Auction Rate Municipal Preferred Shares of Beneficial Interest
BLACKROCK MUNICIPAL BOND TRUST
[ ] Shares, Series [ ]
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
June [ ], 2002
XXXXXXX XXXXX XXXXXX INC.
c/o XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
BlackRock Municipal Bond Trust, 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 Rate Municipal Preferred Shares
of Beneficial Interest, Series [ ] with a liquidation preference of $25,000 per
share (the "Shares"). The Shares will be authorized by, and subject to the terms
and conditions of, the Statement of Preferences of Municipal Auction Rate
Cumulative Preferred Shares of the Trust, dated as of [ ], 2002 (the
"Statement") and the Agreement and Declaration of Trust of the Trust dated as of
February 15, 2002 (the "Declaration"), in the forms filed as exhibits to the
Registration Statement referred to in Section 1 of this agreement, as the same
may be amended from time to time. The Trust, its investment adviser, BlackRock
Advisors, Inc. ("BAI") and its investment sub-advisor, BlackRock Financial
Management, Inc. ("BFM") (each, an "Advisor" and together, the "Advisors"), wish
to confirm as follows their agreement with Xxxxxxx Xxxxx Xxxxxx Inc. and
__________ (the "Underwriters"), in connection with the purchase of the Shares
by the Underwriters.
Collectively, the Investment Management Agreement dated April 19, 2002
between the Trust and BAI (the "Investment Management Agreement"), the
Sub-Investment Advisory Agreement dated April 19, 2002 among the Trust, BAI and
BFM (the "Sub-Advisory Agreement"), the Custodian Agreement dated April 19, 2002
between the Trust and State Street Bank and Trust Company, the Transfer Agent
and Service Agreement dated April 19, 2002 between the Trust and EquiServe Trust
Company, N.A. and the Auction Agent Agreement to be dated June [ ], 2002 between
the Trust and The Bank of New York are hereinafter referred to as the "Trust
Agreements." The Investment Management Agreement and the Sub-Advisory Agreement
are hereinafter referred to as the "Advisory Agreements." This Underwriting
Agreement is hereinafter referred to as the "Agreement."
For purposes of this Agreement, references to a post-effective
amendment to the Registration Statement (defined below) shall only be deemed to
refer to those amendments
which are filed with the Commission before the later of (i) one year from the
date of this Agreement or (ii) the date on which a prospectus relating to the
Shares is no longer required by the 1933 Act (defined below) to be delivered in
connection with any sales by any Underwriter or dealer.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Trust has prepared and
filed in accordance with the provisions of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated under the 1933 Act (the "1933 Act
Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations"
and, together with the 1933 Act Rules and Regulations, the "Rules and
Regulations"), a registration statement on Form N-2, as amended by Pre-Effective
Amendments Nos. 1 [and 2] (File Nos. 333-87550 and 811-21036) (the "registration
statement"), including a prospectus relating to the Shares. The Trust also has
filed a notification of registration of the Trust as an investment company under
the 1940 Act on Form N-8A (the "1940 Act Notification"). The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as amended at the time it becomes
effective under the 1933 Act or, if the registration statement became effective
under the 1933 Act prior to the execution of this Agreement, as amended or
supplemented at the time it became effective, prior to the execution of this
Agreement, and includes any information deemed to be included by Rule 430A under
the 1933 Act Rules and Regulations. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the registration
statement will be filed under the 1933 Act and must be declared effective before
the offering of the Shares may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as amended by said
post-effective amendment. If the Trust has filed an abbreviated registration
statement to register an additional amount of Shares pursuant to Rule 462(b)
under the 1933 Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall include such Rule 462
Registration Statement. The term "Prospectus" as used in this Agreement means
the prospectus and statement of additional information in the forms included in
the Registration Statement or, if the prospectus and statement of additional
information included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act Rules and Regulations and such information is
included in a prospectus and statement of additional information filed with the
Commission pursuant to Rule 497(h) under the 1933 Act, the term "Prospectus" as
used in this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement as supplemented
by the addition of the information contained in the prospectus filed with the
Commission pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in
this Agreement means the prospectus and statement of additional information
subject to completion in the forms included in the registration statement at the
time of filing of Pre-Effective Amendment No. 1 to the registration statement
with the Commission on June [ ], 2002, and as such prospectus and statement of
additional information shall have been amended from time to time prior to the
date of the Prospectus. The terms "Registration Statement," "Prospectus" and
"Prepricing Prospectus" shall also include any financial statements and other
information incorporated by reference therein.
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The Trust has furnished you with copies of such registration statement,
each amendment to such registration statement filed with the Commission and each
Prepricing Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. The Trust hereby agrees, subject to
all the terms and conditions set forth herein, to issue and sell to the
Underwriters and, upon the basis of the representations, warranties and
agreements of the Trust and the Advisors herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees severally and not
jointly to purchase from the Trust, at a purchase price of $24,750 per share,
the number of Shares set forth opposite the name of such Underwriter in Schedule
I hereto.
3. TERMS OF PUBLIC OFFERING. The Trust and the Advisors have been
advised by you that the Underwriters propose to make a public offering of their
respective Shares as soon after the Registration Statement and this Agreement
have become effective as in your judgment is advisable and initially to offer
the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Shares shall be made at the office of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or
through the facilities of the Depository Trust Company or another mutually
agreeable facility, at 9:30 A.M., New York City time, on June [ ], 2002 (the
"Closing Date"). The place of closing for the Shares and the Closing Date may be
varied by agreement between you and the Trust.
Certificates for the Shares purchased hereunder shall be registered in
such names and in such denominations as you shall request prior to 9:30 A.M.,
New York City time, on the second business day preceding the Closing Date. Such
certificates shall be made available to you in New York City for inspection and
packaging not later than 9:30 A.M., New York City time, on the business day next
preceding the Closing Date. The certificates evidencing the Shares purchased
hereunder shall be delivered to you on the Closing Date, through the facilities
of The Depository Trust Company, against payment of the purchase price therefor
in immediately available funds.
5. AGREEMENTS OF THE TRUST AND THE ADVISORS. The Trust and the
Advisors, jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective under the 1933 Act before the offering of the Shares
may commence, the Trust will use its best efforts to cause the Registration
Statement or such post-effective amendment to become effective under the 1933
Act and will advise you promptly and, if requested by you, will confirm such
advice in writing when the Registration Statement or such post-effective
amendment has become effective.
(b) Except as otherwise stated in (iii) below, for a period of five
years from the date hereof, the Trust (in the case of (i), (ii), (iii)(A) and
(iv) below) and the Advisors (in the case of (iii)(B) and (iv) below) will
advise you promptly and, if requested by you, will confirm such advice in
writing: (i) of any request made by the Commission for amendment of or a
supplement to the Registration Statement, any Prepricing Prospectus or the
Prospectus (or any
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amendment or supplement to any of the foregoing) or for additional information,
(ii) of the issuance by the Commission, the National Association of Securities
Dealers, Inc. (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 Prepricing 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 Shares for offering or sale
in any jurisdiction, or the initiation of any proceeding for any such purposes,
(iii) of receipt by (A) the Trust, any affiliate of the Trust or any
representative or attorney of the Trust of any other communication materially
adverse to the Trust from the Commission or (B) 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 communication materially 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 Prepricing Prospectus,
any sales material (as herein defined) (or any amendment or supplement to any of
the foregoing) or this Agreement or any of the Trust Agreements and (iv) within
the period of time referred to in paragraph (f) 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 Prepricing 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 Prepricing 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 Act 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 Registration Statement, the Prospectus, or
any Prepricing 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 (as herein defined) (or any amendment or supplement to any of
the foregoing) or suspending the qualification of the Shares 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 suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any sales material (as
herein defined) (or any amendment or supplement to any of the foregoing) or
suspending the qualification of the Shares for offering or sale in any
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jurisdiction, the Advisors will use their reasonable best efforts to obtain the
withdrawal of such order at the earliest possible time.
(c) The Trust will furnish to you, without charge, three signed copies
of the Registration Statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits thereto,
and will also furnish to you, without charge, such number of conformed copies of
the Registration Statement as originally filed and of each amendment thereto,
but without exhibits, as you may reasonably request.
(d) The Trust will not file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus, or any sales material (as
herein defined), of which you shall not previously have been advised or to which
you shall reasonably object after being so advised. So long as, in the opinion
of counsel for the Underwriters, a Prospectus is required by the 1933 Act to be
delivered in connection with sales by any Underwriter or any dealer, the
Advisors will deliver a copy of any information, documents or reports filed by
the Trust pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act"), to you prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Trust
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Trust consents to the use,
in accordance with the provisions of the 1933 Act and with the state securities
or blue sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Trust.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the 1933 Act to be
delivered in connection with sales by any Underwriter or any dealer, the Trust
will promptly deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Trust consents to the use of the Prospectus (and
of any amendment or supplement thereto) in accordance with the provisions of the
1933 Act and with the state securities or blue sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the 1933 Act to be delivered in connection with sales by any Underwriter or any
dealer. If during such period of time any event shall occur that is required to
be set forth in the Registration Statement or the Prospectus (as then amended or
supplemented) or is required to be set forth therein in order to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, or if it is necessary to supplement
or amend the Registration Statement or the Prospectus to comply with the 1933
Act, the 1940 Act, or the Rules and Regulations, the Trust will forthwith notify
you of such event, prepare and, subject to the provisions of paragraph (d)
above, promptly file with the Commission an appropriate supplement or amendment
thereto, and will promptly furnish to the Underwriters and dealers, without
charge, a reasonable number of copies thereof. In the event that the Trust and
you agree that the Registration Statement or the Prospectus should be amended or
supplemented, the Trust (if it is required by law to do so) will promptly issue
a press release
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announcing or disclosing the matters to be covered by the proposed amendment or
supplement or will otherwise appropriately disseminate the required information.
(g) The Trust will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or blue sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Trust be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Trust will make generally available to its security holders an
earnings statement, which need not be audited, covering a twelve-month period
ending not later than 17 months after the effective date of the Registration
Statement as soon as practicable after the end of such period, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 of the 1933 Act Rules and Regulations.
(i) During the period of three years hereafter, the Advisors will
furnish to you (i) as soon as available, a copy of each proxy statement, annual
and semi-annual report of the Trust mailed to shareholders or filed with the
Commission or furnished to the New York Stock Exchange (the "NYSE") other than
reports on Form N-SAR, and (ii) from time to time such other information
concerning the Trust as you may reasonably request.
(j) If this Agreement shall be terminated by the Trust or the Advisors
after execution pursuant to any provisions hereof or if this Agreement shall be
terminated by the Underwriters because of (i) any failure or refusal on the part
of the Trust or the Advisors to comply with any material term or fulfill any
material condition of this Agreement required to be complied with or fulfilled
by them, or (ii) the non-occurrence of any other condition contained in Section
9 of this Agreement, the Trust and the Advisors, jointly and severally, agree to
reimburse the Underwriters for all out-of-pocket expenses (including reasonable
fees and expenses of counsel for the Underwriters) reasonably incurred by the
Underwriters in connection herewith.
(k) The Trust will apply the net proceeds from the sale of the Shares
in accordance with the description set forth in the Prospectus and in such a
manner as to comply with the investment objectives, policies and restrictions of
the Trust as described in the Prospectus, as the same may be amended from time
to time.
(l) The Trust will timely file the requisite copies of the Prospectus
with the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules
and Regulations, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and
will advise you of the time and manner of such filing.
(m) 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
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the Shares or any securities convertible into or exercisable or exchangeable for
its preferred shares of beneficial interest of the same series as the Shares, or
grant any options or warrants to purchase its preferred shares of beneficial
interest of the same series as the Shares, for a period of 180 days after the
date of the Prospectus, without the prior written consent of Xxxxxxx Xxxxx
Xxxxxx Inc.
(n) The Trust intends to direct the investment of the proceeds from the
offering of the Shares so as to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code") to qualify as a
regulated investment company under the Code.
(o) The Trust and the Advisors will use their reasonable best efforts
to perform all of the agreements required of them and discharge all conditions
of theirs to closing as set forth in this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE ADVISORS. The
Trust and the Advisors, jointly and severally, represent and warrant to each
Underwriter that:
(a) The Commission has not issued any order preventing or suspending
the use of the Prospectus.
(b) The registration statement in the form in which it became or
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 497 of the 1933
Act Rules and Regulations and the 1940 Act Notification when originally filed
with the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and Regulations, as
applicable, and the Prospectus and the registration statement (and any
supplement or amendment to either of them) did not or will not at any such times
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
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading, except that this representation and warranty does not
apply to statements in or omissions from the registration statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Trust in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the shares of beneficial interest of the Trust outstanding as
of the date hereof have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights; the Shares
have been duly authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable (except as provided in the last sentence of
Section 3.8 of the Agreement and Declaration of Trust) and free of any
preemptive or similar rights that entitle or will entitle any person to acquire
any Shares upon the issuance thereof by the Trust, and will conform in all
material respects to the description thereof in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them); and the
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capitalization of the Trust conforms in all material respects to the description
thereof in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them).
(d) The Trust is a business trust duly organized and validly existing
in good standing under the laws of the State of Delaware with full business
trust power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on the
condition (financial or other), general affairs, assets or results of operations
of the Trust; and the Trust has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Trust or the Advisors, threatened, against the Trust, or to
which the Trust or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) but are not described as required, and there are
no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus (and
any amendment or supplement to either of them) or to be filed as an exhibit to
the Registration Statement that are not described or filed as required by the
1933 Act, the 1940 Act or the Rules and Regulations.
(f) The Trust is not in violation of the Statement, the Declaration or
its by-laws (the "By-Laws"), or other organizational documents or of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Trust or of any decree of the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
governmental agency, body or official having jurisdiction over the Trust, or in
default in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to which the
Trust is a party or by which it or any of its properties may be bound, except
where such violation or default does not have a material adverse effect on the
condition (financial or other), general affairs, assets or results of operations
of the Trust.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Trust Agreements by the
Trust, nor the consummation by the Trust of the transactions contemplated hereby
or thereby (A) requires any consent, approval, authorization or other order of,
or registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official having jurisdiction over the Trust (except such as may have been
obtained prior to the date hereof and such as may be required for compliance
with the state securities or blue sky laws of various jurisdictions which have
been or will be effected in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the Statement, the Declaration, the By-Laws or other organizational documents of
the Trust or (B) conflicts or will conflict with or constitutes or will
constitute a material breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Trust is a party
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or by which it or any of its properties may be bound, or materially violates or
will materially violate any material statute, law, regulation or judgment,
injunction, order or decree applicable to the Trust or any of its properties, or
will result in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Trust pursuant to the terms of
any agreement or instrument to which it is a party or by which it may be bound
or to which any of its property or assets is subject. As of the date hereof, the
Trust is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(h) The accountants, Deloitte & Touche LLP, who have certified or shall
certify the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement to
either of them) are independent public accountants as required by the 1933 Act,
the 1940 Act and the Rules and Regulations.
(i) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them), present
fairly the financial position of the Trust on the basis stated or incorporated
by reference in the Registration Statement at the respective dates or for the
respective periods to which they apply; and such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein.
(j) The execution and delivery of, and the performance by the Trust of
its obligations under, this Agreement and the Trust Agreements have been duly
and validly authorized by the Trust, and this Agreement and the Trust Agreements
have been duly executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties thereto, each
constitutes the valid and legally binding agreement of the Trust, enforceable
against the Trust in accordance with its terms, except as rights to indemnity
and contribution hereunder and thereunder may be limited by federal or state
securities laws, and subject to the qualification that the enforceability of the
Trust's obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general equitable
principles whether enforcement is considered in a proceeding in equity or at
law.
(k) Except as disclosed in or contemplated by the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement to
either of them), the Trust has not incurred any material liability or material
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Trust, and there has not
been any change in the capitalization, or material increase in the short-term
debt or long-term debt, of the Trust, or any material adverse change, or any
development involving a prospective material adverse change, in the condition
(financial or other), general affairs, assets or results of operations of the
Trust, whether or not arising in the ordinary course of business (other than as
a result of changes in market conditions generally or the market for municipal
securities generally).
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(l) The Trust has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares, will
not distribute any offering material in connection with the offering and sale of
the Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials permitted by the 1933 Act, the 1940 Act or the
Rules and Regulations.
(m) The Trust has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("permits") as are necessary to own
its properties and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto), subject to such
qualifications as may be set forth in the Prospectus.
(n) The Trust maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(o) No holder of any security of the Trust has any right to require
registration of any security of the Trust because of the filing of the
registration statement or consummation of the transactions contemplated by this
Agreement.
(p) The Trust, subject to the registration statement having been
declared effective and the filing of the Prospectus under Rule 497 under the
1933 Act Rules and Regulations, has taken all required action under the 1933
Act, the 1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(q) The Trust is registered under the 1940 Act and the 1940 Act Rules
and Regulations as a diversified, closed-end management investment company and
the 1940 Act Notification has been duly filed with the Commission and, at the
time of filing thereof and any amendment or supplement thereto, conformed in all
material respects with all applicable provisions of the 1940 Act and the 1940
Act Rules and Regulations; no order of suspension or revocation of such
registration under the 1940 Act and the 1940 Act Rules and Regulations has been
issued or proceedings therefor initiated or, to the knowledge of the Trust or
either of the Advisors, threatened by the Commission. The provisions of the
Statement, the Declaration and By-Laws, and the investment policies and
restrictions described in the Registration Statement and the Prospectus, comply
in all material respects with the requirements of the 1940 Act and the 1940 Act
Rules and Regulations.
(r) All advertising, sales literature or other promotional material
(including "prospectus wrappers") intended for public distribution and
authorized in writing by or prepared by the Trust for use in connection with the
offering and sale of the Shares (collectively, "sales material") complied and
comply in all material respects with the applicable requirements of the 1933
Act, the 1933 Act Rules and Regulations and the rules and interpretations of the
NASD and
10
no such sales material, when read together with the Prospectus, contained or
contains an untrue statement of a material fact or omitted or omits 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.
(s) Each of the Trust Agreements complies in all material respects with
all applicable provisions of the 1933 Act, the 1940 Act, the Rules and
Regulations, 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").
(t) The Trust's common shares are duly listed on the NYSE.
(u) The Shares have been, or prior to the Closing Date will be,
assigned a rating of `Aaa' by Xxxxx'x Investors Service, Inc. ("Moody's") and
"AAA" by Standard & Poor's Rating Services ("S&P").
7. REPRESENTATIONS AND WARRANTIES OF THE ADVISORS. BAI and BFM, jointly
and severally, represent and warrant to each Underwriter that:
(a) Each of the Advisors is a corporation duly incorporated and validly
existing in good standing 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 Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or to qualify does not have a material adverse effect on the
ability of such Advisor to perform its obligations under this Agreement and the
Advisory Agreements to which it is a party.
(b) Each of the Advisors 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 1940 Act Rules
and Regulations from acting under the Advisory Agreements to which it is a party
for the Trust as contemplated by the Prospectus (or any amendment or supplement
thereto). There does not exist any proceeding which should reasonably be
expected to have a material adverse affect on the registration of either Advisor
with the Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of each Advisor, threatened against such Advisor, that are required to
be described in the Registration Statement or the Prospectus (or any amendment
or supplement to either of them) but are not described as required or that
should reasonably be expected to have a material adverse effect on the ability
of such Advisor to perform its obligations under this Agreement and the Advisory
Agreements to which it is a party.
(d) Neither the execution, delivery or performance of this Agreement or
the Advisory Agreements by each Advisor which is a party thereto, nor the
consummation by each Advisor of the transactions contemplated hereby or thereby
(A) requires either Advisor to obtain any consent, approval, authorization or
other order of, or registration or filing with, the
11
Commission, the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court, regulatory body, administrative agency or
other governmental body, agency or official having jurisdiction over either
Advisor or conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, the certificate of incorporation or By-Laws, or
other organizational documents, of such Advisor or (B) conflicts or will
conflict with or constitutes or will constitute a material breach of or a
default under, any material agreement, indenture, lease or other instrument to
which either Advisor is a party or by which either Advisor or any of its
properties may be bound, or materially violates or will materially violate any
material statute, law, regulation or judgment, injunction, order or decree
applicable to either Advisor or any of its properties or will result in the
creation or imposition of any material lien, charge or encumbrance upon any
property or assets of either Advisor pursuant to the terms of any 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 either Advisor is subject, except in any case under
clause (A) or (B) as should not reasonably be expected to have a material
adverse effect on the ability of each Advisor to perform its obligations under
this Agreement and the Advisory Agreements to which it is a party. Neither
Advisor is subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.
(e) The execution and delivery of, and the performance by each Advisor
of its respective obligations under, this Agreement and the Advisory Agreements
to which it is a party have been duly and validly authorized by such Advisor,
and this Agreement and the Advisory Agreements to which it is a party have been
duly executed and delivered by such Advisor and, assuming due authorization,
execution and delivery by the other parties thereto, each constitutes the valid
and legally binding agreement of such Advisor, enforceable against such Advisor
in accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws, and subject to the
qualification that the enforceability of the Trust's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles whether enforcement is
considered in a proceeding in equity or at law.
(f) Each Advisor has the financial resources necessary for the
performance of its services and obligations as contemplated in the Prospectus
(or any amendment or supplement thereto) and under this Agreement and the
Advisory Agreements to which it is a party.
(g) The description of each Advisor 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 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 (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) Each of the Advisory Agreements complies in all material respects
with all applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
12
(i) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
there has not occurred any event which should reasonably be expected to have a
material adverse effect on the ability of either Advisor to perform its
obligations under this Agreement and the Advisory Agreements to which it is a
party.
(j) Each of the Advisors has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), except to
the extent that the failure to so have should not reasonably be expected to have
a material adverse effect on the ability of such Advisor to perform its
obligations under the Advisory Agreements to which it is a party; each of the
Advisors has fulfilled and performed all its material obligations with respect
to such permits and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or results in any other
material impairment of the rights of either Advisor under any such permit,
except where the revocation, termination or impairment of such Advisor's rights
under such permits should not reasonably be expected to have a material adverse
effect on the ability of such Advisor to perform its obligations under the
Advisory Agreements to which it is a party.
(k) Except as stated in this Agreement and in the Prospectus (and in
any amendment or supplement thereto), neither Advisor has taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Trust to facilitate the sale or resale of the
Shares, and neither Advisor is aware of any such action taken or to be taken by
any affiliates of the Advisors who are not underwriters or dealers participating
in the offering of the Shares.
(l) Each Prepricing Prospectus complied when filed with the Commission
in all material respects with the provisions of the 1933 Act, the 1940 Act and
the Rules and Regulations. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus or the Prospectus.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Trust and the Advisors,
jointly and severally, agree to indemnify and hold harmless you and each other
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 from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation), joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with information relating to any Underwriter
furnished in writing to the Trust by or on behalf of any
13
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the 1933
Act and the 1933 Act Rules and Regulations, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such Prepricing Prospectus was corrected in the Prospectus, provided that the
Trust has delivered the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Trust or the
Advisors may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Trust or the Advisors, such Underwriter or
such controlling person shall promptly notify the Trust or the Advisors, and the
Trust or the Advisors may assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the Trust or the Advisor have agreed in
writing to pay such fees and expenses, (ii) the Trust and the Advisors have
failed to assume the defense and employ counsel, or (iii) the named parties to
any such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Trust or the Advisors
and such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and the Trust or the
Advisors by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the Trust and the Advisors shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Trust and the Advisors
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by you, and that all such fees and expenses shall be reimbursed as they
are incurred. The Trust and the Advisors shall not be liable for any settlement
of any such action, suit or proceeding effected without their written consent,
but if settled with such written consent, or if there be a final judgment for
the plaintiff in any such action, suit or proceeding, the Trust and the Advisors
agree to indemnify and hold harmless any Underwriter, to the extent provided in
the preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Trust and the Advisors, their trustees and directors, any
officers who sign the
14
Registration Statement, and any person who controls the Trust or the Advisors
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
to the same extent as the foregoing indemnity from the Trust and the Advisors to
each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through you
expressly for use in the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against the Trust or the Advisors, any of
their trustees and directors, any such officer, or any such controlling person
based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Trust and the
Advisors by paragraph (b) above (except that if the Trust or the Advisors shall
have assumed the defense thereof such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the Trust and the Advisors, their trustees and
directors, any such officer, and any such controlling person shall have the
rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Advisors on the one hand (treated jointly for this purpose as one
person) and the Underwriters on the other hand from the offering of the Shares,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Trust and the Advisors on the one hand (treated jointly for this purpose as
one person) and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Trust and the Advisors on the one hand (treated jointly
for this purpose as one person) and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Trust bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The Trust and the
Advisors agree that as between the Trust, BAI and BFM (and solely for the
purpose of allocating among such parties the total amount to be contributed by
each of them to one another and without prejudice to the right of the
Underwriters to receive contributions from the Trust and the Advisors under this
Section 8(d) on a joint and several basis) the relative benefits received by the
Trust, on the one hand, and BAI and BFM on the other hand, shall be deemed to be
in the same proportion that the total net proceeds from the offering (before
deducting expenses) received by the Trust bear to the present value of the
future revenue stream to be generated by the advisory fee to be paid by the
Trust to BAI pursuant to the Investment Advisory Agreement. The relative fault
of the Trust and the Advisors on the one hand (treated jointly for this purpose
as one person) and the Underwriters on the other hand shall be determined by
reference to, among other things, whether
15
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Trust and the Advisors on the one hand (treated jointly for this purpose as one
person) or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Trust, the Advisors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by a pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which such
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of 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. The
Underwriters' obligations to contribute pursuant to this Section 8 are several
in proportion to the respective number of Shares set forth opposite their names
in Schedule I hereto (or such numbers of Shares increased as set forth in
Section 11 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Trust and the Advisors set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Trust, the Advisors, their trustees, directors
or officers, or any person controlling the Trust or the Advisors, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Trust, the Advisors, their trustees,
directors or officers, or any person controlling the Trust or the Advisor, shall
be entitled to the benefits of the indemnity, contribution, and reimbursement
agreements contained in this Section 8.
16
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 497 and 430A under the 1933 Act and the 1933
Act Rules and Regulations shall have been timely made; no stop order suspending
the effectiveness of the Registration Statement or order pursuant to Section
8(e) of the 1940 Act shall have been issued and no proceeding for those purposes
shall have been instituted or, to the knowledge of the Trust, the Advisors or
any Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with to your reasonable
satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change or any development involving a prospective change
in or affecting the condition (financial or other), business, general affairs,
properties, net assets, or results of operations of the Trust or the Advisors
not contemplated by the Prospectus, which in your opinion, would materially
adversely affect the market for the Shares, or (ii) any event or development
relating to or involving the Trust or the Advisors or any officer, trustee or
director of the Trust or the Advisors which makes any statement made in the
Prospectus untrue or which, in the opinion of the Trust and its counsel or the
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the 1933 Act,
the 1940 Act or the Rules and Regulations or any other law to be stated therein
or necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
your opinion, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of Xxxxxxx,
Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Trust, dated the Closing Date
and addressed to you, in the form attached hereto as Exhibit A.
(d) You shall have received on the Closing Date an opinion of Xxxxxx
Xxxxxxxx, Esq., counsel for the Advisors, dated the Closing Date and addressed
to you, in form and substance satisfactory to you and to the effect that:
(i) Based on certificates of the Secretary of State of the State
of Delaware, each of the Advisors is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware,
with all necessary corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them). Based on certificates of the applicable secretaries of state, each
Advisor is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so
17
register and qualify does not have a material adverse effect on the ability
of such Advisor to perform its obligations under this Agreement and the
Advisory Agreements to which it is a party;
(ii) Each of the Advisors 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 1940 Act Rules and Regulations from acting under the Advisory
Agreements to which it is a party for the Trust as contemplated by the
Prospectus (or any amendment or supplement thereto); and, to the best
knowledge of such counsel after reasonable inquiry, there does not exist
any proceeding which should reasonably be expected to adversely affect the
registration of either Advisor with the Commission;
(iii) Each of the Advisors has corporate power and authority to
enter into this Agreement and the Advisory Agreements to which it is a
party, and this Agreement and the Advisory Agreements to which each Advisor
is a party have been duly authorized, executed and delivered by each
Advisor which is a party thereto and each Advisory Agreement is a valid and
legally binding agreement of such Advisor, enforceable against such Advisor
in accordance with its terms except as rights to indemnity and contribution
hereunder and thereunder may be limited by Federal or state securities laws
or principles of public policy and subject to the qualification that the
enforceability of the Advisors' obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium,
and other laws relating to or affecting creditors' rights generally and by
general equitable principles whether enforcement is considered in a
proceeding in equity or at law;
(iv) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreements by each Advisor which is a party
thereto, nor the consummation by each Advisor of the transactions
contemplated hereby and thereby (A) conflicts or will conflict with, or
constitutes or will constitute a breach of or default under, the
certificate of incorporation or by-laws, or other organizational documents,
of such Advisor or (B) conflicts or will conflict with, or constitutes or
will constitute a material breach of or material default under any material
agreement, indenture, lease or other instrument to which either Advisor is
a party, or will result in the creation or imposition of any material lien,
charge or encumbrance upon any material property or material assets of
either Advisor, nor will any such action result in any material violation
of any law of the State of New York, the Delaware General Corporation Law,
the 1940 Act, the Advisers Act or any regulation or judgment, injunction,
order or decree applicable to either Advisor or any of its properties;
(v) No consent, approval, authorization or other order of, or
registration or filing with, the Commission, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency,
or official of the State of New York is required on the part of either
Advisor for the execution, delivery and performance of this Agreement or
the Advisory Agreements to which it is a party, or the consummation by such
Advisor of the transactions contemplated hereby and thereby;
18
(vi) To the best knowledge of such counsel after reasonable
inquiry, there are no legal or governmental proceedings pending or
threatened against either Advisor or to which either Advisor or any of its
properties is subject, which are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them) but are not described as required;
(vii) Each of the Advisors has all material permits, licenses,
franchises and authorizations of governmental or regulatory authorities as
are necessary to own its properties and to conduct its business in the
manner described in the Prospectus (and any amendment or supplement
thereto), and to perform its obligations under the Advisory Agreements to
which it is a party; and
(viii) Such counsel shall also state that the description of each
of the Advisors contained in the Registration Statement (and any amendment
or supplement thereto) 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 contained therein not misleading and that
the description of the Advisors contained in the Prospectus or any
amendment or supplement thereto, as of its issue date and as of the Closing
Date 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 contained therein, in the light of the circumstances under
which they were made, not misleading.
(e) Reserved.
(f) You shall have received on the Closing Date an opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing Date and
addressed to you, with respect to such matters as you may reasonably request.
(g) You shall have received letters addressed to you and dated the date
hereof and the Closing Date from Deloitte & Touche LLP, independent certified
public accountants, substantially in the forms heretofore approved by you.
(h) (i) No order suspending the effectiveness of the registration
statement or the Registration Statement or prohibiting or suspending the use of
the Prospectus (or any amendment or supplement thereto) or any Prepricing
Prospectus shall have been issued and no proceedings for such purpose or for the
purpose of commencing an enforcement action against the Trust, the Advisors or
with respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement (other than enforcement
actions against any Underwriter with respect to the transactions contemplated by
the Prospectus (or any amendment or supplement thereto) and this Agreement) may
be pending before or, to the knowledge of the Trust, the Advisors or any
Underwriter or in the reasonable view of counsel to the Underwriters, shall be
threatened by the Commission at or prior to the Closing Date and that any
request for additional information on the part of the Commission (to be included
in the Registration Statement, the Prospectus or otherwise) be complied with to
the reasonable satisfaction of the Underwriters; (ii) there shall not have been
any change in the capitalization of the Trust nor any material increase in the
short-term or long-term debt of the Trust (other than in the ordinary course of
business) from that set forth or contemplated in the Registration Statement
19
or the Prospectus (or any amendment or supplement thereto); (iii) there shall
not have been, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or any amendment or
supplement to either of them), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement to either
of them), any material adverse change (other than as a result of changes in
market conditions generally or the market for municipal securities generally) in
the condition (financial or other), general affairs, assets or results of
operations of the Trust; (iv) the Trust shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Trust, other than those reflected in or
contemplated by the Registration Statement or the Prospectus (or any amendment
or supplement to either of them); and (v) all the representations and warranties
of the Trust and the Advisors contained in this Agreement that are qualified by
a materiality standard shall be true and correct, and all representations and
warranties of the Trust and the Advisors contained in this Agreement that are
not so qualified shall be true and correct in all material respects, on and as
of the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate of the Trust and the
Advisor, dated the Closing Date and signed by the secretary and the chief
financial officer of each of the Trust and the Advisors (or such other officers
as are reasonably acceptable to you), to the effect set forth in this Section
9(h) and in Section 9(i) hereof.
(i) Neither the Trust nor either of the Advisors shall have failed at
or prior to the Closing Date to have performed or complied in all material
respects with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing Date.
(j) The Trust shall have delivered and you shall have received evidence
satisfactory to you that the Shares 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 Shares by Xxxxx'x or by S&P.
(k) As of the Closing Date and assuming the receipt of the net proceeds
from the sale of the Shares, the 1940 Act Preferred Shares Asset Coverage and
the Preferred Shares Basic Maintenance Amount (each as defined in Appendix A to
the statement of additional information contained in the Registration Statement)
each will be met.
(l) The Trust and the Advisors shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested in order to verify the satisfaction of the conditions set
forth in this Section 9, including, without limitation, a certificate of the
secretary or assistant secretary of the Trust and the Advisors, an incumbency
certificate of the Trust and each Advisor and a certificate of the auction
agent.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
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10. EXPENSES. The Trust agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the 1940 Act
Notification, the Prospectus and each amendment or supplement to any of them
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, any sales material and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
(iv) the reproduction and delivery of this Agreement, any dealer agreements and
all other agreements or documents reproduced and delivered in connection with
the offering of the Shares; (v) the registration or qualification of the Shares
for offer and sale under the securities or blue sky laws of the several states
as provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel relating to the preparation, printing or reproduction,
and delivery of the preliminary and supplemental blue sky memoranda and such
registration and qualification); (vi) fees paid to Xxxxx'x and/or S&P; (vii) the
transportation and other expenses incurred by or on behalf of Trust
representatives in connection with presentations to prospective purchasers of
the Shares; and (viii) the fees and expenses of the Trust's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Trust.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when the registration
statement or such post-effective amendment has become effective. Until such time
as this Agreement shall have become effective, it may be terminated by the
Trust, by notifying you, or by you, by notifying the Trust.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Shares set forth
opposite its name in Schedule I hereto bears to the aggregate number of Shares
set forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they are obligated to purchase on the Closing Date and the aggregate
number of Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date and arrangements satisfactory to you and the
Trust for the purchase of such Shares by one or more non-defaulting Underwriters
or other party or parties approved by you and the Trust are not made within 36
21
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter, the Trust or the Advisors. In any such
case which does not result in termination of this Agreement, either you or the
Trust shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Trust,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Trust or the Advisors, by notice to the Trust or the
Advisors, if prior to delivery of and payment for the Shares (i) trading in the
Trust's common shares shall have been suspended by the Commission or the New
York Stock Exchange or trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq
Stock Market shall have been suspended or limited or minimum prices shall have
been established on the New York Stock Exchange, (ii) a banking moratorium shall
have been declared by either federal or New York State authorities, or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war, or other calamity or
crisis, the effect of which on financial markets is such as to make it, in your
sole judgment, impracticable or inadvisable to proceed with the offering or
delivery of the Shares as contemplated by the Prospectus (exclusive of any
supplement thereto). Notice of such termination may be given to the Trust or
either Advisor by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the last paragraph on the cover page, and the statements in the first
paragraph and the table immediately thereafter, the third paragraph and the
sixth paragraph under the caption "Underwriting" in any Prepricing Prospectus
and in the Prospectus, constitute the only information furnished by or on behalf
of the Underwriters through you as such information is referred to in Sections
6(b) and 8 hereof.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11 and
12 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Trust or the Advisors, at the
office of BlackRock Advisors, Inc. at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxxxxxxxxx; or (ii) if to you, to Xxxxxxx Xxxxx
Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Trust, the Advisors, their trustees, directors and
officers, and the other
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controlling persons referred to in Section 8 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
Please confirm that the foregoing correctly sets forth the agreement
among the Trust, the Advisors and the several Underwriters.
Very truly yours,
BLACKROCK MUNICIPAL BOND TRUST
By:
------------------------------------------
BLACKROCK ADVISORS, INC.
By:
------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
By:
------------------------------------------
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Confirmed as of the date first above mentioned.
XXXXXXX XXXXX XXXXXX INC.
By: XXXXXXX XXXXX XXXXXX INC.
By:
--------------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Director
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SCHEDULE I
BLACKROCK MUNICIPAL BOND TRUST
NUMBER OF
UNDERWRITER SHARES
----------- ------
Xxxxxxx Xxxxx Xxxxxx Inc.
Total
EXHIBIT A
FORM OF OPINION OF XXXXXXX, ARPS, SLATE, XXXXXXX & XXXX LLP
