Exhibit (h)
BlackRock Strategic Bond Trust
[ ] Shares
Common Shares
($.001 Par Value)
FORM OF UNDERWRITING AGREEMENT
[ ], 2002
FORM OF UNDERWRITING AGREEMENT
[ ], 2002
UBS Warburg LLC,
as Managing Underwriter
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
BlackRock Strategic Bond Trust, a Delaware business trust (the
"Trust"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters") an aggregate of [ ] common shares (the
"Firm Shares") of beneficial interest $0.001 par value (the "Common Shares"), of
the Trust. In addition, solely for the purpose of covering over-allotments, the
Trust proposes to grant to the Underwriters the option to purchase from the
Trust up to an additional [ ] Common Shares (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "Shares." The Shares are described in the Prospectus which is
referred to below.
The Trust has filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations thereunder (collectively called the
"Act"), and with the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder (collectively called the
"Investment Company Act"), a registration statement on Form N-2 (File Nos. 333-
[ ] and 811-[ ], including a prospectus and a statement of additional
information, relating to the Shares. The Trust has furnished to you, for use by
the Underwriters and by dealers, copies of one or more preliminary prospectuses
(including a preliminary statement of additional information) (each thereof,
including such preliminary statement of additional information, being herein
called a "Preliminary Prospectus") relating to the Shares. Except where the
context otherwise requires, the registration statement, as amended when it
becomes effective (the "Effective Date"), including all documents filed as a
part thereof, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 497 under the Act and
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act is herein called the "Registration
Statement," and the prospectus (including the statement of additional
information), in the form filed by the Trust with the Commission pursuant to
Rule 497 under the Act or, if no such filing is required, the form of final
prospectus (including the form of final statement of additional information)
included in the Registration Statement at the time it became effective, is
herein called the "Prospectus". Any registration statement filed pursuant to
Rule 462(b) of the Act is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. In addition, the Trust has filed
a Notification of Registration on Form N-8A (the "Notification") pursuant to
Section 8 of the Investment Company Act.
BlackRock Advisors, Inc. ("BAI") acts as the Trust's investment adviser
pursuant to an Investment Management Agreement by and between the Trust and BAI,
dated as of [ ], 2002 (the "Management Agreement"). BlackRock
Financial Management, Inc. ("BFM") acts as the Trust's investment sub-adviser
pursuant to a Sub-Investment Advisory Agreement by and between BFM and BAI, as
accepted and agreed to by the Trust, dated as of [ ], 2002 (the "Sub-
Advisory Agreement"). BAI and BFM are each an "Adviser", and together, the
"Advisers". State Street Bank and Trust Company acts as the custodian (the
"Custodian") of the Trust's cash and portfolio assets pursuant to a Custodian
Agreement, dated as of [ ], 2002 (the "Custodian Agreement"). EquiServe
Trust Company acts as the Trust's transfer agent, registrar, shareholder
servicing agent and dividend disbursing agent with respect to the common shares
of the Trust (the "Transfer Agent") pursuant to a Transfer Agent and Service
Agreement, dated as of [ ], 2002 (the "Transfer Agency Agreement").
The Trust, the Advisers and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Trust agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Trust the
aggregate number of Firm Shares set forth opposite the name of such Underwriter
in Schedule A attached hereto in each case at a purchase price of $[ ] per
Share. The Trust is advised by you that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as soon after
the effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth
in the Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Trust hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Trust, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Trust for
the Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time, and from time to time, on or before the forty-fifth
day following the date hereof, by written notice to the Trust. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the Additional Time of
Purchase); PROVIDED, HOWEVER, that the Additional Time of Purchase shall not be
earlier than the Time of Purchase (as defined below) nor earlier than the second
business day1 after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2 PAYMENT AND DELIVERY. Payment of the purchase price for the
Firm Shares shall be made to the Trust by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on [ ], 2002 (unless another time shall be agreed to by you and
the Trust or unless postponed in accordance with the provisions of Section 8
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the "Time of Purchase" or the "Closing Date".
Certificates for the Firm Shares shall be delivered to you in definitive form in
such names and in such denominations as you shall specify on the second business
day preceding the Time of Purchase. For the purpose of expediting the checking
of the certificates for the Firm Shares by you, the Trust agrees to make such
certificates available to you for such purpose at least one full business day
preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall
be made at the Additional Time of Purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the Additional Time of Purchase. For the purpose of expediting the
checking of the certificates for the Additional Shares by you, the Trust agrees
to make such certificates available to you for such purpose at least one full
business day preceding the Additional Time of Purchase.
-------------------
1 As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
-2-
3. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE ADVISERS.
(a) The Trust and the Advisers jointly and severally represent
and warrant to each of the Underwriters as of the date hereof and as of
the Closing Date and each Additional Time of Purchase, if any, referred
to in Section 2 hereof, and agree with each Underwriter, as follows:
(i) Each of the Registration Statement and any Rule
462(b) Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration
Statement has been issued under the Act, or order of
suspension or revocation of registration pursuant to Section
8(e) of the Investment Company Act, and no proceedings for any
such purpose have been instituted or are pending or, to the
knowledge of the Trust or the Advisers, are contemplated by
the Commission, and any request on the part of the Commission
for additional information has been complied with.
At the respective times the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective
amendments thereto became effective and at any Closing Date,
the Registration Statement, the Rule 462(b) Registration
Statement, the Notification and any amendments and supplements
thereto complied and will comply in all material respects with
the requirements of the Act and the Investment Company Act and
did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at any Closing Date,
included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. If Rule 434 of the Act is used, the Trust will
comply with the requirements of Rule 434 and the Prospectus
shall not be "materially different", as such term is used in
Rule 434, from the prospectus included in the Registration
Statement at the time it became effective.
Each preliminary prospectus and the prospectus filed as
part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 497
under the Act, complied when so filed in all material respects
with the Rules and Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to its Electronic Data Gathering Analysis
and Retrieval System ("XXXXX"), except to the extent permitted
by Regulation S-T.
If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the Shares, the Trust
has complied or will comply with the requirements of Rule 111
under the Act relating to the payment of filing fees thereof.
(ii) The accountants who certified the statement of assets
and liabilities included in the Registration Statement are
independent public accountants as required by the Act.
(iii) The statement of assets and liabilities included in
the Registration Statement and the Prospectus, together with
the related notes, presents fairly the financial position of
the Trust at the date indicated; said statement has been
prepared in conformity with generally accepted accounting
principles ("GAAP").
-3-
(iv) To the extent estimated or projected, such estimates
or projections set forth in the Prospectus in the Fee Table
are reasonably believed to be attainable and reasonably based.
(v) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Trust, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Trust, other
than those in the ordinary course of business, which are
material with respect to the Trust, and (C) there has been no
dividend or distribution of any kind declared, paid or made by
the Trust on any class of its capital stock other than
dividends made in the ordinary course of business prior to the
Additional Time of Purchase.
(vi) The Trust has been duly organized and is validly
existing as a business trust in good standing under the laws
of the State of Delaware and has business trust power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement;
and the Trust is duly qualified as a foreign business trust to
transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse
Effect.
(vii) The Trust has no subsidiaries.
(viii) The Trust is duly registered with the Commission
under the Investment Company Act as a closed-end diversified
management investment company, and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or threatened by the Commission.
(ix) No person is serving or acting as an officer,
trustee or investment adviser of the Trust except in
accordance with the provisions of the Investment Company Act
and the Investment Advisers Act of 1940, as amended, and the
rules and regulations thereunder, (the "Advisers Act"). Except
as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), no trustee
of the Trust is an "interested person" (as defined in the
Investment Company Act) of the Trust or an "affiliated person"
(as defined in the Investment Company Act) of any Underwriter.
(x) The authorized, issued and outstanding common
shares of beneficial interest of the Trust is as set forth in
the Prospectus as of the date thereof under the caption
"Description of Shares." All issued and outstanding common
shares of beneficial interest of the Trust have been duly
authorized and validly issued and are fully paid and
non-assessable, except as provided for in the Trust's
declaration of trust, and have been offered and sold or
exchanged by the Trust in compliance with all applicable laws
(including, without limitation, federal and state securities
laws); none of the outstanding common shares of beneficial
interest of the Trust was issued in violation of the
preemptive or other similar rights of any securityholder of
the Trust.
(xi) The Shares to be purchased by the Underwriters
from the Trust have been duly authorized for issuance and sale
to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Trust pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable, except as
provided for in the Trust's declaration of trust. The Shares
conform in all material respects
-4-
to all statements relating thereto contained in the Prospectus
and such description conforms in all material respects to the
rights set forth in the instruments defining the same; no
holder of the Shares will be subject to personal liability by
reason of being such a holder; and the issuance of the Shares
is not subject to the preemptive or other similar rights of
any securityholder of the Trust.
(xii) The Trust is not in violation of its declaration
of trust or by-laws, or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound,
or to which any of the property or assets of the Trust is
subject (collectively, "Agreements and Instruments") except
for such violations or defaults that would not result in a
Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement and the
Transfer Agency Agreement and the consummation of the
transactions contemplated herein and in the Registration
Statement (including the issuance and sale of the Shares and
the use of the proceeds from the sale of the Shares as
described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Trust with its obligations
hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets
of the Trust pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation
of the provisions of the declaration of trust or by-laws of
the Trust or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Trust or any of its assets, properties
or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of
such indebtedness by the Trust.
(xiii) There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Trust or the Advisers, threatened,
against or affecting the Trust, which is required to be
disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties
or assets of the Trust or the consummation of the transactions
contemplated in this Agreement or the performance by the Trust
of its obligations hereunder. The aggregate of all pending
legal or governmental proceedings to which the Trust is a
party or of which any of its property or assets is the subject
which are not described in the Registration Statement,
including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a
Material Adverse Effect.
(xiv) There are no contracts or documents which are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto by the Act or
the Investment Company Act which have not been so described
and filed as required.
(xv) The Trust owns or possesses, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property
-5-
(collectively, "Intellectual Property") necessary to carry on
the business now operated by the Trust, and the Trust has not
received any notice or is not otherwise aware of any
infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Trust
therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect; provided that the Trust's right to
use the name "BlackRock" is limited as set forth in Section 16
of the Management Agreement.
(xvi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or
required for the performance by the Trust of its obligations
hereunder, in connection with the offering, issuance or sale
of the Shares hereunder or the consummation of the
transactions contemplated by this Agreement, except such as
have been already obtained or as may be required under the
Act, the Investment Company Act, the Securities Exchange Act
of 1934, as amended (the "1934 Act"), or state securities
laws.
(xvii) The Trust possesses such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies
necessary to operate its properties and to conduct the
business as contemplated in the Prospectus; the Trust is in
compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a
Material Adverse Effect; and the Trust has not received any
notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material
Adverse Effect.
(xviii) Any advertising, sales literature or other
promotional material (including "prospectus wrappers", "broker
kits," "road show slides" and "road show scripts") authorized
in writing by or prepared by the Trust or the Advisers used in
connection with the public offering of the Shares
(collectively, "sales material") does not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Moreover, all sales
material complied and will comply in all material respects
with the applicable requirements of the Act, the Investment
Company Act and the rules and interpretations of the National
Association of Securities Dealers, Inc. ("NASD").
(xix) The Trust intends to direct the investment of the
proceeds of the offering described in the Registration
Statement in such a manner as to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as
amended ("Subchapter M of the Code" and the "Code,"
respectively), and intends to qualify as a regulated
investment company under Subchapter M of the Code.
(xx) This Agreement, the Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement and the
Transfer Agency Agreement have each been duly authorized by
all requisite action on the part of the Trust, executed and
delivered by the Trust, as of the dates noted therein, and
each complies with all applicable provisions of the Investment
Company Act. Assuming due authorization, execution and
delivery by the other parties thereto with respect to the
Custodian Agreement and the Transfer Agency Agreement, each of
the Management Agreement, the Sub-Advisory Agreement, the
Custodian Agreement
-6-
and the Transfer Agency Agreement constitutes a valid and
binding agreement of the Trust, enforceable in accordance with
its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law).
(xxi) There are no persons with registration rights or
other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered
by the Trust under the Act.
(xxii) The Shares have been duly authorized for listing,
upon notice of issuance, on the New York Stock Exchange
("NYSE") and the Trust's registration statement on Form 8-A
under the 1934 Act has become effective.
(b) The Advisers represent and warrant to each Underwriter
as of the date hereof and as of the Closing Date referred to in Section 2 hereof
as follows:
(i) Each of the Advisers has been duly organized and is
validly existing and in good standing as corporations under
the laws of the State of Delaware with full corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and each
is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required.
(ii) Each of Advisers is duly registered and in good
standing with the Commission as an investment adviser under
the Advisers Act, and is not prohibited by the Advisers Act or
the Investment Company Act, or the rules and regulations under
such acts, from acting under the Management Agreement and the
Sub-Advisory Agreement for the Trust as contemplated by the
Prospectus.
(iii) The description of each Adviser in the Registration
Statement and the Prospectus (and any amendment or supplement
to either of them) complied and comply in all material
respects with the provisions of the Act, the Investment
Company Act and the Advisers Act and is true and correct and
does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not
misleading.
(iv) Each of the Advisers has the financial resources
available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this
Agreement and under the respective Management Agreement and
the Sub-Advisory Agreement to which it is a party.
(v) This Agreement, the Management Agreement, the
Sub-Advisory Agreement and the Shareholder Servicing
Agreement, by and between UBS Warburg LLC and BAI (the
"Shareholder Servicing Agreement"), have each been duly
authorized, executed and delivered by each respective Adviser,
and the Management Agreement, the Sub-Advisory Agreement and
the Shareholder Servicing Agreement each constitute a valid
and binding obligation of each respective Adviser, enforceable
in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law); and
neither the execution and delivery of this Agreement, the
Management Agreement, the Sub-Advisory Agreement or the
-7-
Shareholder Servicing Agreement nor the performance by either
of the Advisers of its obligations hereunder or thereunder
will conflict with, or result in a breach of any of the terms
and provisions of, or constitute, with or without the giving
of notice or lapse of time or both, a default under, any
agreement or instrument to which either Adviser is a party or
by which it is bound, the certificate of incorporation, the
by-laws or other organizational documents of each of the
Advisers, or to each Adviser's knowledge, by any law, order,
decree, rule or regulation applicable to it of any
jurisdiction, court, federal or state regulatory body,
administrative agency or other governmental body, stock
exchange or securities association having jurisdiction over
the Advisers or their respective properties or operations; and
no consent, approval, authorization or order of any court or
governmental authority or agency is required for the
consummation by the Advisers of the transactions contemplated
by this Agreement, the Management Agreement, the Sub-Advisory
Agreement or the Shareholder Servicing Agreement, except as
have been obtained or may be required under the Act, the
Investment Company Act, the 1934 Act or state securities laws.
The representations and warranties made by the Advisers in
this paragraph in regards to the Shareholder Servicing
Agreement are made only as of the Closing Date.
(vi) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, there has not occurred any
event which should reasonably be expected to have a material
adverse effect on the ability of either Adviser to perform its
respective obligations under this Agreement and the respective
Management Agreement and Sub-Advisory Agreement to which it is
a party.
(vii) There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the
knowledge of the Advisers, threatened against or affecting
either of the Advisers or any "affiliated person" of either of
the Advisers (as such term is defined in the Investment
Company Act) or any partners, directors, officers or employees
of the foregoing, whether or not arising in the ordinary
course of business, which might reasonably be expected to
result in any material adverse change in the condition,
financial or otherwise, or earnings, business affairs or
business prospects of either of the Advisers, materially and
adversely affect the properties or assets of either of the
Advisers or materially impair or adversely affect the ability
of either of the Advisers to function as an investment adviser
or perform its obligations under the Management Agreement or
the Sub-Advisory Agreement, or which is required to be
disclosed in the Registration Statement and the Prospectus.
(viii) Each Adviser is not in violation of its certificate
of incorporation, by-laws or other organizational documents or
in default under any agreement, indenture or instrument except
for such violations or defaults that would not result in a
Material Adverse Effect on the respective Adviser or the
Trust.
(c) Any certificate signed by any officer of the Trust
or the Advisers delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the Trust
or the Advisers, as the case may be, to each Underwriter as to the
matters covered thereby.
4. CERTAIN COVENANTS OF THE TRUST AND THE ADVISERS
(a) The Trust and the Advisers, jointly and severally,
covenant with each Underwriter as follows:
(i) The Trust, subject to Section 4(a)(ii), will comply
with the requirements of Rule 430A or Rule 434, as applicable,
and will notify UBS Warburg LLC (the "Representative")
immediately, and confirm the notice in writing or by sending
any relevant
-8-
copies of the following documents to the Representative, (i)
when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such
purposes. The Trust will promptly effect the filings necessary
pursuant to Rule 497 of the Act and will take such steps as it
deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 497 was received
for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Trust will
make every reasonable effort to prevent the issuance of any
stop order, or order of suspension or revocation of
registration pursuant to Section 8(e) of the Investment
Company Act, and, if any such stop order or order of
suspension or revocation of registration is issued, to obtain
the lifting thereof at the earliest possible moment.
(ii) The Trust will give the Representative notice
of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule
462(b)) or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time
it became effective or to the Prospectus, will furnish the
Representative with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the
case may be, and will not file or use any such document to
which the Representative or counsel for the Underwriters shall
object.
(iii) The Trust has furnished or will deliver to the
Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein)
and signed copies of all consents and certificates of experts,
and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(iv) The Trust has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Trust hereby
consents to the use of such copies for purposes permitted by
the Act. The Trust will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to
be delivered under the Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(v) If at any time when a prospectus is required by the
Act to be delivered in connection with sales of the Shares,
any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the
Underwriters or for the Trust, to amend the Registration
Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the
light of the
-9-
circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with
the requirements of the Act, the Trust will promptly prepare
and file with the Commission, subject to Section 3(a)(ii),
such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and
the Trust will furnish to the Underwriters such number of
copies of such amendment or supplement as the Underwriters may
reasonably request.
(vi) The Trust will use its best efforts, in cooperation
with the Underwriters, to qualify the Shares for offering and
sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Representative
may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the
Trust shall not be obligated to file any general consent to
service of process or to qualify as a foreign business trust
or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the
Shares have been so qualified, the Trust will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration
Statement.
(vii) The Trust will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally
available to its security holders as soon as practicable an
earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a)
of the Act.
(viii) The Trust will use the net proceeds received by it
from the sale of the Shares in the manner specified in the
Prospectus under "Use of Proceeds".
(ix) The Trust will use its reasonable best efforts to
effect the listing of the Shares on the NYSE, subject to
notice of issuance, concurrently with the effectiveness of the
Registration Statement.
(x) During a period of 180 days from the date of the
Prospectus, the Trust will not, without the prior written
consent of the Representative, (A) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise
transfer or dispose of Shares or any securities convertible
into or exercisable or exchangeable for Shares or file any
registration statement under the Act with respect to any of
the foregoing or (B) enter into any swap or any other
agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of
ownership of the Shares, whether any such swap or transaction
described in clause (A) or (B) above is to be settled by
delivery of Shares or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (1) the
Shares to be sold hereunder or (2) Shares issued pursuant to
any dividend reinvestment plan.
(xi) The Trust, during the period when the Prospectus is
required to be delivered under the Act or the 1934 Act, will
file all documents required to be filed with the Commission
pursuant to the Investment Company Act and the 1934 Act within
the time periods required by the Investment Company Act,
respectively.
-10-
(xii) The Trust will comply with the requirements of
Subchapter M of the Code to qualify as a regulated investment
company under the Code.
(xiii) The Trust will not (a) take, directly or
indirectly, any action designed to cause or to result in, or
that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of
the Trust to facilitate the sale or resale of the Shares, and
(b) until the Closing Date (i) sell, bid for or purchase the
Shares or pay any person any compensation for soliciting
purchases of the Shares or (ii) pay or agree to pay to any
person any compensation for soliciting another to purchase any
other securities of the Trust .
(xiv) If the Trust elects to rely upon Rule 462(b), the
Trust shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by no later than
10:00 P.M., Washington, D.C. time, on the day following the
date of this Agreement, and the Trust shall at the time of
filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
(xv) The Trust will pay all costs, expenses, fees and
taxes (other than any transfer taxes and fees and
disbursements of counsel for the Underwriters except as set
forth under Section 5 hereof and (iii), (iv) and (vi) below)
in connection with (i) the preparation and filing of the
Registration Statement, each preliminary prospectus, the
Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of
the Shares, (iii) the producing, word processing and/or
printing of this Agreement, any Agreement Among Underwriters,
any dealer agreements, any Powers of Attorney and any closing
documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each
thereof to the Underwriters and (except closing documents) to
dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state
laws and the determination of their eligibility for investment
under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing of copies of any
blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on
any securities exchange or qualification of the Shares for
quotation on NASDAQ and any registration thereof under the
Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD and (vii) the performance
of the Trust's other obligations hereunder. BAI has agreed to
pay organizational expenses and offering costs (other than
sales load) of the Trust that exceed $[ ] per Common Share.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 7 hereof or the default by one or more of
the Underwriters in its or their respective obligations hereunder, the Trust
shall, in addition to paying the amounts described in Section 4(a)(xv) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters hereunder are subject to the accuracy in all material respects of
the representations and warranties of the Trust and the Advisers contained in
Section 3 hereof or in certificates of any officer of the Trust or the Advisers
delivered pursuant to the provisions hereof, to the performance by the Trust and
the Advisers of their respective covenants and other obligations hereunder, and
to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, has become effective and at the Closing Date no stop
order suspending the effectiveness of the
-11-
Registration Statement shall have been issued under the Act, no notice or
order pursuant to Section 8(e) of the Investment Company Act shall have been
issued, and no proceedings with respect to either shall have been initiated
or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A information shall have been filed with the
Commission in accordance with Rule 497 (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) No amendment or supplement to the Registration Statement or
Prospectus shall be filed prior to the time the Registration Statement
becomes effective to which you object in writing.
(c) The Registration Statement shall become effective at or before
5:00 P.M., New York City time, on the date of this Agreement, unless a later
time (but not later than 5:00 P.M., New York City time, on the second full
business day after the date of this Agreement) shall be agreed to by the
Trust and you in writing or by telephone, confirmed in writing; PROVIDED,
HOWEVER, that the Trust and you and any group of Underwriters, including
you, who have agreed hereunder to purchase in the aggregate at least 50% of
the Firm Shares may from time to time agree on a later date.
(d) Prior to the Time of Purchase, or the Additional Time of
Purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the
Act or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications thereof,
if any, shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and (iii) the Prospectus and all
amendments or supplements thereto, or modifications thereof, if any, shall
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 light of the circumstances under which they are
made, not misleading.
(e) At the Closing Date, the Representative shall have received
the favorable opinions, dated as of the Closing Date, of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Trust, and Xxxxxx X. Xxxxxxxx,
counsel for the Advisers, in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such letters
for each of the other Underwriters substantially to the effect set forth in
EXHIBIT A hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(f) At the Closing Date, the Representative shall have received
the favorable opinion, dated as of the Closing Date, of Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters with
respect to the matters set forth in clauses (A) (i), (ii), (vi), (vii)
(solely as to preemptive or other similar rights arising by operation of law
or under the charter or by-laws of the Trust), (viii) through (x),
inclusive, (xii), (xiv) (solely as to the information in the Prospectus
under "Description of Shares") and the last paragraph of EXHIBIT A hereto.
In giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York and
the federal law of the United States, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Trust and
certificates of public officials.
(g) At the Closing Date, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Trust, whether or
not arising in the ordinary course of business, and the Representative shall
have received a certificate of a duly authorized officer of the Trust and of
the Treasurer of the Trust and of the President or a Vice
-12-
President or Managing Director of each of the Advisers, dated as of the
Closing Date, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Sections 3(a) and (b)
hereof are true and correct in all material respects with the same force and
effect as though expressly made at and as of the Closing Date, (iii) each of
the Trust and the Advisers, respectively, has complied in all material
respects with all agreements and satisfied in all material respects all
conditions on its part to be performed or satisfied at or prior to the
Closing Date, and (iv) no stop order suspending the effectiveness of the
Registration Statement, or order of suspension or revocation of registration
pursuant to Section 8(e) of the Investment Company Act, has been issued and
no proceedings for any such purpose have been instituted or are pending or
are contemplated by the Commission.
(h) At the time of the execution of this Agreement, the
Representative shall have received from Deloitte & Touche LLP a letter dated
such date, in form and substance satisfactory to the Representative,
together with signed or reproduced copies of such letter for each of the
other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(i) At the Closing Date, the Representative shall have received
from Deloitte & Touche LLP a letter, dated as of the Closing Date, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to The
Closing Date.
(j) At the Closing Date, the Shares shall have been approved for
listing on the NYSE, subject only to official notice of issuance.
(k) The NASD has confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms
and arrangements.
(l) In the event that the Underwriters exercise their option
provided in Section 1 hereof to purchase all or any portion of the
Additional Shares, the representations and warranties of the Trust contained
herein and the statements in any certificates furnished by the Trust
hereunder shall be true and correct as of each Additional Time of Purchase
and, at the relevant Additional Time of Purchase, the Representative shall
have received:
(i) Certificates, dated such Additional Time of Purchase, of
a duly authorized officer of the Trust and of the Treasurer of the
Trust and of the President or a Vice President or Managing Director of
each of the Advisers confirming that the information contained in the
certificate delivered by each of them at the Closing Date pursuant to
Section 6(d) hereof remains true and correct in all material respects
as of such Additional Time of Purchase.
(ii) The favorable opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, counsel for the Trust, and Xxxxxx X. Xxxxxxxx, counsel for
the Advisers, in form and substance satisfactory to counsel for the
Underwriters, dated such Additional Time of Purchase, relating to the
Additional Shares to be purchased on such Additional Time of Purchase
and otherwise to the same effect as the opinion required by Section
6(b) hereof.
(iii) The favorable opinion of Xxxxxxxx Chance Xxxxxx & Xxxxx
LLP, counsel for the Underwriters, dated such Additional Time of
Purchase, relating to the Additional Shares to be purchased on such
Additional Time of Purchase and otherwise to the same effect as the
opinion required by Section 6(c) hereof.
-13-
(iv) A letter from Deloitte & Touche LLP, in form and
substance satisfactory to the Representative and dated such Additional
Time of Purchase, substantially in the same form and substance as the
letter furnished to the Representative pursuant to Section 6(f) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Additional Time of Purchase.
(m) At the Closing Date and at each Additional Time of
Purchase, counsel for the Underwriters shall have been furnished with
such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Shares as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Trust and the Advisers in
connection with the organization and registration of the Trust under the
Investment Company Act and the issuance and sale of the Shares as herein
contemplated shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (y) there has been any material adverse change, financial or
otherwise (other than as referred to in the Registration Statement and
Prospectus), in the operations, business or condition of the Trust and its
subsidiaries taken as a whole, which would, in your judgment or in the judgment
of such group of Underwriters, make it impracticable to market the Shares, or
(z) if, at any time prior to the Time of Purchase or, with respect to the
purchase of any Additional Shares, the Additional Time of Purchase, as the case
may be, trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or limitations
or minimum prices shall have been established on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market, or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in your judgment or in the judgment of such group of
Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Trust and each other Underwriter shall be
notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Trust shall be
unable to comply with any of the terms of this Agreement, the Trust shall not be
under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(a)(xv), 5 and 9 hereof), and the Underwriters shall be
under no obligation or liability to the Trust under this Agreement (except to
the extent provided in Section 9 hereof) or to one another hereunder.
8. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 6 and 7, if
any Underwriter shall default in its obligation to take up and pay for the Firm
Shares to be purchased by it hereunder (otherwise than for a reason sufficient
to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall
-14-
take up and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Trust agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Trust or selected by the Trust with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Trust for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Trust or you shall have the right
to postpone the Time of Purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Trust shall make arrangements within the five business day
period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Trust to any non-defaulting Underwriter and without any liability on the
part of any non-defaulting Underwriter to the Trust. Nothing in this paragraph,
and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Trust and the Advisers, jointly and severally, agrees to
indemnify, defend and hold harmless each Underwriter, its trustees,
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Trust) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any preliminary
prospectus, the Prospectus and the Prospectus as amended or supplemented by
the Trust), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements
made therein not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf of any
Underwriter through you to the Trust or the Adviser, expressly for use with
reference to such Underwriter in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to
-15-
be stated in such Registration Statement or such Prospectus or necessary to
make such information not misleading, PROVIDED, HOWEVER, that the indemnity
agreement contained in this subsection (a) with respect to any preliminary
prospectus or amended preliminary prospectus shall not inure to the benefit
of any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such loss, damage, expense,
liability or claim purchased the Shares which is the subject thereof if the
Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus to such
person at or prior to the written confirmation of the sale of such Shares to
such person, unless the failure is the result of noncompliance by the
Company with paragraph (h) of Section 4 hereof.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may
be sought against the Trust or the Advisers pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Trust
and the Advisers in writing of the institution of such Proceeding and the
Trust or the Advisers shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such indemnified party
and payment of all reasonable fees and expenses; PROVIDED, HOWEVER, that the
omission to so notify the Trust or the Advisers shall not relieve the Trust
or the Advisers from any liability which the Trust or the Advisers may have
to any Underwriter or any such person or otherwise. Such Underwriter or such
person shall have the right to employ its or their own counsel in any such
case, but the reasonable fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Trust or the Advisers,
as the case may be, in connection with the defense of such Proceeding or the
Trust or the Advisers shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to have charge of the defense
of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those available
to the Trust or the Advisers (in which case neither the Trust nor the
Advisers shall have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such
reasonable fees and expenses shall be borne by the Trust or the Advisers and
paid as incurred (it being understood, however, that the Trust or the
Advisers shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series
of related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). Neither the Trust nor the
Adviser shall be liable for any settlement of any Proceeding effected
without its written consent but if settled with the written consent of the
Trust or the Advisers, the Trust or the Advisers, as the case may be, agree
to indemnify and hold harmless any Underwriter and any such person from and
against any loss or liability by reason of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened 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 Proceeding and
does not include an admission of fault, culpability or a failure to act, by
or on behalf of such indemnified party.
Each Underwriter severally agrees to indemnify, defend and hold
harmless the Trust and the Advisers, and each of their respective trustees,
directors and officers, and any person who controls the Trust or the
Advisers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or severally, the Trust
or the Advisers or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of such Underwriter
through you to the Trust or the Advisers expressly for use with reference to
such Underwriter in the Registration
-16-
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Trust) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Trust, the Advisers or any
such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Trust, the Advisers or
such person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the defense
of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all reasonable fees
and expenses; PROVIDED, HOWEVER, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability which such
Underwriter may have to the Trust, the Advisers or any such person or
otherwise. The Trust, the Advisers or such person shall have the right to
employ its own counsel in any such case, but the reasonable fees and
expenses of such counsel shall be at the expense of the Trust, the Advisers
or such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of
such Proceeding or such Underwriter shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to have
charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to or in conflict with
those available to such Underwriter (in which case such Underwriter shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but such Underwriter may employ counsel and
participate in the defense thereof but the reasonable fees and expenses of
such counsel shall be at the expense of such Underwriter), in any of which
events such reasonable fees and expenses shall be borne by such Underwriter
and paid as incurred (it being understood, however, that such Underwriter
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties
who are parties to such Proceeding). No Underwriter shall be liable for any
settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the
Trust, the Advisers and any such person from and against any loss or
liability by reason of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of
any pending or threatened 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 Proceeding.
(c) In addition to the foregoing indemnification, the Trust and
the Advisers also, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 9(a), as limited by
the proviso set forth therein, with respect to any sales material.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable 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, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Trust and the Advisers on the
one hand and the Underwriters on the other hand from the offering of the
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 Advisers on the one hand and of the
Underwriters on the other in connection
-17-
with the statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the Advisers
on the one hand and the Underwriters on the other shall be deemed to be in
the same respective proportions as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Trust and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering price of
the Shares. The relative fault of the Trust and the Advisers on the one hand
and of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by the Trust or the Advisors or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable
by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection
with investigating, preparing to defend or defending any Proceeding.
(e) The Trust, the Advisers and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such
Underwriter and distributed to the public were offered to the public exceeds
the amount of any damage which such Underwriter has otherwise been required
to pay by reason of such untrue statement or alleged untrue statement or
omission or alleged omission. 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 Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Trust
contained in this Agreement shall remain in full force and effect regardless
of any investigation made by or on behalf of any Underwriter, its partners,
directors or officers or any person (including each partner, officer or
director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf
of the Trust or the Advisers, its trustees, directors or officers or any
person who controls the Trust or the Advisers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
The Trust and the Advisers and each Underwriter agree promptly to notify
each other of the commencement of any Proceeding against it and, in the case
of the Trust, against any of the Trust's or the Advisers' trustees, officers
or directors in connection with the issuance and sale of the Shares, or in
connection with the Registration Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention: Syndicate
Department and, if to the Trust or Advisers, shall be sufficient in all respects
if delivered or sent to the Trust at the offices of BlackRock Financial
Management, Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
X. Xxxxxxxxxxx.
00. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York. The
-18-
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Trust and Advisers consent to the jurisdiction of such courts and personal
service with respect thereto. The Trust and Advisers hereby consent to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
UBS Warburg LLC or any indemnified party. Each of UBS Warburg LLC and the Trust
and Advisers (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Trust
and Advisers agree that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon the
Trust or the Advisers, as the case may be, and may be enforced in any other
courts in the jurisdiction of which the Trust or the Advisers, as the case may
be, is or may be subject, by suit upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters and the Trust and the
Advisers and to the extent provided in Section 9 hereof the controlling persons,
directors and officers referred to in such section, and their respective
successors, assigns, heirs, personal representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Underwriters and the Trust and the Advisers and their successors and assigns
and any successor or assign of any substantial portion of the Trust's and the
Advisers' and any of the Underwriters' respective businesses and/or assets.
-19-
If the foregoing correctly sets forth the understanding among the Trust, the
Advisers and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Trust, the Advisers and the Underwriters, severally.
Very truly yours,
BlackRock Strategic Bond Trust
By:
----------------------------------------
Name:
Title:
BlackRock Advisors, Inc.
By:
----------------------------------------
Name:
Title:
BlackRock Financial Management, Inc.
By:
----------------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of itself and the
other several Underwriters
named in Schedule A
UBS WARBURG LLC
By: UBS WARBURG LLC
By:
-----------------------
Name:
Title:
-20-
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SHARES
----------- -----------
UBS Warburg LLC.......................................... [ ]
Total........................................... [ ]
A-1
Exhibit A
FORM OF OPINION OF TRUST'S AND ADVISERS'
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 6(e)
(A) With respect to the Trust:
(i) The Trust has been duly organized and is validly
existing as a business trust in good standing under the laws
of the State of Delaware.
(ii) The Trust has business trust power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under the Purchase Agreement.
(iii) The Trust is duly qualified as a foreign business
trust to transact business and is in good standing in each
other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) To the best of our knowledge, the Trust does not have
any subsidiaries.
(v) The authorized, issued and outstanding shares of
beneficial interest of the Trust is as set forth in the
Prospectus under the caption "Description of shares -- Common
Shares" (except for subsequent issuances, if any, pursuant to
the Purchase Agreement); all issued and outstanding shares of
beneficial interest of the Trust have been duly authorized and
validly issued and are fully paid and non-assessable, except
as provided for in the Trust's declaration of trust, and have
been offered and sold or exchanged by the Trust in compliance
with all applicable laws (including, without limitation,
federal and state securities laws); the Shares conform as to
legal matters to all statements relating thereto contained in
the Prospectus and such description conforms to the rights set
forth in the instruments defining the same; and none of the
outstanding shares of beneficial interest of the Trust was
issued in violation of the preemptive or other similar rights
of any securityholder of the Trust.
(vi) The Shares to be purchased by the Underwriters from
the Trust have been duly authorized for issuance and sale to
the Underwriters pursuant to the Purchase Agreement and, when
issued and delivered by the Trust pursuant to the Purchase
Agreement against payment of the consideration set forth in
the Purchase Agreement, will be validly issued and fully paid
and non-assessable, except as provided for in the Trust's
declaration of trust, and no holder of the Shares is or will
be subject to personal liability by reason of being such a
holder.
(vii) The issuance of the Shares is not subject to
preemptive or other similar rights of any securityholder of
the Trust.
(viii) The Purchase Agreement has been duly authorized,
executed and delivered by the Trust.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
Act; any required filing of the Prospectus pursuant to Rule
497(c) or Rule 497(h) has been made in the manner and within
the time period required by Rule 497; and, to the best of our
knowledge, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration
Statement has been issued under the Act, and, to the best of
our knowledge, no order of suspension or
A-1
revocation of registration pursuant to Section 8(e) of the
Investment Company Act has been issued, and no proceedings for
any such purpose have been instituted or are pending or
threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectus and each
amendment or supplement to the Registration Statement and
Prospectus as of their respective effective or issue dates
(other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need
express no opinion), and the notification on Form N-8A
complied as to form in all material respects with the
requirements of the Act, the Investment Company Act and the
Rules and Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was
not "materially different," as such term is used in Rule 434,
from the prospectus included in the Registration Statement at
the time it became effective.
(xii) The form of certificate used to evidence the Shares
complies in all material respects with all applicable
statutory requirements, with any applicable requirements of
the declaration of trust and by-laws of the Trust and the
requirements of the New York Stock Exchange.
(xiii) To the best of our knowledge, there is not pending
or threatened any action, suit, proceeding, inquiry or
investigation, to which the Trust is a party, or to which the
property of the Trust is subject, before or brought by any
court or governmental agency or body, domestic or foreign,
which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of
the Trust or the consummation of the transactions contemplated
in the Purchase Agreement or the performance by the Trust of
its obligations thereunder.
(xiv) The information in the Prospectus under "Description
of shares" and "Tax matters" and in the Registration Statement
under Item 29 (Indemnification), to the extent that it
constitutes matters of law, summaries of legal matters, the
Trust's declaration of trust and by-laws or legal proceedings,
or legal conclusions, has been reviewed by us and is correct
in all material respects.
(xv) Each of the Management Agreement, the Sub-Advisory
Agreement, the Custodian Agreement, the Transfer Agency
Agreement and the Purchase Agreement comply in all material
respects with all applicable provisions of the Investment
Company Act, Advisers Act, the Rules and Regulations and the
Advisers Act Rules and Regulations.
(xvi) The Trust is duly registered with the Commission
under the Investment Company Act as a closed-end, diversified
management investment company; and, to the best of our
knowledge, no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated
or threatened by the Commission.
(xvii) To the best of our knowledge, no person is serving
as an officer, trustee or investment adviser of the Trust
except in accordance with the Investment Company Act and the
Rules and Regulations and the Investment Advisers Act and the
Advisers Act Rules and Regulations. Except as disclosed in the
Registration Statement and Prospectus (or any amendment or
supplement to either of them), to the best of our knowledge,
no trustee of the Trust is an "interested person" (as defined
in the Investment Company Act) of the Trust or an "affiliated
person" (as defined in the Investment Company Act) of an
Underwriter.
A-2
(xviii) There are no statutes or regulations that are
required to be described in the Prospectus that are not
described as required.
(xix) All descriptions in the Registration Statement of
contracts and other documents to which the Trust is a party
are accurate in all material respects. To the best of our
knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(xx) To the best of our knowledge, the Trust is not in
violation of its declaration of trust or by-laws and no
default by the Trust exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that
is described or referred to in the Registration Statement or
the Prospectus or filed or incorporated by reference as an
exhibit to the Registration Statement.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
court or governmental authority or agency (other than under
the Act, the 1934 Act, the Investment Company Act and the
Rules and Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary
or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the
offering, issuance or sale of the Shares or the consummation
of the transactions contemplated by this Agreement.
(xxii) The execution, delivery and performance of the
Purchase Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and in the Registration
Statement (including the issuance and sale of the Shares and
the use of the proceeds from the sale of the Shares as
described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Trust with its obligations
under the Purchase Agreement do not and will not, whether with
or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the
Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Trust pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to us,
to which the Trust is a party or by which it or any of them
may be bound, or to which any of the property or assets of the
Trust is subject, nor will such action result in any violation
of the provisions of the charter or by-laws of the Trust, or
any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign,
having jurisdiction over the Trust or any of its properties,
assets or operations.
(xxiii) The Purchase Agreement, the Management Agreement,
the Sub-Advisory Agreement, the Custodian Agreement and the
Transfer Agency Agreement have each been duly authorized by
all requisite action on the part of the Trust, executed and
delivered by the Trust, as of the dates noted therein.
Assuming due authorization, execution and delivery by the
other parties thereto with respect to the Custodian Agreement
and the Transfer Agency Agreement, each of the Management
Agreement, the Sub-Advisory Agreement, the Custodian Agreement
and the Transfer Agency Agreement constitutes a valid and
binding agreement of the Trust, enforceable in accordance with
its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar
A-3
laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(B) With respect to the Advisers:
(i) Each Adviser has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Delaware.
(ii) Each Adviser has full corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under the Purchase Agreement.
(iii) Each Adviser is duly qualified as a foreign
corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify would not result in a Material Adverse Effect.
(iv) Each Adviser is duly registered with the Commission as
an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and
Regulations, the Investment Company Act or the Rules and
Regulations from acting under the Management Agreement for the
Trust as contemplated by the Prospectus.
(v) The Purchase Agreement, the Management Agreement and
the Sub-Advisory Agreement have been duly authorized, executed
and delivered by the respective Adviser, and the Management
Agreement and the Sub-Advisory Agreement each constitutes a
valid and binding obligation of the respective Adviser,
enforceable in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at
law).
(vi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Advisers are a party, or to which
the property of the Advisers is subject, before or brought by
any court or governmental agency or body, domestic or foreign,
which might reasonably be expected to result in any material
adverse change in the condition, financial or otherwise, in
the earnings, business affairs or business prospects of the
Advisers, materially and adversely affect the properties or
assets of the Advisers or materially impair or adversely
affect the ability of the Advisers to function as an
investment adviser or perform its obligations under the
Management Agreement or the Sub-Advisory Agreement, or which
is required to be disclosed in the Registration Statement or
the Prospectus.
(vii) To the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits
thereto, and the descriptions thereof or references thereto
are correct in all material respects.
(viii) To the best of our knowledge, each Adviser is not in
violation of its certificate of incorporation, by-laws or
other organizational documents and no default by the Advisers
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to
in the Registration
A-4
Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
(ix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
court or governmental authority or agency, domestic or foreign
(other than under the Act, the Investment Company Act and the
Rules and Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary
or required in connection with the due authorization,
execution and delivery of the Purchase Agreement.
(x) The execution, delivery and performance of the
Purchase Agreement and the consummation of the transactions
contemplated in the Purchase Agreement and in the Registration
Statement and compliance by the Advisers with their
obligations under the Purchase Agreement do not and will not,
whether with or without the giving of notice or lapse of time
or both, conflict with or constitute a breach of, or default
or Repayment Event (as defined in Section 1(a)(xii) of the
Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Advisers pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to us,
to which the Advisers is a party or by which it or any of them
may be bound, or to which any of the property or assets of the
Advisers is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have
a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the
Advisers, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Advisers or any of its
properties, assets or operations.
In addition, we have participated in the preparation of the
Registration Statement and the Prospectus and participated in discussions with
certain officers, trustees and employees of the Trust, representatives of
Deloitte & Touche LLP, the independent accountants who examined the statement of
assets and liabilities of the Trust included or incorporated by reference in the
Registration Statement and the Prospectus, and you and your representatives and
we have reviewed certain Trust records and documents. While we have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the information
contained in the Registration Statement and the Prospectus, except to the extent
necessary to enable us to give the opinions with respect to the Trust in
paragraphs (A)(v), (xiv) and (xix), on the basis of such participation and
review, nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time such Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements, supporting schedules and
other financial data included therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
A-5
