STRUCTURING FEE AGREEMENT
Exhibit 99.(h)(2)
August [•], 2010
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated [•], 2010 (the “Underwriting
Agreement”), by and among BlackRock Build America Bond Trust (the “Fund”), BlackRock Advisors, LLC
(the “Adviser”), BlackRock Investment Management, LLC (the “Subadviser”) and each of the
Underwriters named therein, severally, with respect to the issue and sale of the Fund’s common shares of
beneficial interest, par value $0.001 per share (the “Common Shares”) (the “Offering”), as described therein. Capitalized terms used
herein and not otherwise defined shall have the meanings given to them in the Underwriting
Agreement.
1. Fee.
In consideration of your services assisting the Adviser with respect to the structure and
design of the Fund and the organization of the Fund as well as services related to the sale and
distribution of the Fund’s Common Shares, the Adviser shall pay a fee to you in the aggregate
amount of $[•] (the “Fee”). The Fee shall be paid on or before [•], 2010. The Fee shall be paid
by wire transfer to the order of Xxxxx Fargo Securities, LLC.
In the event that the Adviser (or the Fund or the Subadviser or any person or entity
affiliated with the Adviser or the Fund or the Subadviser or acting on behalf of or at the
direction of any of the foregoing) compensates or agrees to compensate any other broker or dealer
participating in the Offering (each, an “Other Broker”) for any services or otherwise in connection
with the Offering or with respect to the Fund or its Common Shares (excluding for this purpose any
compensation paid directly to the entire underwriting syndicate, as a group, pursuant to the
Underwriting Agreement), and whether such compensation be denominated a fee, an expense
reimbursement, a set-off, a credit or otherwise (such compensation with respect to any Other
Broker, such Other Broker’s “Other Compensation”), then the amount of the Fee shall be increased as
and to the extent necessary so that the Fee payable to you hereunder, expressed as a percentage of
the aggregate price to the public of the Common Shares sold by you in the Offering (including any
Common Shares over-allotted by you in the Offering regardless of whether the over-allotment option
in the Offering is exercised), is no less than the Other Compensation, expressed as a percentage of
the aggregate price to the public of the Common Shares sold by such Other Broker in the Offering subject to any limitations imposed by FINRA.
2. Term. This Agreement shall terminate upon the payment of the entire amount of the
Fee, as specified in Section 1 hereof.
3. Indemnification.
The Adviser agrees to the indemnification and other agreements set forth in the
Indemnification Agreement attached hereto, the provisions of which are incorporated herein by
reference and shall survive the termination, expiration or supersession of this Agreement.
4. Not
an Investment Adviser; No Fiduciary Duty. The Adviser acknowledges that you are
not providing any advice hereunder as to the value of securities or regarding the advisability of
purchasing or selling any securities for the Fund’s portfolio. No provision of this Agreement
shall be considered as creating, nor shall any provision create, any obligation on the part of you,
and you are not agreeing hereby, to: (i) furnish any advice or make any recommendations regarding
the purchase or sale of portfolio securities; or (ii) render any opinions, valuations or
recommendations of any kind or to perform any such similar services. The Adviser hereby
acknowledges that your engagement under this Agreement is as an independent contractor and not in
any other capacity, including as a fiduciary. Furthermore, the Adviser agrees that it is solely
responsible for making its own judgments in connection with the matters covered by this Agreement
(irrespective of whether you have advised or are currently advising the Adviser on related or other
matters).
5. Not
Exclusive. Nothing herein shall be construed as prohibiting you or your
affiliates from acting as an underwriter or financial adviser or in any other capacity for any
other persons (including other registered investment companies or other investment advisers).
6. Assignment.
This Agreement may not be assigned by any party without prior written
consent of the other party.
7. Amendment;
Waiver. No provision of this Agreement may be amended or waived except by
an instrument in writing signed by the parties hereto.
8. Governing
Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
9. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, and all of which, when taken together, shall constitute one agreement.
Delivery of an executed signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
2
This Agreement shall be effective as of the date first written above.
| BLACKROCK ADVISORS, LLC |
||||
| By: | ||||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Managing Director | |||
| Agreed and Accepted: XXXXX FARGO SECURITIES, LLC |
||||
| By: | ||||
| Name: | Xxxxx Xxxx | |||
| Title: | Managing Director | |||
Indemnification
Agreement
August [•], 2010
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxx Fargo Securities, LLC (the “Bank”) to assist the
undersigned, BlackRock Advisors, LLC (together with its affiliates and subsidiaries, the “Company”)
with respect to the matters set forth in the Structuring Fee
Agreement dated [•], 2010 between the
Company and the Bank (the “Agreement”), in the event that the Bank, any of its affiliates, each
other person, if any, controlling the Bank or any of its affiliates, their respective officers,
current and former directors, employees and agents, or the successors or assigns of any of the
foregoing persons (the Bank and each such other person or entity being referred to as an
“Indemnified Party”) becomes involved in any capacity in any claim, suit, action, proceeding,
investigation or inquiry (including, without limitation, any shareholder or derivative action or
arbitration proceeding) (collectively, a “Proceeding”) with respect to the services performed
pursuant to and in accordance with the Agreement, the Company agrees to indemnify, defend and hold
each Indemnified Party harmless to the fullest extent permitted by law, from and against any
losses, claims, damages, liabilities and expenses, including the fees and expenses of counsel to
the Indemnified Parties, with respect to the services performed pursuant to and in accordance with
the Agreement, except to the extent that it shall be determined by a court of competent
jurisdiction in a judgment that has become final in that it is no longer subject to appeal or other
review, that such losses, claims, damages, liabilities and expenses resulted primarily from the
gross negligence, bad faith or willful misconduct of such Indemnified
Party. The Indemnification provided hereunder shall not extend to those matters indemnified under the Underwriting Agreement, dated August [•] 2010, by and among BlackRock Build America Bond Trust, the Company, BlackRock Investment Management, LLC and each of the Underwriters named therein. In addition, in the event that
an Indemnified Party becomes involved in any capacity in any Proceeding with respect to the
services performed pursuant to and in accordance with the Agreement, the Company will reimburse
such Indemnified Party for its legal and other expenses actually incurred and documented (including the cost of any investigation
and preparation) as such expenses are incurred by such Indemnified Party in connection therewith.
Promptly as reasonably practicable after receipt by an Indemnified Party of notice of the
commencement of any Proceeding, such Indemnified Party will, if a claim in respect thereof is to be
made under this paragraph, notify the Company in writing of the commencement thereof; but the
failure so to notify the Company (i) will not relieve the Company from liability under this
paragraph to the extent it is not materially prejudiced as a result thereof and (ii) in any event
shall not relieve the Company from any liability which it may have other than on account of
this Indemnification Agreement. The Company shall be entitled to appoint counsel of the Company’s choice at the Company’s expense
to represent the Indemnified Parties in any Proceeding for which indemnification is sought (in
which case the Company shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the Indemnified Parties or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the Indemnified Parties.
Notwithstanding the Company’s election to appoint counsel to represent the Indemnified Parties in a
Proceeding, the Indemnified Parties shall have the right to employ one separate counsel (in
addition to any local
counsel), in its sole discretion, and the Company shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the Company to represent the Indemnified Parties would
present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such Proceeding include all of the Indemnified Parties and the Company and the
Indemnified Parties shall have reasonably concluded that there may be legal defenses available to
them and/or other indemnified parties which are different from or additional to those available to
the Company, (iii) the Company shall not have employed counsel satisfactory to the Indemnified
Parties to represent the Indemnified Parties within a reasonable time after notice of the
institution of such Proceeding or (iv) the Company shall authorize the Indemnified Parties to
employ separate counsel at the expense of the Company. In no event shall the Company be liable for
the fees and expenses of more than one counsel (in addition to any local counsel) separate from
their own counsel for the Indemnified Parties and/or the other Underwriters (as defined in the
Underwriting Agreement) (taken as a group) that have entered into a structuring fee agreement, an
additional compensation agreement or similar agreement pursuant to which the Company pays
additional compensation to the respective Underwriter in connection with the offering contemplated
in the Underwriting Agreement, in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the Indemnified Parties, settle or
compromise or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be sought hereunder
(whether or not the Indemnified Parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each Indemnified Party
from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Party.
If such indemnification were not to be available for any reason, the Company agrees to
contribute to the losses, claims, damages, liabilities and expenses involved (i) in the proportion
appropriate to reflect the relative benefits received or sought to be received by the Company and
its stockholders and affiliates, on the one hand, and the Indemnified Parties, on the other hand,
in the matters contemplated by the Agreement or (ii) if (but only if and to the extent) the
allocation provided for in clause (i) is for any reason held unenforceable, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company and its stockholders and affiliates, on the one hand, and the party
entitled to contribution, on the other hand, as well as any other relevant equitable
considerations. The Company agrees that for the purposes of this paragraph the relative benefits
received, or sought to be received, by the Company and its stockholders and affiliates, on the one
hand, and the party entitled to contribution, on the other hand, of a transaction as contemplated
shall be deemed to be in the same proportion that the total value received or paid or contemplated
to be received or paid by the Company or its stockholders or affiliates, as the case may be, as a
result of or in connection with the transaction (whether or not consummated) for which the Bank has
been retained to perform services bears to the fees paid to the Bank under the Agreement; provided,
that in no event shall the Company contribute less than the amount necessary to assure that the
Indemnified Parties are not liable for losses, claims, damages, liabilities and expenses in excess
of the amount of fees actually received by the Bank pursuant to the Agreement. Relative fault
shall be determined by reference to, among other things, whether any alleged untrue statement or
5
omission or any other alleged conduct relates to information provided by the Company or other
conduct by the Company (or its employees or other agents), on the one hand, or by the Bank, on the
other hand. Notwithstanding the provisions of this paragraph, an Indemnified Party shall not be
entitled to contribution from the Company if it is determined that such Indemnified Party was
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act
of 1933, as amended) and the Company was not guilty of such fraudulent misrepresentation. The
Company will not settle any Proceeding in respect of which indemnity may be sought hereunder,
whether or not an Indemnified Party is an actual or potential party to such Proceeding, without the
Bank’s prior written consent (which consent shall not be unreasonably withheld). The foregoing
indemnity and contribution agreement shall be in addition to any rights that any Indemnified Party
may have at common law or otherwise.
The Company agrees that no Indemnified Party shall have any liability to the Company or any
person asserting claims on behalf of or in right of the Company with respect to the services
performed pursuant to and in accordance with the Agreement, except to the extent that it shall be
determined by a court of competent jurisdiction in a judgment that has become final in that it is
no longer subject to appeal or other review that any losses, claims, damages, liabilities or
expenses incurred by the Company resulted primarily from the gross negligence or willful misconduct
of the Bank in performing the services that are the subject of the Agreement.
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF ANY KIND OR NATURE
WHATSOEVER WITH RESPECT TO THE SERVICES PERFORMED PURSUANT TO AND IN ACCORDANCE WITH THE AGREEMENT
(“CLAIM”), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. 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 EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS, AND THE
COMPANY AND THE INDEMNIFIED PARTIES CONSENT TO THE JURISDICTION OF SUCH COURTS AND PERSONAL SERVICE
WITH RESPECT THERETO. THE COMPANY HEREBY CONSENTS 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 THE BANK OR ANY INDEMNIFIED PARTY. EACH INDEMNIFIED PARTY AND THE COMPANY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT. THE COMPANY AGREES THAT A
FINAL JUDGMENT IN ANY PROCEEDING OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT
BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND MAY BE ENFORCED IN
ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT, BY SUIT UPON SUCH
JUDGMENT.
6
The foregoing Indemnification Agreement shall remain in full force and effect notwithstanding
any termination of the Bank’s engagement under the Agreement. This Indemnification Agreement may
be executed in two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same agreement.
| Very truly yours, BLACKROCK ADVISORS, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Agreed and Accepted: XXXXX FARGO SECURITIES, LLC |
||||
| By: | ||||
| Name: | Xxxxx Xxxx | |||
| Title: | Managing Director | |||
[Indemnification Agreement]
