BlackRock Municipal Income Trust II
(a Delaware business trust)
Auction Market Preferred Shares ("AMPS") of Beneficial Interest
[ ] Shares ___ AMPS, Series [ ]
[ ] Shares ___ AMPS, Series [ ]
[ ] Shares ___ AMPS, Series [ ]
Liquidation Preference $25,000 per share
PURCHASE AGREEMENT
September [ ], 2002
Xxxxxxx Xxxxx & Co.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Prudential Securities
UBS Warburg
c/x Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
BlackRock Municipal Income Trust II, a Delaware business trust (the
"Trust"), proposes, upon the terms and conditions set forth herein, to issue and
sell an aggregate of [ ] shares of its Auction Market Preferred Shares of
Beneficial Interest, Series [ ], [ ] shares of its Auction Market Preferred
Shares of Beneficial Interest, Series [ ] and [ ] shares of its Auction Market
Preferred Shares of Beneficial Interest, Series [ ], each with a liquidation
preference of $25,000 per share (the "AMPS"). The AMPS will be authorized by,
and subject to the terms and conditions of, the Statement of Preferences of
Auction Market Preferred Shares of the Trust, dated as of [ ], 2002 (the
"Statement") and the Agreement and Declaration of Trust of the Trust, as amended
and restated, dated as of [ ], 2002 (the "Declaration"), in the forms filed as
exhibits to the Registration Statement referred to in the second following
paragraph of this Agreement, as the same may be amended from time to time. The
Trust, the Trust's investment adviser, BlackRock Advisors, Inc., a Delaware
corporation ("BAI"), and its investment sub-adviser, BlackRock Financial
Management, Inc., a Delaware corporation ("BFM") (each, an "Adviser" and
together, the "Advisers"), each confirms its agreement with Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") , Xxxxxxx
Xxxxx Xxxxxx Inc. ("Xxxxxxx Xxxxx Xxxxxx"), Prudential Securities, UBS Warburg
and each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Xxxxxxx Xxxxx and Xxxxxxx
Xxxxx Xxxxxx are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of the
respective number of AMPS set forth in said SCHEDULE A.
The Trust understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Trust has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-[ ] and No. 811-[ ])
covering the registration of the AMPS under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses, and a notification on Form N-8A of registration (the "1940 Act
Notification") of the Trust as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
of the Commission under the 1933 Act and the 1940 Act (the "Rules and
Regulations"). Promptly after execution and delivery of this Agreement, the
Trust will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the Rules and Regulations and paragraph
(c) or (h) of Rule 497 ("Rule 497") of the Rules and Regulations or (ii) if the
Trust has elected to rely upon Rule 434 ("Rule 434") of the Rules and
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 497. The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective, if
applicable, (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the 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 [ ], 2002 together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE TRUST AND THE ADVISERS. The Trust
and the Advisers jointly and severally represent and warrant to each Underwriter
as of the date hereof, and as of the Closing Time referred to in Section 2(c)
hereof and agree with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
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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, the Registration Statement, the Rule
462(b) Registration Statement, the notification of Form N-8A and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act, the 1940 Act and the Rules
and Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. If Rule 434 is used, the Trust will comply
with the requirements of Rule 434 and the Prospectus shall not be
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 497 under the 1933 Act, complied when so
filed in all material respects with the Rules and Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection with
the offering and sale of the AMPS, the Trust has complied or will comply
with the requirements of Rule 111 under the 1933 Act Regulations relating
to the payment of filing fees thereof.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
statement of assets and liabilities included in the Registration Statement
are independent public accountants as required by the 1933 Act and the
Rules and Regulations.
(iii) FINANCIAL STATEMENTS. The statement of assets and liabilities
included in the Registration Statement and the Prospectus, together with
the related notes, presents fairly the financial position of the Trust at
the date indicated; said statement has been prepared in conformity with
generally accepted accounting principles ("GAAP").
(iv) INCORPORATED DOCUMENTS. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the Rules and Regulations and, when read
together with the other information in the Prospectus, at the date the
Registration Statement became effective, at the date the Prospectus was
issued and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statement therein not
misleading.
(v) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A)
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there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Trust, whether or not arising in the ordinary course of business (other
than as a result of changes in market conditions) (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Trust,
other than those in the ordinary course of business, which are material
with respect to the Trust, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Trust on any class
of its capital stock except for dividends declared on Common Stock.
(vi) GOOD STANDING OF THE TRUST. The Trust has been duly organized
and is validly existing as a business trust in good standing under the laws
of the State of Delaware and has business trust power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Trust is duly qualified as a foreign business trust to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) NO SUBSIDIARIES. The Trust has no subsidiaries.
(viii) INVESTMENT COMPANY STATUS. The Trust is duly registered with
the Commission under the 1940 Act as a closed-end diversified management
investment company, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or
threatened by the Commission.
(ix) OFFICERS AND TRUSTEES. No person is serving or acting as an
officer, trustee or investment adviser of the Trust except in accordance
with the provisions of the 1940 Act and the Rules and Regulations and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the Advisers Act
(the "Advisers Act Rules and Regulations"). Except as disclosed in the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them), no trustee of the Trust is an "interested person" (as
defined in the 1940 Act) of the Trust or an "affiliated person" (as defined
in the 1940 Act) of any Underwriter.
(x) CAPITALIZATION. The authorized, issued and outstanding shares
of beneficial interest of the Trust is as set forth in the Prospectus as of
the date thereof under the caption "Capitalization." All issued and
outstanding shares of beneficial interest of the Trust have been duly
authorized and validly issued and are fully paid and non-assessable, except
as provided for in the Trust's declaration of trust, and have been offered
and sold or exchanged by the Trust in compliance with all applicable laws
(including, without limitation, federal and state securities laws); none of
the outstanding shares of beneficial interest of the Trust was issued in
violation of the preemptive or other similar rights of any securityholder
of the Trust.
(xi) AUTHORIZATION AND DESCRIPTION OF SHARES. The AMPS to be
purchased by the Underwriters from the Trust have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Trust pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable, except as provided for in the Trust's
declaration of trust. The AMPS in all material respects conform to all
statements relating thereto contained in the Prospectus and such
description in all material respects conforms to the rights set forth in
the instruments defining the same; no holder of the AMPS will be subject to
personal liability by reason of being such a holder; and the issuance of
the AMPS is not subject to the preemptive or other similar rights of any
securityholder of the Trust.
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(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 Material Adverse Effect; and the execution, delivery and performance
of this Agreement, the Management Agreement, the Sub-Advisory Agreement,
the Custodian Agreement, the Transfer Agent and Service Agreement and the
Auction Agency Agreement referred to in the Registration Statement (as used
herein, the "Management Agreement," the "Sub-Advisory Agreement", the
"Custodian Agreement," the "Transfer Agency Agreement," and the "Auction
Agency Agreement" respectively) and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the AMPS and the use of the proceeds from the sale of
the AMPS as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Trust with its obligations hereunder have
been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the declaration of trust or by-laws of the
Trust or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Trust or any of its
assets, properties or operations. As used herein, a "Repayment Event" means
any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Trust.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Trust or the Advisers, threatened, against or affecting the Trust,
which is required to be disclosed in the Registration Statement (other than
as disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Trust or
the consummation of the transactions contemplated in this Agreement or the
performance by the Trust of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Trust is a party or
of which any of its property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto by the 1933 Act, the 1940 Act
or by the Rules and Regulations which have not been so described and filed
as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Trust owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names
or other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by
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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
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 AMPS hereunder or the consummation of the transactions contemplated by
this Agreement, except such as have been already obtained or as may be
required under the 1933 Act, the 1940 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or state securities laws.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Trust possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to operate
its properties and to conduct the business as contemplated in the
Prospectus; the Trust is in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and the Trust has not received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xviii) ADVERTISEMENTS. Any advertising, sales literature or other
promotional material (including "prospectus wrappers", "broker kits," "road
show slides," "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 AMPS (collectively, "sales
material") does not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances under which they were
made, not misleading. Moreover, all sales material complied and will comply
in all material respects with the applicable requirements of the 1933 Act,
the 1940 Act, the Rules and Regulations and the rules and interpretations
of the National Association of Securities Dealers, Inc. ("NASD").
(xix) SUBCHAPTER M. The Trust intends to direct the investment of
the proceeds of the offering described in the Registration Statement in
such a manner as to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended ("Subchapter M of the Code" and
the "Code," respectively), and, as of the date of this Agreement, qualifies
as a regulated investment company under Subchapter M of the Code.
(xx) DISTRIBUTION OF OFFERING MATERIALS. The Trust has not
distributed and, prior to the later to occur of (A) the Closing Time and
(B) completion of the distribution of the AMPS, will not distribute any
offering material in connection with the offering and sale of the AMPS
other than the Registration Statement, a preliminary prospectus, the
Prospectus or other materials, if any, permitted by the 1933 Act or the
1940 Act or the Rules and Regulations.
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(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.
(xxiii) MATERIAL AGREEMENTS. This Agreement, the Management Agreement,
the Sub-Advisory Agreement, the Custodian Agreement, the Transfer Agency
Agreement and the Auction Agency Agreement have each been duly authorized
by all requisite action on the part of the Trust, executed and delivered by
the Trust, as of the dates noted therein and each complies with all
applicable provisions of the 1940 Act. Assuming due authorization,
execution and delivery by the other parties thereto with respect to the
Custodian Agreement, the Transfer Agency Agreement, and the Auction Agency
Agreement, each of the Management Agreement, the Sub-Advisory Agreement,
the Custodian Agreement, the Transfer Agency Agreement and the Auction
Agency Agreement constitutes a valid and binding agreement of the Trust,
enforceable in accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law).
(xxiv) REGISTRATION RIGHTS. There are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Trust under
the 1933 Act.
(xxv) AMEX LISTING. The Trust's common shares are duly listed on
the American Stock Exchange ("AMEX").
(xxvi) RATINGS. The AMPS have been, or prior to the Closing Date will
be, assigned a rating of `Aaa' by Xxxxx'x Investor Service, Inc.
("Moody's") and "AAA" by Standard & Poor's Rating Services ("S&P").
(b) REPRESENTATIONS AND WARRANTIES BY THE ADVISERS. The Advisers represent
and warrant to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof as follows:
(i) GOOD STANDING OF THE ADVISERS. Each of the Advisers has been
duly organized and is validly existing and in good standing as corporations
under the laws of the State of Delaware with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and each is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required.
(ii) INVESTMENT ADVISER STATUS. Each of Advisers is duly registered
and in good standing with the Commission as an investment adviser under the
Advisers Act, and is not prohibited by the Advisers Act or the 1940 Act, or
the rules and regulations under such acts, from
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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 and the Sub-Advisory
Agreement have each been duly authorized, executed and delivered by each
respective Adviser, and the Management Agreement and the Sub-Advisory
Agreement each constitute a valid and binding obligation of each respective
Adviser, enforceable in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and general equitable principles (whether considered in a proceeding in
equity or at law); and neither the execution and delivery of this
Agreement, the Management Agreement or the Sub-Advisory Agreement nor the
performance by either of the Advisers of its obligations hereunder or
thereunder will conflict with, or result in a breach of any of the terms
and provisions of, or constitute, with or without the giving of notice or
lapse of time or both, a default under, any agreement or instrument to
which either Adviser is a party or by which it is bound, the certificate of
incorporation, the by-laws or other organizational documents of each of the
Advisers, or to each Adviser's knowledge, by any law, order, decree, rule
or regulation applicable to it of any jurisdiction, court, federal or state
regulatory body, administrative agency or other governmental body, stock
exchange or securities association having jurisdiction over the Advisers or
their respective properties or operations; and no consent, approval,
authorization or order of any court or governmental authority or agency is
required for the consummation by the Advisers of the transactions
contemplated by this Agreement, the Management Agreement or the
Sub-Advisory Agreement, except as have been obtained or may be required
under the 1933 Act, the 1940 Act, the 1934 Act or state securities laws.
(vi) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred any
event which should reasonably be expected to have a material adverse effect
on the ability of either Adviser to perform its respective obligations
under this Agreement and the respective 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 1940 Act) or any partners, directors, officers or employees of the
foregoing, whether or not arising in the ordinary course of business, which
might reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, or earnings, business affairs or
business prospects of either of the Advisers, materially and adversely
affect the properties or assets of either of the Advisers or materially
impair or adversely affect the ability of either of the
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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 the Trust.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Trust or the Advisers delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Trust or the
Advisers, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) SHARES. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price per share set forth in SCHEDULE B, the number of Shares set forth in
SCHEDULE A opposite the name of such Underwriter, plus any additional number of
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) COMMISSION. The Trust agrees to pay to the Underwriters a commission
set forth in Schedule B as compensation to the Underwriters for their
performance under this Agreement.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the AMPS shall be made at the offices of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or through the
facilities of The Depository Trust Company ("DTC") or at such other place as
shall be agreed upon by the Representatives and the Trust, at 10:00 A.M.
(Eastern time) on the business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representatives
and the Trust (such time and date of payment and delivery being herein called
"Closing Time").
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representatives through DTC for the respective accounts of the Underwriters
of the AMPS to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the AMPS, if any, which it has
agreed to purchase.
(d) DENOMINATIONS; REGISTRATION. Certificates for AMPS shall be in such
denominations and registered in such names as the Representatives may request in
writing at least one full business day before the Closing Time. The certificates
for the AMPS will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time.
SECTION 3. Covenants.
(a) The Trust and the Advisers, jointly and severally, covenant with each
Underwriter as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Trust, subject to Section 3(a)(ii), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and, except as
otherwise stated in (C) below, for a period of three years from the date
9
hereof, the Trust (in the case of (A), (B), (C)(i) and (D) below) and the
Advisors (in the case of (C)(iii) below) will advise you promptly and will
confirm such advice in writing: (A) of any request made by the Commission
for amendment of or a supplement to the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement to
any of the foregoing) or for additional information, (B) of the issuance by
the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official of any
order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any preliminary
prospectus, or any sales material (as hereinafter defined), of any notice
pursuant to Section 8(e) of the 1940 Act, of the suspension of
qualification of the AMPS for offering or sale in any jurisdiction, or the
initiaiton of any proceeding for any such purposes, (C) of receipt by (i)
the Trust, any affiliate of the Trust or any representative or attorney of
the Trust of any other material communication adverse to the Trust from the
Commission or (ii) the Trust, the Advisors, any affiliate of the Trust or
the Advisors or any representative or attorney of the Trust or the Advisors
of any other material communication adverse to the Trust from the
Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official
relating to the Trust (if such communication relating to the Trust is
received by such person within three years after the date of this
Agreement), the Registration Statement, the 1940 Act Notification, the
Prospectus, any preliminary prospectus, any sales material (or any
amendment or supplement to any of the foregoing) or this Agreement or any
of the Trust Agreements and (D) within the period of time referred to in
paragraph (iv) below, of any material adverse change in the condition
(financial or other), general affairs, assets or results of operations of
the Trust or any event which should reasonably be expected to have a
material adverse effect on the ability of either Advisor to perform its
respective obligations under this Agreement and the Advisory Agreements to
which it is a party (in either case, other than as a result of changes in
market conditions generally or the market for municipal securities
generally) or of the happening of any other event which makes any statement
of a material fact made in the Registration Statement or the Prospectus, or
any preliminary prospectus (or any amendment or supplement to any of the
foregoing) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus, or any preliminary
prospectus (or any amendment or supplement to any of the foregoing) in
order to state a material fact required by the 1933 Act, the 1940 or the
Rules and Regulations to be stated therein or necessary in order to make
the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading or of the
necessity to amend or supplement the Registrations Statement, the
Prospectus, or any preliminary prospectus (or any amendment or supplement
to any of the foregoing) to comply with the 1933 Act, the 1940 Act, the
Rules and Regulations or any other law or order of any court or regulatory
body. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending the
use of the Prospectus or any sales material (or any amendment or supplement
to any of the foregoing) or suspending the qualification of the AMPS for
offering or sale in any jurisdiction, the Trust and the Advisors will use
their reasonable best efforts to obtain the withdrawal of such order at the
earliest possible time. If at any time the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or administrative
agency or any official shall issue any order prohibiting or suspending the
use of the Prospectus or any sales material (or any amendment or supplement
to any of the foregoing) or suspending the qualification of the AMPS for
offering or sale in any jurisdiction, the Advisors will use their
reasonable best efforts to obtain the withdrawal of such order at the
earliest possible time. The Trust will notify the Representatives
immediately, and, if requested by the Representatives, confirm the notice
in writing, (i) when any post-effective amendment to the Registration
10
Statement shall become effective, or any supplement to the Prospectus of
any amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the AMPS for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Trust will
promptly effect the filings necessary pursuant to Rule 497 and will take
such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 497 was received for filing by
the Commission and, in the event that it was not, it will promptly file
such prospectus. The Trust will make every reasonable effort to prevent the
issuance of any stop order, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 940 Act, and, if any such stop
order or order of suspension or revocation of registration is issued, to
obtain the lifting thereof at the earliest possible moment.
(ii) FILING OF AMENDMENTS. The Trust will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Trust has furnished
or will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(iv) DELIVERY OF PROSPECTUSES. The Trust has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriters reasonably requested, and the Trust hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Trust
will furnish to each Underwriter, without charge, during the period when in
the opinion of counsel for the Underwriter the Prospectus is required under
the 1933 Act to be delivered in connection with sales by any Underwriter or
dealer or the 1934 Act, such number of copies of the Prospectus (as amended
or supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(v) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time when
a prospectus is required by the 1933 Act to be delivered in connection with
sales of the AMPS, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Trust, to amend the Registration Statement or amend
or supplement the Prospectus in order that the Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
11
the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
the Prospectus in order to comply with the requirements of the 1933 Act or
the Rules and Regulations, the Trust will promptly prepare and file with
the Commission, subject to Section 3(a)(ii), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and
the Trust will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(vi) BLUE SKY QUALIFICATIONS. The Trust will use its best efforts, in
cooperation with the Underwriters, to qualify the AMPS for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representatives may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and
any Rule 462(b) Registration Statement; provided, however, that the Trust
shall not be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in 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 AMPS have been
so qualified, the Trust will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration Statement.
(vii) RULE 158. The Trust will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(viii) USE OF PROCEEDS. The Trust will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(ix) REPORTING REQUIREMENTS. The Trust, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1940 Act and the 1934 Act within the time periods required by the
1940 Act and the Rules and Regulations and the 1934 Act and the rules and
regulations of the Commission thereunder, respectively.
(x) SUBCHAPTER M. The Trust will comply with the requirements of
Subchapter M of the Code to qualify as a regulated investment company under
the Code.
(xi) NO MANIPULATION OF MARKET FOR SHARES. The Trust will not (a)
take, directly or indirectly, any action designed to cause or to result in,
or that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Trust to facilitate the
sale or resale of the AMPS, and (b) until the Closing Date, or the Date of
Delivery, if any, (i) sell, bid for or purchase the AMPS or pay any person
any compensation for soliciting purchases of the AMPS or (ii) pay or agree
to pay to any person any compensation for soliciting another to purchase
any other Shares of the Trust .
(xii) RULE 462(b) REGISTRATION STATEMENT. If the Trust elects to
rely upon Rule 462(b), the Trust shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the day following the date of this Agreement, and
the Trust shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the
1933 Act.
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(xiii) ACCOUNTANT'S CERTIFICATE. The Trust will furnish to the
Underwriters, on the date on which delivery is made to the Rating Agencies,
the report and the confirmation of the Independent Accountant (as defined
in the Statement) required to be delivered pursuant to paragraph 7(f) of
Part I of the Statement.
(b) Except as provided in this Agreement, the Trust will not sell, contract
to sell or otherwise dispose of any of its preferred shares of beneficial
interest of the same series as the AMPS or any securities convertible into or
exercisable or exchangeable for its preferred shares of beneficial interest of
the same series as the AMPS, or grant any options or warrants to purchase its
preferred shares of beneficial interest of the same series as the AMPS, for a
period of 180 days after the date of the Prospectus, without the prior written
consent of Xxxxxxx Xxxxx.
SECTION 4. Payment of Expenses.
(a) EXPENSES. The Trust will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the AMPS,
(iii) the preparation, issuance and delivery of the certificates for the AMPS to
the Underwriters, including any stock or other transfer taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the AMPS to the
Underwriters, (iv) the fees and disbursements of the Trust's counsel,
accountants and other advisors, (v) the qualification of the AMPS under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus,
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the AMPS, (ix) the filing fees incident to, and the reasonable
fees and disbursements of counsel to the Underwriters in connection with, the
review by the NASD of the terms of the sale of the AMPS, (x) the fees and
expenses incurred in connection with the listing of the AMPS on the AMEX and
(xi) the printing of any sales material.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Trust and the Advisers, jointly and severally, agree that they shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Trust and the Advisers
contained in Section 1 hereof or in certificates of any officer of the Trust or
the Advisers delivered pursuant to the provisions hereof, to the performance by
the Trust and the Advisers of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of
13
counsel to the Underwriters. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 497 (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Trust has elected to rely upon Rule 434, a Term Sheet shall have been filed with
the Commission in accordance with Rule 497.
(b) OPINION OF COUNSEL FOR TRUST AND THE ADVISERS. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Trust, and
Xxxxxx X. Xxxxxxxx, counsel for the Advisers, in form and substance satisfactory
to counsel for the Underwriters, together with signed or reproduced copies of
such letters for each of the other Underwriters 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
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (A) (i), (ii),
(iv), (v), (ix), (x) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Trust), inclusive, (xi)
(solely as to the information in the Prospectus under "Description of AMPS"),
(xiii) and the 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 Representatives. Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Trust and certificates of public officials.
(d) OFFICERS' CERTIFICATES. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, or business affairs of the Trust, whether or
not arising in the ordinary course of business, and the Representatives shall
have received a certificate of a duly authorized officer of the Trust and of the
Treasurer of the Trust and of the President or a Vice President or Managing
Director of each of the Advisers, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Sections 1(a) and (b) hereof are true and correct in all material
respects with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Trust and the Advisers, respectively, has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied in all material respects at
or prior to Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement, or order of suspension or revocation of registration
pursuant to Section 8(e) of the 1940 Act, has been issued and no proceedings for
any such purpose have been instituted or are pending or are contemplated by the
Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
14
(g) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(h) RATINGS. The Trust shall have delivered and you shall have received
evidence satisfactory to you that the AMPS are rated `Aaa' by Xxxxx'x and `AAA'
by S&P as of the Closing Date, and there shall not have been given any notice of
any intended or potential downgrading, or of any review for a potential
downgrading, in the rating accorded to the AMPS or any other securities issued
by the Trust, by Xxxxx'x or by S&P.
(i) ASSET COVERAGE. As of the Closing Date and assuming the receipt of the
net proceeds from the sale of the AMPS, the Investment Company Act Preferred
Shares Asset Coverage and the Preferred Shares Basic Maintenance Amount (each as
defined in the Statement) each will be met.
(j) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the AMPS as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Trust and the Advisers in connection with the organization and
registration of the Trust under the 1940 Act and the issuance and sale of the
AMPS as herein contemplated shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Trust at any
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 13 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Trust and the Advisers, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Trust; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating,
15
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Trust or the
Advisers by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF TRUST, ADVISERS, TRUSTEES, DIRECTORS AND OFFICERS.
Each Underwriter severally agrees to indemnify and hold harmless the Trust and
the Advisers, their respective trustees and directors, each of the Trust's
officers who signed the Registration Statement, and each person, if any, who
controls the Trust or the Advisers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Trust or the Advisers by
such Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) INDEMNIFICATION FOR MARKETING MATERIALS. In addition to the foregoing
indemnification, the Trust and the Advisers also, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 6(a), as limited by
the proviso set forth therein, with respect to any sales material.
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Trust and the Advisers. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party
16
from all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Trust and the Advisers on the one hand and the
Underwriters on the other hand from the offering of the AMPS pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Trust and the Advisers on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Trust and the Advisers on the one
hand and the Underwriters on the other hand in connection with the offering of
the AMPS pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the AMPS pursuant to
this Agreement (before deducting expenses) received by the Trust and the total
underwriting discount received by the Underwriters (whether from the Trust or
otherwise), in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the AMPS as set forth on such cover.
The relative fault of the Trust and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Trust or the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Trust, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the AMPS underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Trust and each director of the Advisers,
17
respectively, each officer of the Trust who signed the Registration Statement,
and each person, if any, who controls the Trust or the Advisers, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Trust and the Advisers, respectively. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of AMPS set forth opposite their
respective names in SCHEDULE A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Trust or the Advisers submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Trust or the Advisers, and shall survive delivery of the
AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The Representatives may terminate this Agreement,
by notice to the Trust, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus (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 Representatives,
impracticable or inadvisable to market the AMPS or to enforce contracts for the
sale of the AMPS, or (iii) if trading in the common shares of the Trust has been
suspended or materially limited by the Commission or the AMEX, or if trading
generally on the New York Stock Exchange or the AMEX or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the NASD
or any other governmental authority, or a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States, or (iv) if a banking moratorium has been declared by either Federal or
New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8 and 13 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the AMPS which it or they are obligated to purchase under
this Agreement (the "Defaulted Shares"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Shares in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Shares does not exceed 10% of the number of
Shares to be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
18
(b) if the number of Defaulted Shares exceeds 10% of the number of Shares
to be purchased on such date, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Trust shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, c/x Xxxxxxx Xxxxx & Co., North Tower, World Financial Center,
New York, New York 10080, attention of Equity Capital Markets; and notices to
the Trust or the Advisers shall be directed, as appropriate, to the office of
BlackRock Financial Management, Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxxxxxxxxx.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Trust, the Advisers and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Trust, the Advisers and their respective successors and the
controlling persons and officers, trustees and directors referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Trust, the
Advisers and their respective partners and successors, and said controlling
persons and officers, trustees and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Shares from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
19
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Trust and the Advisers in accordance with its terms.
Very truly yours,
BlackRock Municipal Income Trust II
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, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
PRUDENTIAL SECURITIES
UBS WARBURG
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:
----------------------------------
Authorized Signatory
For themselves and as
Representatives of the
other Underwriters named
in SCHEDULE A hereto.
20
SCHEDULE A
Number of
NAME OF UNDERWRITER AMPS
------------------- ---------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc. [ ]
Prudential Securities [ ]
UBS Warburg LLC [ ]
Total [ ]
===
Sch A-1
SCHEDULE B
BLACKROCK MUNICIPAL INCOME TRUST II
[ ] Auction Market Preferred Shares of Beneficial Interest
[ ] Shares __ AMPS, Series [ ]
[ ] Shares __ AMPS, Series [ ]
[ ] Shares __ AMPS, Series [ ]
Liquidation Preference $25,000 per share
1. The initial public offering price per share for the AMPS, determined as
provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $25,000.
3. The commission to be paid to the Underwriters for their performance
hereunder shall be $[ ] per share.
4. The initial dividend rate on the AMPS shall be [ ]% per annum for the
Series [ ], [ ]% per annum for the Series [ ] and [ ]% per annum for the Series
[ ].
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 created and is in good standing and has a
legal existence as a statutory business trust under the Delaware Business
Trust Act. The opinion set forth in this paragraph (i) with respect to the
good standing and legal existence of the Trust as a statutory business
trust under the Delaware Business Trust Act is based solely on a review of
the Delaware Good Standing Certificate.
(ii) The Trust has the necessary power and authority under the
Delaware Business Trust Act as a business trust to execute, deliver and
perform all of its obligations under the
Purchase Agreement and the
Transaction Agreements and the consummation by the Trust of the
transactions contemplated thereby have been duly authorized by all
requisite action on the part of the Trust under Delaware Business Trust
Act. Each of the
Purchase Agreement and the Transaction Agreements has been
duly executed and delivered by the Trust under the applicable Laws of the
State of New York and the Commonwealth of Massachusetts, as the case may
be, to the extent applicable.
(iii) Each of the Transaction Agreements constitutes the valid and
binding obligation of the Trust enforceable against the Trust in accordance
with its terms under the Applicable laws of the State of New York or the
Commonwealth of Massachusetts, as the case may be.
(iv) The execution and delivery by the Trust of the
Purchase
Agreement and each of the Transaction Agreements and the performance by the
Trust of its obligations under the
Purchase Agreement and each of the
Transaction Agreements, each in accordance with its terms, do not (i)
conflict with the Declaration or By-laws of the Trust, (ii) constitute a
violation of, or a default under, any Applicable Contract or (iii) cause
the creation of any security interest or lien upon any of the property of
the Trust pursuant to any Applicable Contract. We do not express any
opinion, however, as to whether the execution, delivery or performance by
the Trust of the
Purchase Agreement or the Transaction Agreements will
constitute a violation of, or a default under, any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of the Trust.
(v) Neither the execution, delivery or performance by the Trust
of its obligations under the
Purchase Agreement or the Transaction
Agreements nor the compliance by the Trust with the terms and provisions
thereof will contravene any provision of Applicable Law or the 1940 Act or
the rules and regulations of the Commission under the 1940 Act.
(vi) No Governmental Approval, which has not been obtained or taken
and is not in full force and effect, is required to authorize, or is
required in connection with, the execution, delivery or performance of the
Purchase Agreement or any of the Transaction Agreements by the Trust.
(vii) Neither the execution, delivery or performance by t he Trust
of its obligations under the
Purchase Agreement or the Transaction
Agreements nor compliance by the Trust with the terms and provisions
thereof will contravene any Applicable Order.
A-1
(viii) The Trust is registered with the Commission pursuant to
Section 8 of the 1940 Act as a diversified, closed-end management
investment company; and the Declaration and By-Laws comply in all material
respects with the 1940 Act Rules and Regulations;
(ix) As if the date of the Prospectus, the Trust has an authorized,
issued and outstanding capitalization as set forth in the Prospectus
(without giving effect to the issuance and sale of the AMPS to you pursuant
to the
Purchase Agreement); all of the outstanding Common Shares have been
duly authorized and validly issued, and are fully paid and non-assessable
(except as provided in the last sentence of Section 3.8 of the Declaration)
undivided beneficial ownership interests in the assets of the Trust; the
AMPS have been duly authorized by all necessary action of the Trust under
the Delaware Business Trust Act and, when issued and delivered to and paid
for by the Underwriters pursuant to the Purchase Agreement, will be validly
issued, fully paid and non-assessable (except as provided in the last
sentence of Section 3.8 of the Declaration) undivided beneficial ownership
interests in the assets of the Trust.
(x) No holders of outstanding Common Shares are entitled as such
to any preemptive or other rights to subscribe for any AMPS under any
Applicable Contract, under the Declaration or By-Laws or under the Delaware
Business Trust Act.
(xi) The statements set forth under the headings "Description of
AMPS," "The Auction" and the Description of Common Shares" in the
Prospectus, insofar as such statements purport to summarize certain
provisions of the 1940 Act, the Delaware Business Trust Act, the AMPS, the
Common Shares or the Declaration, fairly summarize such provisions in all
material respects; and the statements contained in the Prospectus under the
heading "Tax Matters - Federal Income Tax Matters" (in the Prospectus) and
"Tax Matters" (in the Statement of Additional Information) to such extent
that such statements constitute matters of law or legal conclusions provide
a fair summary of such law or conclusions, which statements are based on
the current United States tax laws and our understanding of the Trust's
proposed operations as disclosed in the Prospectus.
(xii) No legal or governmental proceedings are pending to which the
Trust is a party that are required to be described in the Registration
Statement or the Prospectus and are not so described therein, and no
contract or other document is required to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required. In rendering
the opinion set forth in this paragraph 12, we have relied solely on the
Officer's Certificate; we have made no other inquires or investigations or
any search of the public docket records of any court, governmental agency
or bode or administrative agency.
(xiii) The filing of the Prospectus pursuant to Rule 497(h) under
the 1933 Act Rules and Regulations has been made in the manner and within
the time period required by Rule 497(h) of the rules and regulations of the
Commission under the 1933 Act.
(xiv) The Registration Statement, the Prospectus and the 1940 Act
Notification (in each case, other than the financial statements and other
financial and/or statistical information contained therein or incorporated
therein by reference and other than any exhibits, schedules or appendices
included or incorporated by the reference therein, as to which we express
no opinion) comply as to form in all material respects with the applicable
requirements of the 1933 Act, the 1940 Act, the 1933 Act Rules and
Regulations and the rules and regulations of the Commission under the 1940
Act ("the 940 Act Rules and Regulations"). Subject to the opinion set forth
above in paragraph 11, we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, and the Prospectus.
A-2
(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 and the
Sub-Advisory Agreement have been duly authorized, executed and delivered by
the respective Adviser, and the Management 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 obtained, or as
may be required under the securities or blue sky laws of the various
states, as to
A-3
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-4
