance.
(h) 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.
(i) Execution of Additional Compensation Agreement. At Closing Time,
Xxxxxxx Xxxxx shall have received the Additional Compensation Agreement, dated
as of the Closing Date, as executed by BAI.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Trust contained herein and the statements in any certificates furnished
by the Trust hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representative shall have received:
(i) Officers' Certificates. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Trust and of the chief
financial or chief accounting officer of the Trust and of the President
or a Vice President or Managing Director of each of the Advisers
confirming that the information contained in the certificate delivered
by each of them at the Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for the Trust and the Advisers. The
favorable opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
for the Trust, and Xxxxxxx X. Xxxxxx, counsel for the Advisers, in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
14
(iii) Opinion of Counsel for the Underwriters. The favorable
opinion of Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the Representative
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representative pursuant to
Section 5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(k) 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 require for the purpose of enabling them to pass upon the
issuance and sale of the Securities 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
Securities as herein contemplated shall be satisfactory in form and substance to
the Representative and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by notice to the Trust at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, 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
15
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred 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 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 l3oss,
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
16
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 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.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
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 Securities
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 Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities 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 Securities 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.
17
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 Securities 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 0000 Xxx) 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, 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 Initial Securities 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 Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative 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 (exclusive
of any supplement thereto), 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 Representative,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, 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 New York 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.
18
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 Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Representative
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 Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities 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
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Trust to sell the Option Securities to be
purchased and sold on such Date of Delivery 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 or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Trust to sell the relevant Option Securities,
as the case may be, either the Representative or the Trust shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
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. Tax Disclosure.
Notwithstanding any other provision of this Agreement, from the
commencement of discussions with respect to the transactions contemplated
hereby, the Trust (and each employee, representative or other agent of the
Trust) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure (as such terms are used in Sections 6011, 6111
and 6112 of the U.S. Code and the Treasury Regulations promulgated thereunder)
of the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided relating to such
tax treatment and tax structure.
SECTION 12. 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
Representative, x/x Xxxxxxx Xxxxx & Xx., Xxxxx Xxxxx, Xxxxx 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 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxxxxxxxxx.
SECTION 13. 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
19
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 Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. 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 15. 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.
20
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 Limited Duration Income
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 LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
[CO-MANAGERS]
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
-------------------------------------
Authorized Signatory
For themselves and as Representative of the other Underwriters named in Schedule
A hereto.
21
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- --------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.........................................
Sch A-1
Total...........................................................
Sch A-1
SCHEDULE B
BLACKROCK Limited Duration Income Trust
[_____] Common Shares of Beneficial Interest
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $20.00.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[___], being an amount equal to the initial
public offering price set forth above less $[__] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Trust
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A
FORM OF OPINION OF TRUST'S AND ADVISERS'
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(A) With respect to the Trust:
(i) The Trust has been duly organized and is validly existing
as a statutory trust in good standing under the laws of the State of
Delaware.
(ii) The Trust has statutory 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 the Purchase Agreement.
(iii) 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 Trust Material Adverse Effect.
(iv) To the best of our knowledge, the Trust does not have any
subsidiaries.
(v) The authorized, issued and outstanding shares of
beneficial interest of the Trust is as set forth in the Prospectus
under the caption "Description of Shares -- Common Shares" (except for
subsequent issuances, if any, pursuant to the Purchase Agreement); 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); the Common Shares conform as to
legal matters to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in the
instruments defining the same; and 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.
(vi) The Securities to be purchased by the Underwriters from
the Trust have been duly authorized for issuance and sale to the
Underwriters pursuant to the Purchase Agreement and, when issued and
delivered by the Trust pursuant to the Purchase Agreement against
payment of the consideration set forth in the Purchase Agreement, will
be validly issued and fully paid and non-assessable, except as provided
for in the Trust's declaration of trust, and no holder of the
Securities is or will be subject to personal liability by reason of
being such a holder.
(vii) The issuance of the Securities is not subject to
preemptive or other similar rights of any securityholder of the Trust.
(viii) The Purchase Agreement has been duly authorized,
executed and delivered by the Trust.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 497(c) or Rule
497(h) has been made in the manner and within the time period required
by Rule 497; and, to the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act, and,
to the best of our knowledge, no order of suspension or revocation of
registration
A-1
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 threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus and each amendment or
supplement to the Registration Statement and Prospectus as of their
respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion), and the
notification on Form N-8A complied as to form in all material respects
with the requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xii) The form of certificate used to evidence the Common
Shares complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the declaration of
trust and by-laws of the Trust and the requirements of the New York
Stock Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Trust is a party, or to which the property of the Trust is
subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a
Trust 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 the Purchase
Agreement or the performance by the Trust of its obligations
thereunder.
(xiv) The information in the Prospectus under "Description of
Shares" and "Tax Matters" and in the Registration Statement under Item
29 (Indemnification), to the extent that it constitutes matters of law,
summaries of legal matters, the Trust's declaration of trust and
by-laws or legal proceedings, or legal conclusions, has been reviewed
by us and is correct in all material respects.
(xv) Each of the Management Agreement, the Sub-Advisory
Agreement, the Custodian Agreement, the Transfer Agency Agreement and
the Purchase Agreement comply in all material respects with all
applicable provisions of the 1940 Act, Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations.
(xvi) The Trust is duly registered with the Commission under
the 1940 Act as a closed-end diversified management investment company;
and, to the best of our knowledge, no order of suspension or revocation
of such registration has been issued or proceedings therefor initiated
or threatened by the Commission.
(xvii) To the best of our knowledge, no person is serving as
an officer, trustee or investment adviser of the Trust except in
accordance with the 1940 Act and the Rules and Regulations and the
Investment Advisers Act and the Advisers Act Rules and Regulations.
Except as disclosed in the Registration Statement and Prospectus (or
any amendment or supplement to either of them), to the best of our
knowledge, no trustee of the Trust is an "interested person" (as
defined in the 0000 Xxx) of the Trust or an "affiliated person" (as
defined in the 0000 Xxx) of an Underwriter.
(xviii) There are no statutes or regulations that are required
to be described in the Prospectus that are not described as required.
A-2
(xix) All descriptions in the Registration Statement of
contracts and other documents to which the Trust is a party are
accurate in all material respects. To the best of our knowledge, there
are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred
to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xx) To the best of our knowledge, the Trust is not in
violation of its declaration of trust or by-laws and no default by the
Trust exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration
Statement or the Prospectus or filed or incorporated by reference as an
exhibit to the Registration Statement.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency (other than under the 1933 Act, the
1934 Act, the 1940 Act and the Rules and Regulations, which have been
obtained, or as may be required under the securities or blue sky laws
of the various states, as to which we need express no opinion) is
necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering,
issuance or sale of the Securities or the consummation of the
transactions contemplated by this Agreement.
(xxii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Trust with its
obligations under the Purchase Agreement do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xii) of the Purchase Agreement) under or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Trust pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the
Trust is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Trust is subject, nor will
such action result in any violation of the provisions of the charter or
by-laws of the Trust, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Trust or any of its properties, assets or
operations.
(xxiii) The Purchase Agreement, the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement and the Transfer 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. Assuming due authorization, execution and delivery by
the other parties thereto with respect to the Custodian Agreement and
the Transfer Agency Agreement, each of the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement and the Transfer 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) and an implied covenant of good faith
and fair dealing.
A-3
(B) With respect to the Advisers:
(i) Each Adviser has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) Each Adviser has full corporate 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 the Purchase Agreement.
(iii) Each Adviser 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, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not result in a material adverse
effect.
(iv) Each Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or
the Rules and Regulations from acting under the Management Agreement
for the Trust as contemplated by the Prospectus.
(v) The Purchase Agreement, the Management Agreement, the
Additional Compensation Agreement, and the Sub-Advisory Agreement have
been duly authorized, executed and delivered by the respective Adviser,
and the Management Agreement, the Additional Compensation Agreement and
the Sub-Advisory Agreement each constitutes a valid and binding
obligation of the 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).
(vi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Advisers are a party, or to which the property of the
Advisers is subject, before or brought by any court or governmental
agency or body, domestic or foreign, which might reasonably be expected
to result in any material adverse change in the condition, financial or
otherwise, in the earnings, business affairs or business prospects of
the Advisers, materially and adversely affect the properties or assets
of the Advisers or materially impair or adversely affect the ability 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 or the Prospectus.
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(viii) To the best of our knowledge, each Adviser is not in
violation of its certificate of incorporation, by-laws or other
organizational documents and no default by the Advisers exists in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(ix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under
the 1933 Act, the 1940 Act and the Rules and Regulations, which have
been
A-4
obtained, or as may be required under the securities or blue sky laws
of the various states, as to which we need express no opinion) is
necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement.
(x) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by
the Advisers with their obligations under the Purchase Agreement do not
and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the Purchase
Agreement) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Advisers
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument,
known to us, to which the Advisers is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Advisers is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse
effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Advisers, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to
us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Advisers or any of its
properties, assets or operations.
In addition, we have participated in the preparation of the
Registration Statement and the Prospectus and participated in discussions with
certain officers, trustees and employees of the Trust, representatives of
[Deloitte & Touche LLP], the independent accountants who examined the statement
of assets and liabilities of the Trust included or incorporated by reference in
the Registration Statement and the Prospectus, and you and your representatives
and we have reviewed certain Trust records and documents. While we have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the information
contained in the Registration Statement and the Prospectus, except to the extent
necessary to enable us to give the opinions with respect to the Trust in
paragraphs (A)(v), (xiv) and (xix), on the basis of such participation and
review, nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time such Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements, supporting schedules and
other financial data included therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits 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.
A-5
