PLACEMENT AGENT AGREEMENT
PLACEMENT AGENT AGREEMENT dated as of November __,
1999 between BCT Subsidiary Inc., a Maryland corporation (the "Fund") and BFM
Advisory, Inc., a Delaware corporation (the "Placement Agent").
W I T N E S S E T H:
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WHEREAS, the Fund has requested the Placement Agent to act as
the exclusive placement agent of the Fund for the private placement to The
BlackRock Broad Investment Grade 2009 Term Trust Inc. (the "Purchaser") of
up to 2,957,093 shares of Common Stock of the Fund (the "Shares").
WHEREAS, the Placement Agent has indicated its willingness to
act as the exclusive placement agent of the Fund in the private placement
of the Shares.
NOW, THEREFORE, in consideration of the premises, the parties
agree as follows:
1. Certain Definitions. For all purposes of this Agreement,
except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the Fund's Registration
Statement on Form N-2, dated November, 1999, as amended (the "Registration
Statement"). All other capitalized terms used herein shall have the
meanings specified herein.
2. Appointment as the Placement Agent. (a) The Fund appoints
the Placement Agent its exclusive placement agent for the private placement
of its Shares and acknowledges that the Placement Agent shall have the
exclusive right to assist the Fund in the placement of the Shares during
the term of this Agreement.
(b) In soliciting the Subscription Agreement for the
purchase of the Shares in accordance with clause (a) of this Section 2, the
Placement Agent shall act as agent for the Fund. The Placement Agent shall
make reasonable efforts to assist the Fund in obtaining performance by the
Purchaser. The Placement Agent shall have no liability to the Fund in the
event any such purchase is not consummated for any reason. The Placement
Agent shall not have any obligation to purchase, as principal, Shares under
any circumstances.
(c) The Fund and the Placement Agent agree that any
Shares the placement of which the Placement Agent arranges shall be placed
by the Placement Agent in reliance on the representations, warranties,
covenants and agreements of the Fund contained herein and on the terms and
conditions and in the manner provided herein.
(d) The Placement Agent shall be entitled to no
compensation from, or reimbursement of expenses by, the Fund in connection
with the performance by the Placement Agent of its duties hereunder.
3. Offers and Sales of the Shares. The offer and sale of the
Shares by the Fund is to be effected pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Act"), provided by Section 4(2) thereof, which exempts transactions by an
issuer not involving any public offering. Offers and sales of the Shares by
the Fund will be made in accordance with the general provisions of
Regulation D under the Act. The Placement Agent and the Fund hereby
establish the following procedures in connection with the offer and sale of
the Shares:
(a) The offer and sale of the Shares will be made only to
a purchaser which qualifies as an accredited investor (as defined in Rule
501 of Regulation D under the Act).
(b) The Shares will be offered only by approaching the
Purchaser on an individual basis. The Shares will not be offered or sold by
any means of general solicitation or general advertising.
(c) Each Share shall be subject to the restrictions on
transfer thereof described in the Subscription Agreement (defined below)
and shall be subject to restrictive legends as described therein.
(d) The Fund's Subscription Agreement, dated November __,
1999 (the "Subscription Agreement") will be made available to the Purchaser
of Shares from the Fund, together with any supplements to such Subscription
Agreement which may have been prepared which describes, among other things
the Fund and the Shares, material agreements of the Fund and risks and
special considerations. The Subscription Agreement will contain a statement
expressly offering an opportunity for the Purchaser to ask questions of,
and receive answers from, the Fund concerning the offering of the Shares
and to obtain additional relevant information which the Fund possesses or
can acquire without unreasonable effort or expense.
(e) The Fund agrees to cooperate with the Placement Agent
in the preparation of the Subscription Agreement and in amending it as from
time to time may be necessary in connection with the initial issuance and
sale of the Shares.
The Placement Agent shall not be liable or responsible to the
Fund for any losses, damages or liabilities suffered or incurred by the
Fund arising from or relating to any resale or transfer of any Shares.
4. Representations and Warranties. The Fund represents and
warrants to the Placement Agent that:
(a) The Fund (i) has been duly organized and is validly
existing as a Corporation in good standing under the laws of the State of
Maryland and (ii) has the requisite corporate power and authority to sell,
issue and deliver the Shares and to execute and deliver the various
agreements referenced in the Registration Statement and perform its
obligations under such agreements. When the Shares are issued, delivered
and paid for as described in the Registration Statement, the same will be
duly authorized, validly issued, fully paid and nonassessable.
(b) The Fund is not in violation of its charter or
by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement or lease to which the Fund is a party or by which
it may be bound, and the execution and delivery of this Agreement and those
agreements specifically referred to in the Registration Statement and the
consummation of the transactions herein and therein contemplated will not
conflict with, or constitute a breach of or default under, the charter or
by-laws of the Fund or any material contract, indenture, mortgage, loan
agreement or lease, to which the Fund is a party or by which it may be
bound, or any law, administrative regulation or court decree.
(c) This Agreement has been duly authorized, executed and
delivered by the Fund and constitutes the legal, valid and binding
obligation of the Fund enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting generally the enforcement of
creditors' rights or by general equitable principles.
(d) Assuming compliance with Section 5(b) hereof, no
consent, approval, authorization, order, registration or qualification of
or with any court or any regulatory authority or other governmental agency
or body (including the SEC) is required for the issuance, offer or sale of
the Shares in accordance with the terms of this Agreement or for the
consummation of the transaction contemplated by this Agreement.
(e) There are no legal or governmental proceedings
pending to which the Fund is a party or of which any property of the Fund
is the subject, other than legal or governmental proceedings which in each
case will not have a material adverse effect on the business, financial
condition, shareholders' equity or results of operations of the Fund; and
to the best of its knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(f) The offer, issuance, sale and delivery of the Shares
in accordance with the terms of this Agreement will constitute exempted
transactions under the Act pursuant to Section 4(2) thereof, and
registration of the Shares under the Act will not be required in connection
with any such offer, issuance, sale or delivery of the Shares.
(g) The Fund is registered with the SEC pursuant to
Section 8 of the Investment Company Act of 1940 as a closed-end,
non-diversified management investment company.
5. Covenants. (a) The Fund agrees that no future offer and sale
of Shares will be made if, as a result of the doctrine of "integration"
referred to in Rule 502 of Regulation D under the Act, Securities Act
Release No. 6389 (March 8, 1982), Securities Act Release Nos. 4434
(December 6, 1961), 4552 (November 6, 1962) and 4708 (July 9, 1964), and
various releases and "no action" letters issued or made available by the
SEC, such offer and sale would call into question the entitlement of the
Shares to the exemption from the registration requirements of the Act
provided by Section 4(2) thereof.
(b) The Placement Agent will at all times during the term
of this Agreement maintain its registration as a broker-dealer under the
Securities Exchange Act of 1934.
(c) The Placement Agent will endeavor, in cooperation
with the Fund, to qualify the Shares for offer and sale under the
applicable securities laws of such states and other jurisdictions of the
United States and other countries as the Fund and the Placement Agent shall
determine, and will maintain such qualifications in effect for as long as
may be required for the distribution of the Shares. The Fund and the
Placement Agent will file such statements and reports as may be required by
the laws of each jurisdiction in which the Shares have been qualified as
above provided.
6. Indemnification. (a) The Fund agrees to assume liability for
and to indemnify, protect, save and hold harmless the Placement Agent, each
individual, corporation, partnership, trust, association or other entity
("Person") controlling the Placement Agent, any affiliate of any such
Person or the Placement Agent and their respective directors, officers,
incorporators, shareholders, partners, servants, trustees, employees and
agents from and against any and all losses, liabilities, claims, damages,
penalties, causes of action, suits, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) or judgments of
whatever kind and nature, imposed upon, incurred by or asserted against
such indemnities, as incurred, which are based upon any untrue statement or
alleged untrue statement of a material fact in the Registration Statement,
or the omission or alleged omission therefrom of a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The Placement Agent agrees to assume liability for
and to indemnify, protect, save and hold harmless the Fund, each Person
controlling the Fund, any affiliate of any such Person or the Fund and
their respective directors, officers, incorporators, shareholders,
partners, servants, trustees, employees and agents to the same extent as
the foregoing indemnity from the Fund to the Placement Agent.
(c) If any action, suit or proceeding is brought
involving any person in respect of which indemnity may be sought pursuant
to Section 6(a) or 6(b) hereof, the indemnifying party will, if requested
in writing within a reasonable time to do so, and at its own expense,
resist and defend such action, suit or proceeding or cause the same to be
resisted and defended by counsel designated by the indemnifying party
(which counsel shall be satisfactory to such indemnified parties) and
regardless of whether the indemnifying party is a party to the same, pay
all reasonable costs and expenses of such defense as incurred (including,
without limitation, reasonable attorneys' fees and expenses). In lieu of
requesting the indemnifying party to so resist and defend such action, suit
or proceeding and upon notice to the indemnifying party, any indemnified
party may choose to defend, or participate in the defense of, any such
action, suit or proceeding, at the expense of the indemnifying party;
provided, that in no event shall the indemnifying party be liable for the
fees and expenses of more than one counsel (in addition to any local
counsel) (and, in the case of a conflict of interest, separate from its 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.
(d) The indemnity provided for in Section 6(a) hereof
will also extend to any supplemental material subsequently furnished to the
Placement Agent by the Fund and distributed to purchasers or prospective
purchasers during the term of this Agreement, unless the Fund instructs the
Placement Agent in writing not to distribute such material.
(e) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
this Section 6 is for any reason held unavailable (otherwise than in
accordance with the terms of this Section 6), the indemnifying party, on
the one hand, and any indemnified parties, on the other hand, sought to be
charged with any liability shall contribute to the aggregate costs of
satisfying such liability (i) in the proportion as is appropriate to
reflect the relative benefits received by the Fund and its shareholders on
the one hand and the Placement Agent on the other hand from the offering of
the Shares and the transactions and arrangements contemplated thereby or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Fund on the one hand and of the Placement Agent on the other
hand in connection with the statements or omissions that resulted in such
liability, as well as other relevant equitable considerations. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The obligations of the Fund under this Section 6 shall survive
any termination of this Agreement, in whole or in part.
7. Notices. Unless otherwise indicated, all notices required
under the terms and provisions hereof shall be in writing, either delivered
by hand, by mail (postage prepaid), or by telex, telecopier or telegram,
and any such notice shall be effective when received at the address
specified below.
If to the Fund:
BCT Subsidiary Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Placement Agent:
BFM Advisory, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 7 to the
other party hereto.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
9. Amendment and Termination; Successors; Counterparts. (a)
This Agreement shall become effective on the date first set forth above and
shall remain in effect for up to two years from such date and thereafter
from year to year provided such continuance is specifically approved at
least annually prior to each anniversary of such date by (a) Director
approval or by vote at a meeting of shareholders of the Fund of the lesser
of (i) 67 per cent of the Shares present or represented by proxy and (ii)
50 per cent of the outstanding Shares and (b) by the approval of the
Director who are not "interested persons" in the Fund (as defined in
Section 2(a) of the Investment Company Act of 1940).
(b) This Agreement may be terminated (a) by the Placement
Agent at any time without penalty by giving sixty (60) days' written notice
to the Fund which notice may be waived by the Fund; or (b) by the Fund at
any time without penalty upon sixty (60) days' written notice to the
Placement Agent (which notice may be waived by the Placement Agent).
(c) This Agreement shall be binding upon and inure
exclusively to the benefit of the parties hereto and their respective
successors and assigns and the indemnified parties referred to in Section 6
hereof. This Agreement may not be assigned by any party hereto absent the
prior written consent of the other party.
10. Captions. The captions in this Agreement are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
11. Effective Date. This Agreement shall terminate on December
31, 1999 unless extended by the Fund's Board of Directors.
12. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
BCT SUBSIDIARY INC.
By:__________________________
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
BFM ADVISORY, INC.
By:__________________________
Name:
Title:
