<PAGE>
As filed with the Securities and Exchange Commission on August 19, 1999
File Nos. 333-82903
811-09417
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
----------------
FORM N-2
----------------
[X]REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]Pre-Effective Amendment No. 2
[_]Post-Effective Amendment No.
and
[X]REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]Amendment No. 2
----------------
The BlackRock Pennsylvania Strategic Municipal Trust
(Exact name of Registrant as specified in charter)
----------------
c/o BlackRock Financial Management, Inc.
345 Park Avenue
New York, New York 10154
(Address of principal executive offices)
(888) 825-2257
(Registrant's Telephone Number, including Area Code)
Ralph L. Schlosstein, President
The BlackRock Pennsylvania Strategic Municipal Trust
345 Park Avenue
New York, New York 10154
(Name and address of Agent for Service)
with a copy to:
Thomas A. DeCapo Gary S. Schpero
Skadden, Arps, Slate, Meagher & Flom LLP Simpson Thacher & Bartlett
One Beacon Street 425 Lexington Avenue
Boston, Massachusetts 02108-3194 New York, New York 10017
----------------
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the Registration Statement. If any securities on this form
are to be offered on a delayed or continuous basis in reliance on Rule 415
under the Securities Act of 1933, other than securities offered in connection
with a dividend reinvestment plan, check the following box [_]
[_] This form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is 33- .
----------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Securities Being Offering Price Offering Registration
Being Registered Registered Per Share Price(1) Fee(1)(2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, $0.001 par
value.................... 4,000,000 $15.00 $60,000,000 $16,680
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Previously paid.
----------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such dates as the Commission, acting pursuant to said Section
8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
The contents of the Prospectus and Statement of Additional Information
previously filed by The BlackRock Pennsylvania Strategic Municipal Trust (the
"Trust") in the Registration Statement on Form N-2 (File Nos. 333-82093 and
811-09417), as filed with the Securities and Exchange Commission on July 29,
1999, is incorporated herein by reference. The purpose of this filing is to
file additional exhibits to the Trust's Registration Statement. No changes are
being made to either the Trust's Prospectus or Statement of Additional
Information by this Pre-Effective Amendment #2.
<PAGE>
THE BLACKROCK PENNSYLVANIA STRATEGIC MUNICIPAL TRUST
CROSS REFERENCE SHEET
Part A--Prospectus
<TABLE>
<CAPTION>
Items in Part A of Form N-2 Location in Prospectus
--------------------------- ----------------------
<C> <C> <S>
Item 1. Outside Front Cover............ Cover Page
Item 2. Inside Front and Outside Back.. Cover Page
Item 3. Fee Table and Synopsis......... Prospectus Summary; Summary of Trust
Expenses
Item 4. Financial Highlights........... Not Applicable
Item 5. Plan of Distribution........... Cover Page; Prospectus Summary;
Underwriting
Item 6. Selling Shareholders........... Not Applicable
Item 7. Use of Proceeds................ Use of Proceeds; The Trust's
Investments
Item 8. General Description of the
Registrant.................... The Trust; The Trust's Investments;
Risks; Description of Shares;
Certain Provisions in the
Declaration of Trust
Item 9. Management..................... Management of the Trust; Custodian
and Transfer and Dividend Disbursing
Agent
Item 10. Capital Stock, Long-Term Debt,
and Other Securities.......... Description of Shares;
Distributions; Dividend Reinvestment
Plan; Certain Provisions in the
Declaration of Trust; Tax Matters
Item 11. Defaults and Arrears on Senior
Securities.................... Not Applicable
Item 12. Legal Proceedings.............. Legal Opinions
Item 13. Table of Contents of the
Statement of Additional Table of Contents for the Statement
Information................... of Additional Information
Part B--Statement of Additional Information
Item 14. Cover Page..................... Cover Page
Item 15. Table of Contents.............. Cover Page
Item 16. General Information and Not Applicable
History.......................
Item 17. Investment Objective and
Policies...................... Investment Objectives and Policies;
Investment Policies and Techniques;
Portfolio Transactions
Item 18. Management..................... Management of the Trust; Portfolio
Transactions
Item 19. Control Persons and Principal
Holders of Securities......... Management of the Trust
Item 20. Investment Advisory and Other
Services...................... Management of the Trust; Experts
Item 21. Brokerage Allocation and Other
Practices..................... Portfolio Transactions
Item 22. Tax Status..................... Tax Matters; Distributions
Item 23. Financial Statements........... Report of Independent Auditors
</TABLE>
Part C--Other Information
Items 24-33 have been answered in Part C of this Registration Statement.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------------------------------------------
(1) Financial Statements
--------------------
Part A - Report of Independent Accountants.*
Statement of Assets and Liabilities.*
Part B - None.
(2) Exhibits
--------
(a) Agreement and Declaration of Trust. 1
(b) By-Laws.1
(c) Inapplicable.
(d) Form of Specimen Certificate.
(e) Form of Automatic Dividend Reinvestment Plan.
(f) Inapplicable.
(g)(1) Form of Investment Management Agreement.
(g)(2) Form of Sub-Advisory Agreement.
(h)(1) Form of Underwriting Agreement.
(h)(2) Form of Master Agreement among Underwriters.
(h)(3) Form of Salomon Smith Barney Inc. Dealer Letter Agreement.
(i) Inapplicable.
(j) Form of Custodian Agreement.
(k) Form of Registrar, Transfer Agency and Service Agreement.
(l) Opinion and Consent of Counsel to the Trust.*
(m) Inapplicable.
(n) Consent of Independent Public Accountants.*
(o) Inapplicable.
(p) Initial Subscription Agreement. 2
(q) Inapplicable.
(r) Financial Data Schedule.*
(s) Power of Attorney. 2
___________
1 Incorporated by reference to the Trust's Registration Statement on
Form N-2 (File Nos. 333-82093 and 811-09417), filed on July 1, 1999.
2 Incorporated by reference to the Trust's Registration Statement on Form N-2
(File Nos. 333-82093 and 811-09417), filed on July 29, 1999.
* To be Filed by Amendment.
Item 25. Marketing Arrangements
- --------------------------------
Reference is made to the Form of Underwriting Agreement for the
Registrant's shares of beneficial interest to be filed by amendment to this
registration statement.
Item 26. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this registration statement:
Registration fees.................................... $ *
New York Stock Exchange listing fee.................. *
Printing (other than certificates)................... *
Engraving and printing certificates.................. *
Fees and expenses of qualification under
state securities laws (excluding fees
of counsel)......................................... *
Accounting fees and expenses......................... *
Legal fees and expenses.............................. *
C-1
<PAGE>
NASD fee............................................. *
Miscellaneous........................................ *
Total........................................... $ *
* To be furnished by amendment.
Item 27. Persons Controlled by or under Common Control with the Registrant
- ---------------------------------------------------------------------------
Prior to June 30, 1999 the Registrant had no existence.
Item 28. Number of Holders of Shares
- -------------------------------------
Number of
Title of class Record Holders
- -------------- --------------
Shares of Beneficial Interest 0
Item 29. Indemnification
- -------------------------
Article V of the Registrant's Agreement and Declaration of Trust provides as
follows:
Section 5.1. No Shareholder of the Trust shall be subject in such capacity
to any personal liability whatsoever to any Person in connection with Trust
property or the acts, obligations or affairs of the Trust. Shareholders shall
have the same limitation of personal liability as is extended to stockholders of
a private corporation for profit incorporated under the general corporation law
of the State of Delaware. No Trustee or officer of the Trust shall be subject
in such capacity to any personal liability whatsoever to any Person, other than
the Trust or its Shareholders, in connection with Trust Property or the affairs
of the Trust, save only liability to the Trust or its Shareholders arising from
bad faith, willful misfeasance, gross negligence (negligence in the case of
those Trustees or officers who are directors, officers or employees of the
Trust's investment advisor ("Affiliated Indemnitees")) or reckless disregard for
his duty to such person; and, subject to the foregoing exception, all such
persons shall look solely to the Trust property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
shareholder, trustee or officer, as such, of the Trust, is made a party to any
suit or proceeding to enforce any such liability, subject to the foregoing
exception, he shall not, on account thereof, be held to any personal liability.
Section 5.2. a. The Trust hereby agrees to indemnify the Trustees and
officers of the Trust (each such person being an "indemnitee") against any
liabilities and expenses, including amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, and reasonable counsel fees reasonably
incurred by such indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which he may be or may have been
involved as a party or otherwise or with which he may be or may have been
threatened, while acting in any capacity set forth above in this Section 5.2 by
reason of his having acted in any such capacity, except with respect to any
matter as to which he shall not have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust or, in the case of
any criminal proceeding, as to which he shall have had reasonable cause to
believe that the conduct was unlawful, provided, however, that no indemnitee
shall be indemnified hereunder against any liability to any person or any
expense of such indemnitee arising by reason of (i) willful misfeasance, (ii)
bad faith, (iii) gross negligence (negligence in the case of Affiliated
Indemnitees), or (iv) reckless disregard of the duties involved in the conduct
of his position (the conduct referred to in such clauses (i) through (iv) being
sometimes referred to herein as "disabling conduct"). Notwithstanding the
foregoing, with respect to any action, suit or other proceeding voluntarily
prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory
only if the prosecution of such
C-2
<PAGE>
action, suit or other proceeding by such indemnitee was authorized by a majority
of the Trustees.
b. Notwithstanding the foregoing, no indemnification shall be made
hereunder unless there has been a determination (i) by a final decision on the
merits by a court or other body of competent jurisdiction before whom the issue
of entitlement to indemnification hereunder was brought that such indemnitee is
entitled to indemnification hereunder or, (ii) in the absence of such a
decision, by (1) a majority vote of a quorum of those trustees who are neither
"interested persons" of the (as defined in Section 2(a)(19) of the Investment
Company Act) nor parties to the proceeding ("Disinterested Non-Party Trustees"),
that the indemnitee is entitled to indemnification hereunder, or (2) if such
quorum is not obtainable or even if obtainable, if such majority so directs,
independent legal counsel in a written opinion conclude that the indemnitee
should be entitled to indemnification hereunder. All determinations to make
advance payments in connection with the expense of defending any proceeding
shall be authorized and made in accordance with the immediately succeeding
paragraph (c) below.
c. The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Trust receives a written affirmation by the indemnitee
of the indemnitee's good faith belief that the standards of conduct necessary
for indemnification have been met and a written undertaking to reimburse the
Trust unless it is subsequently determined that he is entitled to such
indemnification and if a majority of the Trustees determine that the applicable
standards of conduct necessary for indemnification appear to have been met. In
addition, at least one of the following conditions must be met: (i) the
indemnitee shall provide adequate security for his undertaking, (ii) the Trust
shall be insured against losses arising by reason of any lawful advances, or
(iii) a majority of a quorum of the Disinterested Non-Party Trustees, or if a
majority vote of such quorum so direct, independent legal counsel in a written
opinion, shall conclude, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is substantial reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.
d. The rights accruing to any indemnitee under these provisions shall
not exclude any other right to which he may be lawfully entitled.
e. Subject to any limitations provided by the Investment Company Act
and this Declaration, the Trust shall have the power and authority to indemnify
other Persons providing services to the Trust to the full extent provided by law
as if the Trust were a corporation organized under the Delaware General
Corporation Law provided that such indemnification has been approved by a
majority of the Trustees.
Insofar as indemnification for liabilities arising under the Act, may be
permitted to Trustees, officers and controlling persons of the Trust, pursuant
to the foregoing provisions or otherwise, the Trust has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a Trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue. Reference is made to Article ___ of the
underwriting agreement attached as Exhibit ___, which is incorporated herein by
reference.
Item 30. Business and Other Connections of Investment Adviser
- --------------------------------------------------------------
Not Applicable
C-3
<PAGE>
Item 31. Location of Accounts and Records
- ------------------------------------------
The Registrant's accounts, books and other documents are currently located
at the offices of the Registrant, c/o BlackRock Advisors, Inc., 345 Park Avenue,
New York, New York 10154 and at the offices of State Street Bank and Trust
Company, the Registrant's Custodian, Transfer Agent and Dividend Disbursing
Agent.
Item 32. Management Services
- -----------------------------
Not Applicable
Item 33. Undertakings
- ----------------------
(1) The Registrant hereby undertakes to suspend the offering of its units
until it amends its prospectus if (a) subsequent to the effective date of its
registration statement, the net asset value declines more than 10 percent from
its net asset value as of the effective date of the Registration Statement or
(b) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.
(2) The Registrant hereby undertakes that (i) for the purpose of
determining any liability under the 1933 Act, the information omitted from the
form of prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the Registrant under
Rule 497(h) under the 1933 Act shall be deemed to be part of this registration
statement as of the time it was declared effective; (ii) for the purpose of
determining any liability under the 1933 Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Not applicable
(4) Not applicable
(5) (a) For the purposes of determining any liability under the
Securities Act of 1933, the information omitted form the form of prospectus
filed as part of a registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant under Rule 497 (h)
under the Securities Act of 1933 shall be deemed to be part of the Registration
Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering thereof.
(6) The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery within two business days of receipt
of a written or oral request, any Statement of Additional Information.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 19th day of
August 1999.
/s/ Ralph L. Schlosstein*
----------------------------------------
Ralph L. Schlosstein
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities on the 19th day of August 1999.
<TABLE>
<CAPTION>
Name Title
<S> <C>
/s/ Andrew F. Brimmer* Trustee
- ---------------------------------
Andrew F. Brimmer
/s/ Richard E. Cavanagh* Trustee
- ---------------------------------
Richard E. Cavanagh
/s/ Kent Dixon* Trustee
- ---------------------------------
Kent Dixon
/s/ Frank J. Fabozzi* Trustee
- ---------------------------------
Frank J. Fabozzi
/s/ Laurence D. Fink* Trustee
- ---------------------------------
Laurence D. Fink
/s/ James Clayburn LaForce, Jr.* Trustee
- ---------------------------------
James Clayburn LaForce, Jr.
/s/ Walter F. Mondale* Trustee
- ---------------------------------
Walter F. Mondale
/s/ Ralph L. Schlosstein* Trustee and President
- --------------------------------- (Principal Executive Officer)
Ralph L. Schlosstein
/s/ Henry Gabbay* Treasurer (Principal
- --------------------------------- Financial and Accounting Officer)
Henry Gabbay
*By: /s/ Karen H. Sabath
-----------------------------
Karen H. Sabath
Attorney-in-fact
</TABLE>
<PAGE>
INDEX TO EXHIBITS
-----------------
(a) Agreement and Declaration of Trust.1
(b) By-Laws.1
(c) Inapplicable.
(d) Form of Specimen Certificate.
(e) Form of Automatic Dividend Reinvestment Plan.
(f) Inapplicable.
(g)(1) Form of Investment Management Agreement.
(g)(2) Form of Sub-Advisory Agreement.
(h)(1) Form of Underwriting Agreement.
(h)(2) Form of Master Agreement among Underwriters.
(h)(3) Form of Salomon Smith Barney Inc. Dealer Letter Agreement.
(i) Inapplicable.
(j) Form of Custodian Agreement.
(k) Form of Registrar, Transfer Agency and Service Agreement.
(l) Opinion and Consent of Counsel to the Trust.*
(m) Inapplicable.
(n) Consent of Independent Public Accountants.*
(o) Inapplicable.
(p) Initial Subscription Agreement. 1
(q) Inapplicable.
(r) Financial Data Schedule.*
(s) Power of Attorney. 1
___________
1 Previously Filed
*To be Filed by Amendment.
<PAGE>
EXHIBIT D
COMMON SHARES OF
BENEFICIAL INTEREST
Number PAR VALUE $.001 Shares
8PS
ORGANIZED UNDER THE LAWS OF
THE STATE OF DELAWARE
THIS CERTIFICATE
IS TRANSFERABLE IN
BOSTON, MA OR IN
NEW YORK, NY
CUSIP 09248R 10 3
SEE REVERSE FOR
CERTAIN DEFINITIONS
The BlackRock Pennsylvania Strategic Municipal Trust
FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF BENEFICIAL INTEREST, $.001 PAR
VALUE, OF
The BlackRock Pennsylvania Strategic Municipal Trust, transferable on the books
of the Trust by the holder hereof in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed. This Certificate and the shares
represented hereby are issued and shall be subject to all of the provisions of
the Declaration of Trust and By - Laws of the Trust, each as from time to time
amended, to all of which the holder by acceptance hereof assents. This
Certificate is not valid until countersigned and registered by the Transfer
Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of its
duly authorized officers
DATED:
/s/ [SIGNATURE ILLEGIBLE] /s/ [SIGNATURE ILLEGIBLE]
SECRETARY PRESIDENT
SEAL COUNTERSIGNED AND REGISTERED;
STATE STREET BANK AND
TRUST COMPANY
(BOSTON)
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED SIGNATURE
<PAGE>
THE BLACKROCK PENNSYLVANIA STRATEGIC MUNICIPAL TRUST
The following abbreviations, when used in the inscription on the face on
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _______ Custodian ___________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right Act ___________________
of survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, ___________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________Shares of
Beneficial Interest represented by the within certificate and do hereby
irrevocably constitute and appoint _____________________________________________
________________________________________________________________________________
Attorney to transfer the said Shares of Beneficial Ownership on the books of the
within named Trust with full power of substitution in the premises.
Dated: _________________________________
_____________________________________
Signature
NOTICE: THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR
ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
By ____________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17 Ad-15.
<PAGE>
EXHIBIT E
THE BLACKROCK PENNSYLVANIA STRATEGIC MUNICIPAL TRUST
AUTOMATIC DIVIDEND REINVESTMENT PLAN
TERMS AND CONDITIONS
Pursuant to the Automatic Dividend Reinvestment Plan (the "Plan") of The
BlackRock Pennsylvania Strategic Municipal Trust (the "Trust"), unless a holder
(each, a "Shareholder") of the Trust's common shares of beneficial interest (the
"Common Shares") otherwise elects, all dividends and capital gain distributions
on such Shareholder's Common Shares will be automatically reinvested by State
Street Bank & Trust Co. ("State Street Bank"), as agent for Shareholders in
administering the Plan (the "Plan Agent"), in additional Common Shares of the
Trust. Shareholders who elect not to participate in the Plan will receive all
dividends and other distributions in cash paid by check mailed directly to the
Shareholder of record (or, if the Common Shares are held in street or other
nominee name, then to such nominee) by State Street Bank as the Dividend
Disbursing Agent. Such participants may elect not to participate in the Plan and
to receive all dividends and capital gain distribu tions in cash by sending
written instructions to State Street Bank, as the Dividend Disbursing Agent, at
the address set forth below. Participation in the Plan is completely voluntary
and may be terminated or resumed at any time without penalty by written notice
if received by the Plan Agent not less than ten days prior to any dividend
record date; otherwise such termination or resumption will be effective with
respect to any subsequently declared dividend or other distribution.
The Plan Agent will open an account for each Shareholder under the Plan in
the same name in which such Shareholder's Common Shares are registered. Whenever
the Trust declares an income dividend or a capital gain distribution
(collectively referred to as "dividends") payable in cash, non-participants in
the Plan will receive cash and participants in the Plan will receive the
equivalent in Common Shares. The Common Shares will be acquired by the Plan
Agent for the participants' accounts, depending upon the circumstances described
below, either (i) through receipt of additional unissued but authorized Common
Shares from the Trust ("newly issued Common Shares") or (ii) by purchase of
outstanding Common Shares on the open market ("open-market purchases") on the
New York Stock Exchange (the "NYSE"), the primary national securities exchange
on which the common shares are traded (the "Exchange"), or elsewhere. If, on the
record date for any dividend, the net asset value per Common Share is equal to
or less than the market price per Common Share (such
<PAGE>
condition being referred to herein as "market premium"), the Plan Agent will
invest the dividend amount in newly issued Common Shares on behalf of the
participants. The number of newly issued Common Shares to be credited to each
participant's account will be determined by dividing the dollar amount of the
dividend by the net asset value per Common Share on the date the Common Shares
are issued. If, on the record date for any dividend, the net asset value per
Common Share is greater than the market value (such condition being referred to
herein as "market discount"), the Plan Agent will invest the dividend amount in
Common Shares acquired on behalf of the participants in open-market purchases.
In the event of a market discount on the record date for any dividend, the
Plan Agent will have until the last business day before the next date on which
the Common Shares trade on an "ex-dividend" basis or 30 days after the record
date for such dividend, whichever is sooner (the "last purchase date"), to
invest the dividend amount in Common Shares acquired in open-market purchases.
It is contemplated that the Trust will pay monthly income dividends. Therefore,
the period during which open-market purchases can be made will exist only from
the record date of each dividend through the date before the next "ex-dividend"
date which typically will be approximately ten days. If, before the Plan Agent
has completed its open-market purchases, the market price of a Common Share
exceeds the net asset value per Common Share, the average per Common Share
purchase price paid by the Plan Agent may exceed the net asset value of the
Common Shares, resulting in the acquisition of fewer Common Shares than if the
dividend had been paid in newly issued Common Shares on the dividend record
date. Because of the foregoing difficulty with respect to open market purchases,
the Plan provides that if the Plan Agent is unable to invest the full dividend
amount in open market purchases during the purchase period or if the market
discount shifts to a market premium during the purchase period, the Plan Agent
may cease making open-market purchases and may invest the uninvested portion of
the dividend amount in newly issued Common Shares at the net asset value per
Common Share at the close of business on the last purchase date.
The Plan Agent maintains all Shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by Shareholders for tax records. Common Shares in the account
of each Plan participant will be held by the Plan Agent on behalf of the Plan
participant.
In the case of Shareholders such as banks, brokers or nominees that hold
Common Shares for others who are the beneficial owners, the Plan Agent will
2
<PAGE>
administer the Plan on the basis of the number of Common Shares certified from
time to time by the record Shareholder and held for the account of beneficial
owners who participate in the Plan.
There will be no brokerage charges with respect to Common Shares issued
directly by the Trust as a result of dividends or capital gains distributions
payable either in Common Shares or in cash. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open-market purchases in connection with the reinvestment of dividends.
VOTING
Each Shareholder proxy will include those Common Shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for Common Shares held
pursuant to the Plan in accordance with the instructions of the participants.
TAXATION
The automatic reinvestment of dividends will not relieve participants of
any federal, state or local income tax that may be payable (or required to be
withheld) on such dividends.
AMENDMENT OF THE PLAN
The Plan may be amended or terminated by the Trust or the Plan Agent. There
is no direct service charge to participants in the Plan; however, the Trust
reserves the right to amend the Plan to include a service charge payable by the
participants. Notice will be sent to Plan participants of any amendments as
soon as practicable after such action by the Trust.
INQUIRIES REGARDING THE PLAN
All correspondence concerning the Plan should be directed to the Plan Agent
at 225 Franklin Street, Boston, MA 02110, 1-800-699-1236.
APPLICABLE LAW
3
<PAGE>
These terms and conditions shall be governed by the laws of the State of
New York without regard to its conflicts of laws provisions.
EXECUTION
To record the adoption of the Plan as of August ___, 1999, the Trust
has caused this Plan to be executed in the name and on behalf of the Trust by a
duly authorized officer.
THE BLACKROCK PENNSYLVANIA
STRATEGIC MUNICIPAL TRUST
A Delaware business trust
__________________________________
By:
Title:
4
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EXHIBIT G.1
INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
AGREEMENT, dated August ___ , 1999, between The BlackRock Pennsylvania
Strategic Municipal Trust (the "Trust"), a Delaware business trust, and
BlackRock Advisors, Inc. (the "Adviser"), a Delaware corporation.
WHEREAS, Adviser has agreed to furnish investment advisory services to
The BlackRock Pennsylvania Strategic Municipal Trust (the "Trust"), a closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "Act");
WHEREAS, this Agreement allows the Adviser to sub-contract invest ment
advisory services with respect to the Trust to an affiliate or third party sub-
adviser pursuant to a sub-investment advisory agreement agreeable to the Trust
and approved in accordance with the provisions of the Act;
WHEREAS, it is contemplated that the Adviser will engage BlackRock
Financial Management, Inc. (the "Sub-Adviser") as sub-adviser to provide it with
sub-advisory services as described in the Sub-Investment Advisory Agreement by
and among the Trust, the Adviser and the Sub-Adviser dated August ___, 1999 and
that the Adviser, from the investment advisory fee it receives from the Trust,
will pay a portion of such fee to the Sub-Adviser for serving as sub-adviser to
the Trust; and
WHEREAS, this Agreement has been approved in accordance with the
provisions of the Act, and the Adviser is willing to furnish such services upon
the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In General. The Adviser agrees, all as more fully set forth
----------
herein, to act as investment adviser to the Trust with respect to the investment
of the Trust's assets and to supervise and arrange for the day-to-day operations
of the Trust and the purchase of securities for and the sale of securities held
in the investment portfolio of the Trust.
2. Duties and Obligations of the Adviser with Respect to Investment
----------------------------------------------------------------
of Assets of the Trust. Subject to the succeeding provisions of this section
- ----------------------
and subject to the direction and control of the Trust's Board of Trustees, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Trust's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Trust and in voting, exercising consents and exercising
<PAGE>
all other rights appertaining to such securities and other assets on behalf of
the Trust; (ii) supervise continuously the investment program of the Trust and
the composition of its investment portfolio; (iii) arrange, subject to the
provisions of paragraph 4 hereof, for the purchase and sale of securities and
other assets held in the investment portfolio of the Trust; (iv) provide
investment research to the Trust and (v) engage an affiliate or third party sub-
adviser to serve as sub-investment adviser for all or a portion of the Trust's
assets, pursuant to a sub-investment advisory agreement agreeable to the Trust
and approved in accordance with the provisions of the Act.
3. Duties and Obligations of Adviser with Respect to the
-----------------------------------------------------
Administration of the Trust. The Adviser also agrees to furnish office
- ---------------------------
facilities and equipment and clerical, bookkeeping and administrative services
(other than such services, if any, provided by the Trust's Custodian Transfer
Agent and other service providers) for the Trust. To the extent requested by the
Trust, the Adviser agrees to provide the following administrative services:
(a) Oversee the determination and publication of the
Trust's net asset value in accordance with the Trust's policy as adopted from
time to time by the Board of Trustees;
(b) Oversee the maintenance by [State Street Bank and Trust
Company] of certain books and records of the Trust as required under Rule 31a-
1(b)(4) of the Act and maintain (or oversee maintenance by such other persons as
approved by the Board of Trustees) such other books and records required by law
or for the proper operation of the Trust;
(c) Oversee the preparation and filing of the Trust's
federal, state and local income tax returns and any other required tax returns;
(d) Review the appropriateness of and arrange for payment
of the Trust's expenses;
(e) Prepare for review and approval by officers of the
Trust financial information for the Trust's semi-annual and annual reports,
proxy statements and other communications with shareholders required or
otherwise to be sent to Trust shareholders, and arrange for the printing and
dissemination of such reports and communications to shareholders;
(f) Prepare for review by an officer of the Trust the
Trust's periodic financial reports required to be filed with the Securities and
Exchange Commission ("SEC") on Form N-SAR and such other reports, forms and
filings, as may be mutually agreed upon;
2
<PAGE>
(g) Prepare reports relating to the business and affairs of
the Trust as may be mutually agreed upon and not otherwise appropriately
prepared by the Trust's custodian, counsel or auditors;
(h) Prepare such information and reports as may be required
by any stock exchange or exchanges on which the Trust's shares are listed;
(i) Make such reports and recommendations to the Board of
Trustees concerning the performance of the independent accountants as the Board
of Trustees may reasonably request or deems appropriate;
(j) Make such reports and recommendations to the Board of
Trustees concerning the performance and fees of the Trust's custodian and
transfer and dividend disbursing agent as the Board of Trustees may reasonably
request or deems appropriate;
(k) Oversee and review calculations of fees paid to the
Trust's service providers;
(l) Oversee the Trust's portfolio and perform necessary
calculations as required under Section 18 of the Act;
(m) Consult with the Trust's officers, independent
accountants, legal counsel, custodian, accounting agent and transfer and
dividend disbursing agent in establishing the accounting policies of the Trust
and monitor financial and shareholder accounting services;
(n) Review implementation of any share purchase programs
authorized by the Board of Trustees;
(o) Determine the amounts available for distribution as
dividends and distributions to be paid by the Trust to its shareholders; prepare
and arrange for the printing of dividend notices to shareholders; and provide
the Trust's dividend disbursing agent and custodian with such information as is
required for such parties to effect the payment of dividends and distributions
and to implement the Trust's dividend reinvestment plan;
(p) Prepare such information and reports as may be required
by any banks from which the Trust borrows funds;
(q) Provide such assistance to the custodian and the
Trust's counsel and auditors as generally may be required to properly carry on
the business and operations of the Trust;
3
<PAGE>
(r) Assist in the preparation and filing of Forms 3, 4, and
5 pursuant to Section 16 of the Securities Exchange Act of 1934, as amended,
and Section 30(f) of the Act for the officers and trustees of the Trust, such
filings to be based on information provided by those persons;
(s) Respond to or refer to the Trust's officers or transfer
agent, shareholder (including any potential shareholder) inquiries relating to
the Trust.
(t) Supervise any other aspects of the Trust's
Administration as may be agreed to by the Trust and the Adviser.
All services are to be furnished through the medium of any directors,
officers or employees of the Adviser or its affiliates as the Adviser deems
appropriate in order to fulfill its obligations hereunder.
The Trust will reimburse the Adviser or its affiliates for all out-of-
pocket expenses incurred by them in connection with the performance of the
administrative services described in this paragraph 3.
4. Covenants. In the performance of its duties under this Agreement,
---------
the Adviser shall at all times conform to, and act in accordance with, any
requirements imposed by:
(a) (i) the provisions of the Act and the Investment
Advisers Act of 1940, as amended, and all applicable Rules and Regulations of
the Securities and Exchange Commission (the "SEC"); (ii) any other applicable
provision of law; (iii) the provisions of the Agreement and Declaration of
Trust and By-Laws of the Trust, as such documents are amended from time to time;
(iv) the investment objectives and policies of the Trust as set forth in its
Registration Statement on Form N-2; and (v) any policies and determinations of
the Board of Trustees of the Trust;
(b) will place orders either directly with the issuer or
with any broker or dealer. Subject to the other provisions of this paragraph, in
placing orders with brokers and dealers, the Adviser will attempt to obtain the
best price and the most favorable execution of its orders. In placing orders,
the Adviser will consider the experience and skill of the firm's securities
traders as well as the firm's financial responsibility and administrative
efficiency. Consistent with this obligation, the Adviser may select brokers on
the basis of the research, statistical and pricing services they provide to the
Trust and other clients of the Adviser or any sub-adviser. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Adviser hereunder. A commission
paid to such brokers may be higher than that which another qualified broker
would have charged for effecting the same trans-
4
<PAGE>
action, provided that the Adviser determines in good faith that such commission
is reasonable in terms either of the transaction or the overall responsibility
of the Adviser and any sub-adviser to the Trust's and their other clients and
that the total commissions paid by the Trust will be reasonable in relation to
the benefits to the Trust over the long-term. In addition, the Adviser is
authorized to take into account the sale of shares of the Trust in allocating
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser or any sub-
adviser), provided that the Adviser believes that the quality of the transaction
and the commission are comparable to what they would be with other qualified
firms. In no instance, however, will the Trust's securities be purchased from or
sold to the Adviser, any sub-adviser or any affiliated person thereof, except to
the extent permitted by the SEC or by applicable law;
(c) will maintain or cause the Sub-Adviser to maintain
books and records with respect to the Trust's securities transactions and will
render to the Sub-Ad viser and the Trust's Board of Trustees such periodic and
special reports as they may request;
(d) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. When the Adviser makes investment recommendations
for the Trust, its investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase or sale for
the Trust's account are customers of the commercial department of its
affiliates; and
(e) will treat confidentially and as proprietary
information of the Trust all records and other information relative to the
Trust, and the Trust's prior, current or potential shareholders, and will not
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where the Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Trust.
5. Services Not Exclusive. Nothing in this Agreement shall prevent
----------------------
the Adviser or any officer, employee or other affiliate thereof from acting as
investment adviser for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Adviser or any of its officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the Adviser
will undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.
5
<PAGE>
6. Books and Records. In compliance with the requirements of Rule
-----------------
31a-3 under the Act, the Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust's request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the Act the records required to be maintained by Rule 31a-1 under the Act.
7. Agency Cross Transactions. From time to time, the Adviser or
-------------------------
brokers or dealers affiliated with it may find themselves in a position to buy
for certain of their brokerage clients (each an "Account") securities which the
Adviser's investment advisory clients wish to sell, and to sell for certain of
their brokerage clients securities which advi sory clients wish to buy. Where
one of the parties is an advisory client, the Adviser or the affiliated broker
or dealer cannot participate in this type of transaction (known as a cross
transaction) on behalf of an advisory client and retain commissions from one or
both parties to the transaction without the advisory client's consent. This is
because in a situation where the Adviser is making the investment decision (as
opposed to a brokerage client who makes his own investment decisions), and the
Adviser or an affiliate is receiving commissions from both sides of the
transaction, there is a potential conflicting division of loyalties and
responsibilities on the Adviser's part regarding the advisory client. The
Securities and Exchange Commission has adopted a rule under the Investment
Advisers Act of 1940, as amended, which permits the Adviser or its affiliates to
participate on behalf of an Account in agency cross transactions if the advisory
client has given written consent in advance. By execution of this Agreement, the
Trust authorizes the Adviser or its affiliates to participate in agency cross
transactions involving an Account. The Trust may revoke its consent at any time
by written notice to the Adviser.
8. Expenses. During the term of this Agreement, the Adviser will
--------
bear all costs and expenses of its employees and any overhead incurred in
connection with its duties hereunder (including the fees and expenses of the
Sub-Adviser) and shall bear the costs of any salaries or trustees fees of any
officers or trustees of the Trust who are affiliated persons (as defined in the
Act) of the Adviser; provided that the Board of Trustees of the Trust may
approve reimbursement to the Adviser of the pro rata portion of the salaries,
bonuses, health insurance, retirement benefits and all similar employment costs
for the time spent on Trust operations (other than the provision of investment
advice and administrative services required to be provided hereunder) of all
personnel employed by the Adviser who devote substantial time to Trust
operations or the operations of other investment companies advised by the
Adviser.
9. Compensation of the Adviser. (a) The Trust agrees to pay to the
---------------------------
Adviser and the Adviser agrees to accept as full compensation for all services
rendered by the Adviser as such, a monthly fee (the "Investment Advisory Fee")
in arrears at an annual rate equal to .60% of the average weekly value of the
Trust's Managed Assets. "Managed Assets" means the total assets of the Trust
minus the sum of accrued liabilities
6
<PAGE>
(other than the aggregate indebtedness constituting financial leverage). For any
period less than a month during which this Agreement is in effect, the fee shall
be prorated according to the proportion which such period bears to a full month
of 28, 29, 30 or 31 days, as the case may be.
(b) The Trust hereby acknowledges that from such Investment
Advisory Fee the Adviser will pay the Sub-Adviser, for serving as sub-adviser, a
fee equal to [an annual rate of 0.35% of the average weekly value of the Trust's
Managed Assets].
(c) For purposes of this Agreement, the Managed Assets of
the Trust shall be calculated pursuant to the procedures adopted by resolutions
of the Trustees of the Trust for calculating the value of the Trust's assets or
delegating such calculations to third parties.
10. Indemnity. (a) The Trust hereby agrees to indemnify the Adviser,
---------
any sub-adviser and each of the Adviser's or sub-adviser's directors, officers,
employees, agents, associates and controlling persons and the directors,
partners, members, officers, employees and agents thereof (including any
individual who serves at the Adviser's or sub-adviser's request as director,
officer, partner, member, trustee or the like of another entity) (each such
person being an "Indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable state
law) reasonably incurred by such Indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which such
Indemnitee may be or may have been involved as a party or otherwise or with
which such Indemnitee may be or may have been threatened, while acting in any
capacity set forth herein or thereafter by reason of such Indemnitee having
acted in any such capacity, except with respect to any matter as to which such
Indemnitee shall have been adjudicated not to have acted in good faith in the
reasonable belief that such Indemnitee's action was in the best interest of the
Trust and furthermore, in the case of any criminal proceeding, so long as such
Indemnitee had no reasonable cause to believe that the conduct was unlawful;
provided, however, that (1) no Indemnitee shall be indemnified hereunder against
any liability to the Trust or its shareholders or any expense of such Indemnitee
arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross
negligence or (iv) reckless disregard of the duties involved in the conduct of
such Indemnitee's position (the conduct referred to in such clauses (i) through
(iv) being some times referred to herein as "disabling conduct"), (2) as to any
matter disposed of by settlement or a compromise payment by such Indemnitee,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best interests of the
Trust and that such Indemnitee appears to have acted in good faith in the
reasonable belief that such Indemnitee's action was in the best interest of the
Trust and did not involve disabling conduct by such Indemnitee and (3) with
respect to any action, suit or other proceeding voluntarily prosecuted by any
7
<PAGE>
Indemnitee as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such Indemnitee was
authorized by a majority of the full Board of Trustees of the Trust.
(b) The Trust shall make advance payments in connection
with the expenses of defending any action with respect to which indemnification
might be sought hereunder if the Trust receives a written affirmation of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Trust
unless it is subsequently determined that such Indemnitee is entitled to such
indemnification and if the trustees of the Trust determine that the facts then
known to them would not preclude indemnification. In addition, at least one of
the following conditions must be met: (A) the Indemnitee shall provide a
security for such Indemnitee-undertaking, (B) the Trust shall be insured against
losses arising by reason of any lawful advance, or (C) a majority of a quorum
consisting of trust ees of the Trust who are neither "interested persons" of the
Trust (as defined in Section 2(a)(19) of the Act) nor parties to the proceeding
("Disinterested Non-Party Trustees") or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the Indemnitee ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by a court or
other body before whom the proceeding was brought that such Indemnitee is not
liable or is not liable by reason of disabling conduct, or (2) in the absence of
such a decision, by (i) a majority vote of a quorum of the Disinterested Non-
Party Trustees of the Trust, or (ii) if such a quorum is not obtainable or, even
if obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion. All determinations that advance payments in
connection with the expense of defending any proceeding shall be authorized
shall be made in accordance with the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these provisions
shall not exclude any other right to which such Indemnitee may be lawfully
entitled.
11. Limitation on Liability. (a) The Adviser will not be liable for
-----------------------
any error of judgment or mistake of law or for any loss suffered by Adviser or
by the Trust in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its duties under this Agreement.
(b) Notwithstanding anything to the contrary contained in
this Agreement, the parties hereto acknowledge and agree that, as provided in
Section 5.1 of Article V of the Declaration of Trust, this Agreement is executed
by the Trustees and/or officers of the Trust,
8
<PAGE>
not individually but as such Trustees and/or officers of the Trust, and the
obligations hereunder are not binding upon any of the Trustees or Shareholders
individually but bind only the estate of the Trust.
12. Duration and Termination. This Agreement shall become effective
------------------------
as of the date hereof and, unless sooner terminated with respect to the Trust as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Trust for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Trust's Board of Trustees or the vote of a majority of the outstanding
voting securities of the Trust at the time outstanding and entitled to vote, and
(b) by the vote of a majority of the Trustees who are not parties to this
Agreement or interested persons of any party to this Agreement, cast in person
at a meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Trust at any time,
without the payment of any penalty, upon giving the Adviser 60 days' notice
(which notice may be waived by the Adviser), provided that such termination by
the Trust shall be directed or approved by the vote of a majority of the
Trustees of the Trust in office at the time or by the vote of the holders of a
majority of the voting securities of the Trust at the time outstanding and
entitled to vote, or by the Adviser on 60 days' written notice (which notice may
be waived by the Trust). This Agreement will also immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person" and "assignment" shall have
the same meanings of such terms in the Act.)
13. Notices. Any notice under this Agreement shall be in writing to
-------
the other party at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on the
earlier of the date actually received or on the fourth day after the postmark
if such notice is mailed first class postage prepaid.
14. Amendment of this Agreement. No provision of this Agreement may
---------------------------
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. Any amendment of this Agreement shall be
subject to the Act.
15. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York for contracts to be
performed entirely therein without reference to choice of law principles
thereof and in accordance with the applicable provisions of the Act.
16. Miscellaneous. The captions in this Agreement are included for
-------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.
9
<PAGE>
17. Counterparts. This Agreement may be executed in counterparts by
------------
the parties hereto, each of which shall constitute an original counterpart, and
all of which, together, shall constitute one Agreement.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
THE BLACKROCK PENNSYLVANIA
STRATEGIC MUNICIPAL TRUST
By:_________________________________
Name:
Title:
BLACKROCK ADVISORS, INC.
By:_________________________________
Name:
Title:
<PAGE>
BlackRock Advisors, Inc.
345 Park Avenue
New York, New York 10154
August ___, 1999
The BlackRock Pennsylvania Strategic Municipal Trust
345 Park Avenue
New York, New York 10154
Gentlemen:
We are writing to confirm our understanding that The BlackRock
Pennsylvania Strategic Municipal Trust (the "Trust") has a nonexclusive,
revocable license to use the word "BlackRock" in its name and that if BlackRock
Advisors, Inc. (the "Adviser") or BlackRock Financial Management Inc. ceases to
be the investment adviser to the Trust, the Trust will cease using such name as
promptly as practicable, making all reasonable efforts to remove "BlackRock"
from its name including calling a special meeting of stockholders.
Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Trust, has
informed us that the provision described above is implied in the Trust's
investment advisory agreement, and that continued use of the name "BlackRock"
if the Adviser ceases to be the investment adviser would probably violate those
provisions of the Investment Company Act of 1940, as amended, that require that
the Trust's name not be misleading.
Execution of this letter agreement on behalf of the Trust will signify
that the Trust understands that it has a nonexclusive, revocable license to the
use of the name "BlackRock."
BLACKROCK ADVISORS, INC.
By:_________________________________________
Name:
Title:
BLACKROCK FINANCIAL MANAGEMENT, INC.
By:______________________________________
Name:
Title:
12
<PAGE>
THE BLACKROCK PENNSYLVANIA
STRATEGIC MUNICIPAL TRUST
By:_______________________________________
Name:
Title:
13
<PAGE>
EXHIBIT G.2
SUB-INVESTMENT ADVISORY AGREEMENT
---------------------------------
AGREEMENT dated as of August ___, 1999, between The BlackRock
Pennsylvania Strategic Municipal Trust, a Delaware business trust (the "Trust"),
BlackRock Advisors, Inc. a Delaware corporation (the "Adviser"), and BlackRock
Financial Management, Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, the Adviser has agreed to furnish investment advisory
services to the Trust, a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Adviser wishes to retain the Sub-Adviser to provide it
with sub-advisory services as described below in connection with Adviser's
advisory activities on behalf of the Trust;
WHEREAS, the advisory agreement between the Adviser and the Trust
dated _______, 1999 (such Agreement or the most recent successor agreement
between such parties relating to advisory services to the Trust is referred to
herein as the "Advisory Agreement") contemplates that the Adviser may sub-
contract invest ment advisory services with respect to the Trust to a sub-
adviser pursuant to a sub-advisory agreement agreeable to the Trust and approved
in accordance with the provisions of the Act; and
WHEREAS, this Agreement has been approved in accordance with the
provisions of the Act, and the Sub-Adviser is willing to furnish such services
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to act
-----------
as sub-adviser with respect to the Trust and the Sub-Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
<PAGE>
2. Services of the Sub-Adviser. Subject to the succeeding
---------------------------
provisions of this section, the oversight and supervision of the Adviser and the
direction and control of the Trust's Board of Trustees, the Sub-Adviser will
supervise the day-to-day operations of the Trust and perform the following
services: (a) act as investment adviser for and manage the investment and
reinvestment of the Trust's assets and in connection therewith have complete
discretion in purchasing and selling securities and other assets for the Trust
and in voting, exercising consents and exercising all other rights appertaining
to such securities and other assets on behalf of the Trust; (b) manage
continuously the investment program of the Trust and the composition of its
investment portfolio; (c) arrange, subject to the provisions of paragraph 3
hereof, for the purchase and sale of securities and other assets held in the
investment portfolio of the Trust; (d) provide investment research and credit
analysis concerning the Trust's investments, (e) determine what portion of the
Trust's assets will be invested in cash, cash equivalents and money market
instruments, (f) place orders for all purchases and sales of the investments
made for the Trust, and (g) maintain the books and records as are required to
support Trust investment operations. At the request of the Adviser, the Sub-
Adviser will also, subject to the oversight and supervision of the Adviser and
the direction and control of the Trust's Board of Trustees, provide to the
Adviser or the Trust any of the facilities and equipment and perform any of the
services described in Section 3 of the Advisory Agreement. In addition, the
Sub-Adviser will keep the Trust and the Adviser informed of developments
materially affecting the Trust and shall, on its own initiative, furnish to the
Trust from time to time whatever information the Sub-Adviser believes
appropriate for this purpose. The Sub-Adviser will periodically communicate to
the Adviser, at such times as the Adviser may direct, information concerning the
purchase and sale of securities for the Trust, including: (a) the name of the
issuer, (b) the amount of the purchase or sale, (c) the name of the broker or
dealer, if any, through which the purchase or sale is effected, (d) the CUSIP
number of the instrument, if any, and (e) such other information as the Adviser
may reason ably require for purposes of fulfilling its obligations to the Trust
under the Advisory Agreement. The Sub-Adviser will provide the services
rendered by it under this Agreement in accordance with the Trust's investment
objectives, policies and restrictions (as currently in effect and as they may be
amended or supplemented from time to time) as stated in the Trust's Prospectus
and Statement of Additional Information and the resolutions of the Trust's Board
of Trustees.
3. Covenants. In the performance of its duties under this Agreement,
---------
the Sub-Adviser shall at all times conform to, and act in accordance with, any
requirements imposed by:
2
<PAGE>
(a) (i) the provisions of the Act and the Investment Advisers Act of
1940, as amended and all applicable Rules and Regulations of the Securities and
Exchange Commission (the "SEC"); (ii) any other applicable provision of law;
(iii) the provisions of the Agreement and Declaration of Trust and By-Laws of
the Trust, as such documents are amended from time to time; (iv) the investment
objectives and policies of the Trust as set forth in its Registration Statement
on Form N-2; and (v) any policies and determinations of the Board of Trustees of
the Trust;
(b) will place orders either directly with the issuer or with any
broker or dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Sub-Adviser will attempt to obtain the best
price and the most favorable execution of its orders. In placing orders, the
Sub-Adviser will consider the experience and skill of the firm's securities
traders as well as the firm's financial responsibility and administrative
efficiency. Consistent with this obligation, the Sub-Adviser may select brokers
on the basis of the research, statistical and pricing services they provide to
the Trust and other clients of the Adviser or the Sub-Adviser. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Sub-Adviser hereunder. A commission
paid to such brokers may be higher than that which another qualified broker
would have charged for effecting the same transaction, provided that the Sub-
Adviser determines in good faith that such commission is reasonable in terms
either of the transaction or the overall responsibility of the Adviser and the
Sub-Adviser to the Trust's and their other clients and that the total
commissions paid by the Trust will be reasonable in relation to the benefits to
the Trust over the long-term. In addition, the Sub-Adviser is authorized to take
into account the sale of shares of the Trust in allocating purchase and sale
orders for portfolio securities to brokers or dealers (including brokers and
dealers that are affiliated with the Adviser or the Sub-Adviser), provided that
the Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no instance,
however, will the Trust's securities be purchased from or sold to the Adviser,
the Sub-Adviser or any affiliated person thereof, except to the extent permitted
by the SEC or by applicable law;
(c) will maintain books and records with respect to the Trust's
securities transactions and will render to the Adviser and the Trust's Board of
Trustees such periodic and special reports as they may request;
3
<PAGE>
(d) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. When the Sub-Adviser makes investment
recommendations for the Trust, its investment advisory personnel will not
inquire or take into consideration whether the issuer of securities proposed for
purchase or sale for the Trust's account are customers of the commercial
department of its affiliates; and
(e) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the Trust, and the
Trust's prior, current or potential shareholders, and will not use such records
and information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in writing
by the Trust, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust.
4. Services Not Exclusive. Nothing in this Agreement shall prevent
----------------------
the Sub-Adviser or any officer, employee or other affiliate thereof from acting
as investment adviser for any other person, firm or corporation, or from
engaging in any other lawful activity, and shall not in any way limit or
restrict the Sub-Adviser or any of its officers, employees or agents from
buying, selling or trading any securities for its or their own accounts or for
the accounts of others for whom it or they may be acting; provided, however,
that the Sub-Adviser will undertake no activities which, in its judgment, will
adversely affect the performance of its obligations under this Agreement.
5. Books and Records. In compliance with the requirements of Rule
-----------------
31a-3 under the Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust's request. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the Act the records required to be maintained by Rule 31a-1 under the Act
(to the extent such books and records are not maintained by the Adviser).
6. Agency Cross Transactions. From time to time, the Sub-Adviser or
-------------------------
brokers or dealers affiliated with it may find themselves in a position to buy
for certain of their brokerage clients (each an "Account") securities which the
4
<PAGE>
Sub-Adviser's investment advisory clients wish to sell, and to sell for certain
of their brokerage clients securities which advisory clients wish to buy. Where
one of the parties is an advisory client, the Adviser or the affiliated broker
or dealer cannot participate in this type of transaction (known as a cross
transaction) on behalf of an advisory client and retain commissions from both
parties to the transaction without the advisory client's consent. This is
because in a situation where the Sub-Adviser is making the investment decision
(as opposed to a brokerage client who makes his own investment decisions), and
the Sub-Adviser or an affiliate is receiving commissions from one or both sides
of the transaction, there is a potential conflicting division of loyalties and
responsibilities on the Sub-Adviser's part regarding the advisory client. The
Securities and Exchange Commission has adopted a rule under the Investment
Advisers Act of 1940, as amended which permits the Sub-Adviser or its affiliates
to participate on behalf of an Account in agency cross transactions if the
advisory client has given written consent in advance. By execution of this
Agreement, the Trust authorizes the Sub-Adviser or its affiliates to
participate in agency cross transactions involving an Account. The Trust may
revoke its consent at any time by written notice to the Sub-Adviser.
7. Expenses. During the term of this Agreement, the Sub-Adviser
--------
will bear all costs and expenses of its employees and any overhead incurred by
the Sub-Adviser in connection with its duties hereunder; provided that the Board
of Trustees of the Trust may approve reimbursement to the Sub-Adviser of the
pro-rata portion of the salaries, bonuses, health insurance, retirement benefits
and all similar employment costs for the time spent on Trust operations (other
than the provision of investment advice and administrative services required to
be provided hereunder) of all personnel employed by the Sub-Adviser who devote
substantial time to the Trust operations or the operations of other investment
companies advised or subadvised by the Sub-Adviser.
8. Compensation.
------------
(a) The Adviser agrees to pay to the Sub-Adviser and the Sub-
Adviser agrees to accept as full compensation for all services rendered by the
Sub-Adviser as such, a monthly fee in arrears at an annual rate equal to 0.35%
of the average weekly value of the Trust's Managed Assets. "Managed Assets"
means the total assets of the Trust minus the sum of accrued liabilities (other
than the aggregate indebtedness constituting financial leverage). For any period
less than a month during which this Agreement is in effect, the fee shall be
prorated according to the
5
<PAGE>
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.
(b) For purposes of this Agreement, the Managed Assets of the
Trust shall be calculated pursuant to the procedures adopted by resolutions of
the Trustees of the Trust for calculating the value of the Trust's assets or
delegating such calculations to third parties.
9. Indemnity.
---------
(a) The Trust hereby agrees to indemnify the Sub-Adviser and
each of the Sub-Adviser's directors, officers, employees, agents, associates and
controlling persons and the directors, partners, members, officers, employees
and agents thereof (including any individual who serves at the Sub-Adviser's
request as director, officer, partner, member, trustee or the like of another
entity) (each such person being an "Indemnitee") against any liabilities and
expenses, including amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees (all as provided in accordance with
applicable state law) reasonably incurred by such Indemnitee in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or investigative body in
which such Indemnitee may be or may have been involved as a party or otherwise
or with which such Indemnitee may be or may have been threatened, while acting
in any capacity set forth herein or thereafter by reason of such Indemnitee
having acted in any such capacity, except with respect to any matter as to which
such Indemnitee shall have been adjudicated not to have acted in good faith in
the reasonable belief that such Indemnitee's action was in the best interest of
the Trust and furthermore, in the case of any criminal proceeding, so long as
such Indemnitee had no reasonable cause to believe that the conduct was
unlawful; provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Trust or its shareholders or any expense
of such Indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith,
(iii) gross negligence or (iv) reckless disregard of the duties involved in the
conduct of such Indemnitee's position (the conduct referred to in such clauses
(i) through (iv) being sometimes referred to herein as "disabling conduct"), (2)
as to any matter disposed of by settlement or a compromise payment by such
Indemnitee, pursuant to a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be provided unless there has
been a determination that such settlement or compromise is in the best interests
of the Trust and that such Indemnitee appears to have acted in good faith in the
reasonable belief that such Indemnitee's action was
6
<PAGE>
in the best interest of the Trust and did not involve disabling conduct by such
Indemnitee and (3) with respect to any action, suit or other proceeding
voluntarily prosecuted by any Indemnitee as plaintiff, indemnification shall be
mandatory only if the prosecution of such action, suit or other proceeding by
such Indemnitee was authorized by a majority of the full Board of Trustees of
the Trust.
(b) The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Trust receives a written affirmation of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to reimburse the Trust unless it is
subsequently determined that such Indemnitee is entitled to such indemnification
and if the trustees of the Trust determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the Indemnitee shall provide a security for such
Indemnitee-undertaking, (B) the Trust shall be insured against losses arising by
reason of any lawful advance, or (C) a majority of a quorum consisting of
trustees of the Trust who are neither "interested persons" of the Trust (as
defined in Section 2(a)(19) of the Act) nor parties to the proceeding
("Disinterested Non-Party Trustees") or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the Indemnitee ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such Indemnitee is not liable by
reason of disabling conduct, or (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-Party Trustees of the Trust,
or (ii) if such a quorum is not obtainable or even, if obtainable, if a majority
vote of such quorum so directs, independent legal counsel in a written opinion.
All determinations that advance payments in connection with the expense of
defending any proceeding shall be authorized shall be made in accordance with
the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these provisions
shall not exclude any other right to which such Indemnitee may be lawfully
entitled.
10. Limitation on Liability.
-----------------------
7
<PAGE>
(a) The Sub-Adviser will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Adviser or by the Trust in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its duties under this Agreement.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that, as provided in Section
5.1 of Article V of the Declaration of Trust, this Agreement is executed by the
Trustees and/or officers of the Trust, not individually but as such Trustees
and/or officers of the Trust, and the obligations hereunder are not binding upon
any of the Trustees or Shareholders individually but bind only the estate of the
Trust.
11. Duration and Termination. This Agreement shall become effective
------------------------
as of the date hereof and, unless sooner terminated with respect to the Trust as
provided herein, shall continue in effect for a period of two years.
Thereafter, if not terminated, this Agreement shall continue in effect with
respect to the Trust for successive periods of 12 months, provided such
continuance is specifically approved at least annually by both (a) the vote of a
majority of the Trust's Board of Trustees or a vote of a majority of the
outstanding voting securities of the Trust at the time outstanding and entitled
to vote and (b) by the vote of a majority of the Trustees, who are not parties
to this Agreement or interested persons (as such term is defined in the Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. Notwithstanding the foregoing, this Agreement may be terminated
by the Trust or the Adviser at any time, without the payment of any penalty,
upon giving the Sub-Adviser 60 days' notice (which notice may be waived by the
Sub-Adviser), provided that such termination by the Trust or the Adviser shall
be directed or approved by the vote of a majority of the Trustees of the Trust
in office at the time or by the vote of the holders of a majority of the voting
securities of the Trust at the time outstanding and entitled to vote, or by the
Sub-Adviser on 60 days' written notice (which notice may be waived by the Trust
and the Adviser), and will terminate automatically upon any termination of the
Advisory Agreement between the Trust and the Adviser. This Agreement will also
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meanings of such terms
in the Act.)
8
<PAGE>
12. Notices. Any notice under this Agreement shall be in writing to
-------
the other party at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on the
earlier of the date actually received or on the fourth day after the postmark if
such notice is mailed first class postage prepaid.
13. Amendment of this Agreement. No provision of this Agreement may
---------------------------
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. Any amendment of this Agreement shall be
subject to the Act.
14. Miscellaneous. The captions in this Agreement are included for
-------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.
15. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York for contracts to be
performed entirely therein without reference to choice of law principles thereof
and in accordance with the applicable provisions of the Act.
16. Counterparts. This Agreement may be executed in counterparts by
------------
the parties hereto, each of which shall constitute an original counterpart, and
all of which, together, shall constitute one Agreement.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers designated below as of the day and
year first above written.
BLACKROCK ADVISORS, INC.
By:______________________________
Name:
Title:
BLACKROCK FINANCIAL MANAGEMENT, INC.
By:______________________________
Name:
Title:
THE BLACKROCK PENNSYLVANIA
STRATEGIC MUNICIPAL TRUST
By:______________________________
Name:
Title:
10
<PAGE>
EXHIBIT (H)(1)
THE BLACKROCK PENNSYLVANIA STRATEGIC MUNICIPAL TRUST
_________ Shares
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
----------------------
________ __, 1999
SALOMON SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the
several Underwriters listed in
Schedule I hereto
c/o SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
The BlackRock Pennsylvania Strategic Municipal Trust, a Delaware
business trust (the "Trust"), proposes, upon the terms and conditions set forth
herein, to issue and sell an aggregate of ______ shares (the "Firm Shares") of
its Common Shares of Beneficial Interest, par value $.001 per share (the "Common
Shares"). The Trust also proposes to grant to the Underwriters (as defined
below), upon the terms and subject to the conditions set forth herein, an option
to purchase up to _________ additional shares (the "Option Shares" and together
with the Firm Shares, the "Shares") of Common Shares. The Shares will be
authorized by, and subject to the terms and conditions of, the Agreement and
Declaration of Trust of the Trust (the "Declaration") in the form filed as an
exhibit to the Registration Statement referred to in Section 1 of this
agreement, as the same may be amended from time to time. The Trust, its
investment adviser, BlackRock Advisors, Inc. ("BAI"), and its investment sub-
adviser, BlackRock Financial Management, Inc. ("BFM") (each, an "Adviser" and
together, the "Advisers"), wish to confirm as follows their agreement with
Salomon Smith Barney Inc. and Prudential Securities Incorporated (the
"Representatives"), as representatives of the several Underwriters listed in
Schedule I hereto (the "Underwriters"), in connection with the purchase of the
Shares by the Underwriters.
<PAGE>
2
Collectively, the Investment Advisory Agreement dated as of _____,
1999 between the Trust and BAI (the "Investment Advisory Agreement"), the Sub-
Advisory Agreement dated as of _____, 1999 between the Trust, BAI and BFM (the
"Sub-Advisory Agreement"), the Custodian Agreement dated as of _____, 1999
between the Trust and State Street Bank and Trust Company (the "Custodian
Agreement") and the Transfer Agency and Dividend Paying Agency Agreement dated
as of _____, 1999 between the Trust and ______ (the "Transfer Agency Agreement")
are hereinafter referred to as the "Trust Agreements." The Investment Advisory
Agreement and the Sub-Advisory Agreement are hereinafter collectively referred
to as the "Advisory Agreements." This Underwriting Agreement is hereinafter
referred to as the "Agreement."
<PAGE>
3
1. Registration Statement and Prospectus. The Trust has prepared and
-------------------------------------
filed in accordance with the provisions of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated under the 1933 Act (the "1933 Act
Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations"
and, together with the 1933 Act Rules and Regulations, the "Rules and
Regulations"), a registration statement on Form N-2, as amended by Pre-Effective
Amendments Nos. 1 and 2 (File Nos. 333-82093 and 811-____) (the "registration
statement"), including a prospectus relating to the Shares. The Trust also has
filed a notification of registration of the Trust as an investment company under
the 1940 Act on Form N-8A (the "1940 Act Notification"). The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as amended at the time it becomes
effective under the 1933 Act or, if the registration statement became effective
under the 1933 Act prior to the execution of this Agreement, as amended or
supplemented at the time it became effective, prior to the execution of this
Agreement, and includes any information deemed to be included by Rule 430A under
the 1933 Act Rules and Regulations. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the registration
statement will be filed under the 1933 Act and must be declared effective before
the offering of the Shares may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as amended by said post-
effective amendment. If the Trust has filed an abbreviated registration
statement to register an additional amount of Shares pursuant to Rule 462(b)
under the 1933 Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall include such Rule 462
Registration Statement. The term "Prospectus" as used in this Agreement means
the prospectus and statement of additional information in the forms included in
the Registration Statement or, if the prospectus and statement of additional
information included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act Rules and Regulations and such information is
included in a prospectus and statement of additional information filed with the
Commission pursuant to Rule 497(h) under the 1933 Act, the term "Prospectus" as
used in this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement as supplemented
by the addition of the information contained in the prospectus filed with the
Commission pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in
this Agreement means the prospectus and statement of additional information
subject to completion in the forms included in the registration statement at the
time of filing of Pre-Effective Amendment No. 1 to the registration statement
with the Commission on July 29, 1999, and as such prospectus and statement of
additional information shall have been amended from time to time prior to the
date of the Prospectus, together with any other prospectus and statement of
additional information relating to the Trust other than the Prospectus approved
in writing by or directly or indirectly prepared by the Trust or the Advisers;
it being understood that the definition of Prepricing Prospectus above shall not
include any Prepricing Prospectus prepared by the Underwriters unless approved
in writing by the Trust or an Adviser. The terms "Registration Statement,"
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements and other information incorporated by reference therein.
<PAGE>
4
The Trust has furnished you with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus.
2. Agreements to Sell and Purchase. (a) The Trust hereby agrees,
-------------------------------
subject to all the terms and conditions set forth herein, to issue and sell to
the Underwriters and, upon the basis of the representations, warranties and
agreements of the Trust and the Advisers herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees severally and not
jointly to purchase from the Trust, at a purchase price of $14.325 per share,
the number of shares of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
(b) The Trust also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Trust herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Trust, at the same purchase price per share
as the Underwriters shall pay for the Firm Shares, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 45th day after the date of
the Prospectus (or, if such 45th day shall be a Saturday or Sunday or a holiday,
on the next business day thereafter when the New York Stock Exchange is open for
trading), up to an aggregate of _______ Option Shares. Option Shares may be
purchased only for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. Upon any exercise of the over-allotment
option, each Underwriter, severally and not jointly, agrees to purchase from the
Trust the number of Option Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) which bears the same proportion
to the number of Option Shares to be purchased by the Underwriters as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto (or such number of Firm Shares increased as set forth in Section 11
hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Trust and the Advisers have been
------------------------
advised by you that the Underwriters propose to make a public offering of their
respective Shares as soon after the Registration Statement and this Agreement
have become effective as in your judgment is advisable and initially to offer
the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
-------------------------------------------
Underwriters of and payment for the Firm Shares and the Option Shares (if the
option provided for in Section 2(b) hereof shall have been exercised on or
before the third business day prior to the Closing Date (as defined below))
shall be made at the office of Simpson Thacher & Bartlett, 425 Lexington Avenue,
New York, NY 10017, or through the facilities of the Depository Trust Company or
another mutually agreeable facility, at 9:30 A.M., New York City time, on
________ __, 1999 (the "Closing Date"). The place of closing for the Firm
Shares and the Option Shares and the Closing Date may be varied by agreement
between you and the Trust.
<PAGE>
5
Delivery to the Underwriters of and payment for any Option Shares to
be purchased by the Underwriters shall be made at the aforementioned office of
Simpson Thacher & Bartlett at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Trust of the Underwriters' determination to purchase a number, specified in such
notice, of Option Shares. The place of closing for any Option Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Trust.
Certificates for the Firm Shares and for any Option Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Option Shares
to be purchased hereunder shall be delivered to you on the Closing Date or the
Option Closing Date, as the case may be, through the facilities of The
Depository Trust Company, against payment of the purchase price therefor in
immediately available funds.
5. Agreements of the Trust and the Advisers. The Trust and the
----------------------------------------
Advisers, jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective under the 1933 Act before the offering of the Shares
may commence, the Trust will endeavor to cause the Registration Statement or
such post-effective amendment to become effective under the 1933 Act as soon as
possible and will advise you promptly and, if requested by you, will confirm
such advice in writing when the Registration Statement or such post-effective
amendment has become effective.
(b) The Trust will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request made by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus (or any amendment or supplement to any of the
foregoing) or for additional information, (ii) of the issuance by the
Commission, the National Association of Securities Dealers, Inc. (the "NASD"),
any state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official of any order suspending the effectiveness
of the Registration Statement, prohibiting or suspending the use of the
Prospectus or any Prepricing Prospectus, or any sales material (as hereinafter
defined), of any notice pursuant to Section 8(e) of the 1940 Act, of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purposes, (iii)
of receipt by the Trust, the Advisers, any affiliate of the Trust or the
Advisers or
<PAGE>
6
any representative or attorney of the Trust or the Advisers of any other
material communication from the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or any
official relating to the Trust (if such communication relating to the Trust is
received by such person within three years after the date of this Agreement),
the Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any sales material (as herein defined) (or any amendment
or supplement to any of the foregoing) or this Agreement or any of the Trust
Agreements and (iv) within the period of time referred to in paragraph (f)
below, of any material adverse change in the condition (financial or other),
business, prospects, properties, net assets or results of operations of the
Trust or the Advisers or of the happening of any other event which makes any
statement of a material fact made in the Registration Statement or the
Prospectus, or any Prepricing Prospectus or any sales materials (as herein
defined) (or any amendment or supplement to any of the foregoing) untrue or
which requires the making of any additions to or changes in the Registration
Statement or the Prospectus, or any Prepricing Prospectus or any sales materials
(as herein defined) (or any amendment or supplement to any of the foregoing) in
order to state a material fact required by the 1933 Act, the 1940 Act or the
Rules and Regulations to be stated therein or necessary in order to make the
statements therein (in the case of a prospectus, in light of the circumstances
under which they were made) not misleading, or of the necessity to amend or
supplement the Registration Statement, the Prospectus, or any Prepricing
Prospectus or any sales material (as herein defined) (or any amendment or
supplement to any of the foregoing) to comply with the 1933 Act, the 1940 Act,
the Rules and Regulations or any other law or order of any court or regulatory
body. If at any time the Commission, the NASD, any state securities commission,
any national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
official shall issue any order suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the Prospectus or any sales
material (as herein defined) (or any amendment or supplement to any of the
foregoing) or suspending the qualification of the Shares for offering or sale in
any jurisdiction, the Trust will use its reasonable best efforts to obtain the
withdrawal of such order at the earliest possible time.
(c) The Trust will furnish to you, without charge, three signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as you may request.
(d) The Trust will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, or any sales
material (as herein defined), of which you shall not previously have been
advised or to which you shall reasonably object after being so advised or (ii)
so long as, in the opinion of counsel for the Underwriters, a Prospectus is
required by the 1933 Act to be delivered in connection with sales by any
Underwriter or any dealer, file any information, documents or
<PAGE>
7
reports to you, as Representatives of the several Underwriters, prior to or
concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Trust
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Trust consents to the
use, in accordance with the provisions of the 1933 Act and with the state
securities or blue sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by dealers, prior to the date of the Prospectus,
of each Prepricing Prospectus so furnished by the Trust.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the 1933 Act to be
delivered in connection with sales by any Underwriter or any dealer, the Trust
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Trust consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the 1933 Act and with the state securities or blue sky laws of the
jurisdictions in which the Shares are offered by the several Underwriters and by
all dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the 1933 Act to be delivered in connection with sales by any
Underwriter or any dealer. If during such period of time any event shall occur
that in the judgment of the Trust or in the opinion of counsel for the
Underwriters is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Trust will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will expeditiously furnish to the Underwriters and
dealers, without charge, a reasonable number of copies thereof. In the event
that the Trust and you, as Representatives of the several Underwriters, agree
that the Registration Statement or the Prospectus should be amended or
supplemented, the Trust, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Trust will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or blue sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Trust be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
<PAGE>
8
(h) The Trust will make generally available to its security holders
an earnings statement, which need not be audited, covering a twelve-month period
ending not later than 15 months after the effective date of the Registration
Statement as soon as practicable after the end of such period, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 of the 1933 Act Rules and Regulations.
(i) During the period of five years hereafter, the Trust will furnish
to you (i) as soon as available, a copy of each report of the Trust mailed to
shareholders or filed with the Commission or furnished to the New York Stock
Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from time to
time such other information concerning the Trust as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
you terminating this Agreement pursuant to Section 12 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Trust or the Advisers to comply with the terms or
fulfill any of the conditions of this Agreement required to be complied with or
fulfilled by them, the Trust and the Advisers, jointly and severally, agree to
reimburse the Representatives for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.
(k) The Trust will apply the net proceeds from the sale of the Firm
Shares, and of the Option Shares, if any, in accordance with the description set
forth in the Prospectus and in such a manner as to comply with the investment
objectives, policies and restrictions of the Trust as described in the
Prospectus, as the same may be amended from time to time.
(l) The Trust will timely file the requisite copies of the Prospectus
with the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules
and Regulations, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and
will advise you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Trust will not sell,
contract to sell or otherwise dispose of any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or grant any
options or warrants to purchase Common Shares, for a period of 180 days after
the date of the Prospectus, without the prior written consent of Salomon Smith
Barney Inc.; provided, however, that the Trust may issue Common Shares pursuant
to any dividend reinvestment plan of the Trust in effect on the date hereof.
(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Trust nor the Advisers have taken, nor
will any of them take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in
<PAGE>
9
stabilization or manipulation of the price of the Shares or any other securities
issued by the Trust to facilitate the sale or resale of the Shares.
(o) The Trust will use its reasonable best efforts to have the Shares
listed, subject to notice of issuance, on the NYSE concurrently with the
effectiveness of the registration statement.
(p) The Trust will comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code") to qualify as a
regulated investment company under the Code.
(q) The Trust and the Advisers will use their reasonable best efforts
to perform all of the agreements required of them and discharge all conditions
of theirs to closing as set forth in this Agreement.
6. Representations and Warranties of the Trust and the Advisers. The
------------------------------------------------------------
Trust and the Advisers, jointly and severally, represent and warrant to each
Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied
when so filed in all material respects with the provisions of the 1933 Act, the
1940 Act and the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus or the Prospectus.
(b) The registration statement in the form in which it became or
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 497 of the 1933
Act Rules and Regulations and the 1940 Act Notification when originally filed
with the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and Regulations, as
applicable, and did not or will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to statements in or
omissions from the registration statement or the Prospectus made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Trust in writing by or on behalf of any Underwriter through you expressly
for use therein.
<PAGE>
10
(c) All the shares of beneficial interest of the Trust outstanding as
of the date hereof have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights; the Shares
have been duly authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares upon the
issuance thereof by the Trust, and will conform to the description thereof in
the Registration Statement and the Prospectus (and any amendment or supplement
to either of them); and the capital stock of the Trust conforms to the
description thereof in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them).
(d) Except for the Option Shares, shares to be issued pursuant to the
Trust's dividend reinvestment plan and as otherwise described in the Prospectus,
there are no outstanding options, warrants or other rights calling for the
issuance of, or any commitment, plan or arrangement to issue, any shares of
capital stock of the Trust or any security convertible into or exchangeable or
exercisable for capital stock of the Trust.
(e) The Trust is a business trust duly organized and validly existing
in good standing under the laws of the State of Delaware with full business
trust power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Trust; and the Trust has no subsidiaries.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Trust or the Advisers, threatened, against the Trust, or to
which the Trust or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) but are not described as required, and there are
no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus (and
any amendment or supplement to either of them) or to be filed as an exhibit to
the Registration Statement that are not described or filed as required by the
1933 Act, the 1940 Act or the Rules and Regulations.
(g) The Trust is not in violation of the Declaration or its bylaws
(the "Bylaws"), or other organizational documents or of any law, ordinance,
administrative or governmental rule or regulation applicable to the Trust or of
any decree of the Commission, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or governmental agency,
body or official having jurisdiction over the Trust, or in default in the
performance of any material obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any material
agreement, indenture,
<PAGE>
11
lease or other instrument to which the Trust is a party or by which it or any of
its properties may be bound.
(h) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Trust Agreements by the
Trust, nor the consummation by the Trust of the transactions contemplated hereby
or thereby (A) requires any consent, approval, authorization or other order of,
or registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may have been obtained prior to the date hereof and
such as may be required for compliance with the state securities or blue sky
laws of various jurisdictions which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Declaration, the Bylaws or other
organizational documents of the Trust or (B) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any material
agreement, indenture, lease or other instrument to which the Trust is a party or
by which it or any of its properties may be bound, or materially violates or
will materially violate any material statute, law, regulation or judgment,
injunction, order or decree applicable to the Trust or any of its properties, or
will result in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Trust pursuant to the terms of
any agreement or instrument to which it is a party or by which it may be bound
or to which any of its property or assets is subject. The Trust is not subject
to any order of any court or of any arbitrator, governmental authority or
administrative agency.
(i) The accountants, Deloitte & Touche LLP, who have certified or
shall certify the financial statements included or incorporated by reference in
the Registration Statement and the Prospectus (or any amendment or supplement to
either of them) are independent public accountants as required by the 1933 Act,
the 1940 Act and the Rules and Regulations.
(j) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them), present
fairly the financial position of the Trust on the basis stated or incorporated
by reference in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
included in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) are accurately presented.
(k) The execution and delivery of, and the performance by the Trust
of its obligations under, this Agreement and the Trust Agreements have been duly
and validly authorized by the Trust, and this Agreement and the Trust Agreements
have been duly executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties thereto, each
constitutes the valid and legally binding agreement of the Trust, enforceable
against the Trust in accordance with its terms, except as rights to indemnity
and contribution
<PAGE>
12
hereunder and thereunder may be limited by federal or state securities laws, and
subject to the qualification that the enforceability of the Trust's obligations
hereunder and thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(l) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
the Trust has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Trust, and there has not been any change in the capital stock,
or material increase in the short-term debt or long-term debt, of the Trust, or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Trust, whether or not arising in the ordinary
course of business.
(m) The Trust has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares, will
not distribute any offering material in connection with the offering and sale of
the Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials permitted by the 1933 Act, the 1940 Act or the
Rules and Regulations.
(n) The Trust has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), subject
to such qualifications as may be set forth in the Prospectus; the Trust has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Trust under any such permit, subject in each
case to such qualification as may be set forth in the Prospectus (and any
amendment or supplement thereto); and, except as described in the Prospectus
(and any amendment or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Trust.
(o) The Trust maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization and with the
applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and
the Code; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain accountability for assets and to maintain compliance with the
books and records requirements under the 1940 Act and the 1940 Act Rules and
Regulations; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
<PAGE>
13
(p) To the Trust's knowledge, neither the Trust nor any employee or
agent of the Trust has made any payment of funds of the Trust or received or
retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(q) No holder of any security of the Trust has any right to require
registration of any security of the Trust because of the filing of the
registration statement or consummation of the transactions contemplated by this
Agreement.
(r) The Trust, subject to the registration statement having been
declared effective and the filing of the Prospectus under Rule 497 under the
1933 Act Rules and Regulations, has taken all required action under the 1933
Act, the 1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(s) The conduct by the Trust of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of any
patents, patent licenses, trademarks, service marks or trade names which it does
not own, possess or license.
(t) The Trust is registered under the 1940 Act and the 1940 Act Rules
and Regulations as a closed-end, non-diversified management investment company
and the 1940 Act Notification has been duly filed with the Commission and, at
the time of filing thereof and any amendment or supplement thereto, conformed in
all material respects with all applicable provisions of the 1940 Act and the
1940 Act Rules and Regulations; no order of suspension or revocation of such
registration under the 1940 Act and the 1940 Act Rules and Regulations has been
issued or proceedings therefor initiated or, to the knowledge of the Trust or
either of the Advisers, threatened by the Commission. The provisions of the
Declaration and Bylaws, and the investment policies and restrictions described
in the Registration Statement and the Prospectus, comply in all material
respects with the requirements of the 1940 Act and the 1940 Act Rules and
Regulations. The Trust is, and at all times through the completion of the
transactions contemplated hereby, will be, in compliance in all material
respects with the terms and conditions of the 1933 Act and the 1940 Act. No
person is serving or acting as an officer, director or investment adviser of the
Trust except in accordance in all material respects with the provisions of the
1940 Act and the 1940 Act Rules and Regulations and the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), and the rules and regulations of the
Commission promulgated under the Advisers Act (the "Advisers Act Rules and
Regulations").
(u) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Trust has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Trust to facilitate the sale or resale of the Shares,
and the Trust is not aware of any such action taken or to be taken by any
affiliates of the Trust who are not underwriters or dealers participating in the
offering of the Shares.
<PAGE>
14
(v) All advertising, sales literature or other promotional material
(including Aprospectus wrappers," "broker kits," "road show slides" and "road
show scripts") authorized in writing by or prepared by the Trust or the Advisers
for use in connection with the offering and sale of the Shares (collectively,
"sales material") complied and comply in all material respects with the
applicable requirements of the 1933 Act, the 1940 Act, the Rules and Regulations
and the rules and interpretations of the NASD and no such sales material
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(w) Each of the Trust Agreements and the Trust's and the Advisers'
obligations under this Agreement and each of the Trust Agreements to which it is
a party comply in all material respects with all applicable provisions of the
1933 Act, the 1940 Act, the Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations.
(x) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director of
the Trust is an "interested person" (as defined in the 1940 Act) of the Trust or
an "affiliated person" (as defined in the 1940 Act) of any Underwriter.
(y) The Shares have been duly authorized for listing, subject to
official notice of issuance, on the NYSE and the Trust's registration statement
on Form 8-A under the 1934 Act has become effective.
(z) The Trust believes, after reasonable inquiry, that each supplier,
vendor, customer or financial service organization used by the Trust has a
program reasonably designed to address on a timely basis the risk that its
computer hardware and software may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates after
December 31, 1999 (the "Year 2000 Problem"), except to the extent that a failure
by any such supplier, vendor, customer or financial service organization to have
such a program would not have a material adverse effect on the Trust. The Trust
is in compliance in all material respects with the Commission's Release No. 33-
7558 dated July 29, 1998 related to Year 2000 compliance.
7 Representations and Warranties of the Advisers. BAI and BFM,
----------------------------------------------
jointly and severally, represent and warrant to each Underwriter that:
(a) Each of the Advisers is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and each is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or to qualify does not have a material
<PAGE>
15
adverse effect on the condition (financial or other), business, prospects,
properties, net assets or results of operations of such Adviser or on the
ability of such Adviser to perform its obligations under this Agreement and the
Advisory Agreements to which it is a party.
(b) Each of the Advisers is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Advisory Agreements to which it is a party
for the Trust as contemplated by the Prospectus (or any amendment or supplement
thereto). There does not exist any proceeding which might adversely affect the
registration of either Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of each Adviser, threatened against such Adviser, or to which such
Adviser or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus (or any amendment or supplement
to either of them) but are not described as required or that may reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of such Adviser or on the ability of such Adviser to perform its
obligations under this Agreement and the Advisory Agreements to which it is a
party.
(d) Neither the execution, delivery or performance of this Agreement
or the Advisory Agreements by each Adviser which is a party thereto, nor the
consummation by each Adviser of the transactions contemplated hereby or thereby
(A) requires either Adviser to obtain any consent, approval, authorization or
other order of, or registration or filing with, the Commission, the NASD, any
state securities commission, any national securities exchange, any arbitrator,
any court, regulatory body, administrative agency or other governmental body,
agency or official or conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, the certificate of incorporation or
bylaws, or other organizational documents, of such Adviser or (B) conflicts or
will conflict with or constitutes or will constitute a breach of or a default
under, any material agreement, indenture, lease or other instrument to which
either Adviser is a party or by which either Adviser or any of its properties
may be bound, or materially violates or will materially violate any material
statute, law, regulation or judgment, injunction, order or decree applicable to
either Adviser or any of its properties or will result in the creation or
imposition of any material lien, charge or encumbrance upon any property or
assets of either Adviser pursuant to the terms of any agreement or instrument
to which it is a party or by which it may be bound or to which any of the
property or assets of either Adviser is subject. Neither Adviser is subject to
any order of any court or of any arbitrator, governmental authority or
administrative agency.
(e) The execution and delivery of, and the performance by each
Adviser of its respective obligations under, this Agreement and the Advisory
Agreements to which it is a party have been duly and validly authorized by such
Adviser, and this Agreement and the Advisory Agreements have been duly executed
and delivered by such Adviser and, assuming due authorization, execution and
delivery by the other parties thereto, each constitutes the valid and
<PAGE>
16
legally binding agreement of such Adviser, enforceable against such Adviser in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws, and subject to the
qualification that the enforceability of the Trust's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles.
(f) Each Adviser has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in
the Prospectus (or any amendment or supplement thereto) and under this Agreement
and the Advisory Agreements to which it is a party.
(g) The description of each Adviser in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them) complied and
comply in all material respects with the provisions of the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) This Agreement and each of the Advisory Agreements comply in all
material respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(i) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
neither Adviser has incurred any liability or obligation, direct or contingent,
or entered into any transaction, not in the ordinary course of business, that is
material to either Adviser or the Trust, and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of either Adviser, whether or not arising in the ordinary course of business, or
which, in each case, could have a material adverse effect on the ability of
either Adviser to perform its respective obligations under this Agreement and
the Advisory Agreements to which it is a party.
(j) Each of the Advisers has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto); each of
the Advisers has fulfilled and performed all its material obligations with
respect to such permits and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of either Adviser under any such
permit.
<PAGE>
17
(k) Except as stated in this Agreement and in the Prospectus (and in
any amendment or supplement thereto), neither Adviser has taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Trust to facilitate the sale or resale of the
Shares, and neither Adviser is aware of any such action taken or to be taken by
any affiliates of the Advisers who are not underwriters or dealers participating
in the offering of the Shares.
8 Indemnification and Contribution. (a) The Trust and the
--------------------------------
Advisers, jointly and severally, agree to indemnify and hold harmless you and
each other Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation), joint or several, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prepricing Prospectus or in the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such Underwriter furnished in writing to the Trust by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the 1933
Act and the 1933 Act Rules and Regulations, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such Prepricing Prospectus was corrected in the Prospectus, provided that the
Trust has delivered the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Trust or the
Advisers may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Trust or the Advisers, such Underwriter or
such controlling person shall promptly notify the Trust or the Advisers, and the
Trust or the Advisers shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the Trust or the Advisers have agreed in
writing to pay such fees and expenses, (ii) the Trust and the Advisers
<PAGE>
18
have failed to assume the defense and employ counsel, or (iii) the named parties
to any such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Trust or the Advisers
and such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and the Trust or the
Advisers by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the Trust and the Advisers shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Trust and the Advisers
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by the Representatives, and that all such fees and expenses shall be
reimbursed as they are incurred. The Trust and the Advisers shall not be liable
for any settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Trust and the Advisers agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Trust and the Advisers, their directors, any officers who
sign the Registration Statement, and any person who controls the Trust or the
Advisers within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, to the same extent as the foregoing indemnity from the Trust and the
Advisers to each Underwriter, but only with respect to information relating to
such Underwriter furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against the Trust or the Advisers,
any of their directors, any such officer, or any such controlling person based
on the Registration Statement, the Prospectus or any Prepricing Prospectus, or
any amendment or supplement thereto, and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph (c), such Underwriter
shall have the rights and duties given to the Trust and the Advisers by
paragraph (b) above (except that if the Trust or the Advisers shall have assumed
the defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such Underwriter=s expense), and
the Trust and the Advisers, their directors, any such officer, and any such
controlling person shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which the Underwriters may otherwise have.
<PAGE>
19
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Advisers on the one hand (treated jointly for this purpose as one
person) and the Underwriters on the other hand from the offering of the Shares,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Trust and the Advisers on the one hand (treated jointly for this purpose as
one person) and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Trust and the Advisers on the one hand (treated jointly
for this purpose as one person) and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Trust bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The Trust and the
Advisers agree that as between the Trust, BAI and BFM (and solely for the
purpose of allocating among such parties the total amount to be contributed by
each of them to one another and without prejudice to the right of the
Underwriters to receive contributions from the Trust and the Advisers under this
Section 8(d) on a joint and several basis) the relative benefits received by the
Trust, on the one hand, and BAI and BFM, on the other hand, shall be deemed to
be in the same proportion that the total net proceeds from the offering (before
deducting expenses) received by the Trust bear to the present value of the
future revenue stream to be generated by the advisory fee to be paid by the
Trust to BAI pursuant to the Investment Advisory Agreement. The relative fault
of the Trust and the Advisers on the one hand (treated jointly for this purpose
as one person) and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust and the Advisers on the one hand
(treated jointly for this purpose as one person) or by the Underwriters on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The Trust, the Advisers and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by a pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which such
total price of the
<PAGE>
20
Shares underwritten by it and distributed to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 8 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 11
hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Trust and the Advisers set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Trust, the Advisers, their directors or
officers, or any person controlling the Trust or the Advisers, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Trust, the Advisers, their directors or officers, or any
person controlling the Trust or the Advisers, shall be entitled to the benefits
of the indemnity, contribution, and reimbursement agreements contained in this
Section 8.
9 Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares and the Option Shares, as the
case may be, hereunder are subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 497 and 430A under the 1933 Act and the 1933
Act Rules and Regulations shall have been timely made; no stop order suspending
the effectiveness of the Registration Statement or order pursuant to Section
8(e) of the 1940 Act shall have been issued and no proceeding for those purposes
shall have been instituted or, to the knowledge of the Trust, the Advisers or
any Underwriter, threatened by the Commission, and any request of the
<PAGE>
21
Commission for additional information (to be included in the registration
statement or the prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change or any development involving a prospective
change in or affecting the condition (financial or other), business, prospects,
properties, net assets, or results of operations of the Trust or the Advisers
not contemplated by the Prospectus, which in your opinion, as Representatives of
the several Underwriters, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Trust or
the Advisers or any officer or director of the Trust or the Advisers which makes
any statement made in the Prospectus untrue or which, in the opinion of the
Trust and its counsel or the Underwriters and their counsel, requires the making
of any addition to or change in the Prospectus in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion, as Representatives of the several
Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Trust, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, in form and substance satisfactory to you and to the effect that:
(i) The Trust is a business trust duly organized and
validly existing in good standing under the laws of the State of
Delaware with full business trust power and authority to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus (and any amendment or
supplement to either of them), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the
failure to so register or qualify does not have a material adverse
effect on the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Trust; the
Trust has no subsidiaries;
(ii) The [authorized and outstanding capital stock of the
Trust is as set forth under the caption ["Financial Statements"] in
the Prospectus; and the] authorized capital stock of the Trust
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Shares";
(iii) There were no shares of capital stock of the Trust
outstanding prior to the issuance of the Shares, except _____ shares
of beneficial interest owned of record by ____, which shares have been
duly authorized and validly issued, and are fully paid and
nonassessable;
<PAGE>
22
(iv) The Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive, or to the best knowledge
of such counsel after reasonable inquiry, similar rights that entitle
or will entitle any person to acquire any Shares upon the issuance
thereof by the Trust, and will conform to the description thereof
contained in the Prospectus under the caption ADescription of Shares--
Common Shares";
(v) The form of certificates for the Shares conforms to
the requirements of Delaware law;
(vi) The Registration Statement and all post-effective
amendments, if any, have become effective under the 1933 Act and the
1933 Act Rules and Regulations and, to the best knowledge of such
counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement or order pursuant to
Section 8(e) of the 1940 Act has been issued and no proceedings for
that purpose are pending before or contemplated by the Commission; and
any required filing of the Prospectus pursuant to Rule 497 of the 1933
Act Rules and Regulations has been made in accordance with Rule 497;
(vii) The Trust has business trust power and authority to
enter into this Agreement and each of the Trust Agreements and to
issue, sell and deliver the Shares to the Underwriters as provided
herein, and this Agreement and each of the Trust Agreements have been
duly authorized, executed and delivered by the Trust and each is a
valid and legally binding agreement of the Trust, enforceable against
the Trust in accordance with its terms, except as rights to indemnity
and contribution hereunder and thereunder may be limited by Federal or
state securities laws or principles of public policy and subject to
the qualification that the enforceability of the Trust's obligations
hereunder and thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general
equitable principles;
(viii) The Trust is not in violation of the Declaration or
Bylaws, or other organizational documents, and to the best knowledge
of such counsel after reasonable inquiry, is not in default in the
performance of any material obligation, agreement or condition
contained in any bond, debenture, note or other evidence of
indebtedness, or in any material agreement, indenture, lease or other
instrument to which the Trust is a party or by which it or any of its
properties may be bound;
(ix) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement and the Trust
Agreements by the Trust, nor the consummation by the Trust of the
transactions contemplated hereby
<PAGE>
23
and thereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Declaration or Bylaws,
or other organizational documents, of the Trust or any agreement,
indenture, lease or other instrument to which the Trust is a party or
by which it or any of its properties is bound, or will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust, nor will any such action result in
any violation of any statute, law, regulation or judgement (assuming
compliance with all applicable state securities or blue sky laws),
injunction, order or decree applicable to the Trust or any of its
properties;
(x) No consent, approval, authorization or other order of, or
registration or filing with, the Commission, the NASD, any national
securities exchange, or, to the best of such counsel's knowledge after
reasonable inquiry, any state securities commission, any arbitrator,
any court, regulatory body, administrative agency or other
governmental body, agency, or official is required on the part of the
Trust (except such as may have been obtained prior to the date hereof
and such as may be required for compliance with the state securities
or blue sky laws of various jurisdictions) for the valid issuance and
sale of the Shares to the Underwriters as contemplated by this
Agreement, the execution, delivery and performance by the Trust of
this Agreement and the Trust Agreements or the consummation of the
transactions contemplated hereby and thereby;
(xi) The 1940 Act Notification, the Registration Statement,
the Prospectus and any supplements or amendments thereto (except for
the financial statements and the notes thereto and the schedules and
other financial and statistical data included therein, as to which
such counsel need not express any opinion) comply in all material
respects with the requirements of the 1933 Act, the 1940 Act and the
Rules and Regulations;
(xii) To the best knowledge of such counsel after reasonable
inquiry, (A) other than as described in the Registration Statement or
Prospectus (or any amendment or supplement to either of them), there
are no legal or governmental proceedings pending or threatened against
the Trust, or to which the Trust or any of its properties is subject,
which are required to be described in the Registration Statement or
Prospectus (or any amendment or supplement to either of them) and (B)
there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement to either
of them) or to be filed as an exhibit to the Registration Statement
that are not described or filed as required, as the case may be;
(xiii) To the best knowledge of such counsel after reasonable
inquiry, the Trust is not in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Trust or of any decree of the Commission, the
<PAGE>
24
NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or governmental agency, body or
official having jurisdiction over the Trust;
(xiv) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents, or refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown;
(xv) Each of the Trust Agreements and the Trust's and the
Advisers' obligations under this Agreement and each of the Trust
Agreements to which it is a party comply in all material respects with
all applicable provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the Rules and Regulations and the Advisers Act Rules and
Regulations;
(xvi) The Trust is duly registered with the Commission under
the 1940 Act and the 1940 Act Rules and Regulations as a closed-end,
[non-]diversified management investment company and, to the best
knowledge of such counsel after reasonable inquiry, no order of
suspension or revocation of such registration under the 1940 Act and
the 1940 Act Rules and Regulations has been issued or proceedings
therefor initiated or threatened by the Commission; the provisions of
the Declaration and Bylaws, and the investment policies and
restrictions described in the Registration Statement and the
Prospectus, comply in all material respects with the requirements of
the 1940 Act and the 1940 Act Rules and Regulations, and the Trust has
taken all required action under the 1933 Act and the 1940 Act and the
Rules and Regulations to make the public offering and consummate the
sale of the Shares as contemplated by this Agreement;
(xvii) The Trust has full business trust power and authority,
and such permits, licenses, franchises and authorizations of
governmental or regulatory authorities (except where the failure so to
have any such permits, licenses, franchises and authorizations,
individually or in the aggregate, would not have a material adverse
effect on the business, properties, operations or financial condition
of the Trust), as are necessary to own its properties and to conduct
its business in the manner described in the Prospectus (and any
amendment or supplement thereto);
(xviii) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance
of, and such counsel does not know of any commitment, plan or
arrangement to issue, any shares of capital stock of the Trust or any
security convertible into or exchangeable or exercisable for capital
stock of the Trust; and no holder of any security of the Trust has any
right to require registration of Common Shares, shares of preferred
stock or any
<PAGE>
25
other security of the Trust because of the filing of the registration
statement or consummation of the transactions contemplated by this
Agreement; and
(xix) The Shares have been duly authorized for listing, subject
to official notice of issuance, on the NYSE.
(xx) Such counsel shall also state that, while they have not
themselves checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, except to the limited extent
stated in paragraphs (iii), (v) and (xv) above, in the course of their
review and discussion of the contents of the Registration Statement
and Prospectus with certain officers and employees of the Trust and
its independent accountants and special Pennsylvania counsel for the
Trust, no facts have come to their attention which cause them to
believe that the Registration Statement or any amendment or supplement
thereto (except as to any financial statements or other financial data
included in the Registration Statement or any such amendment or
supplement, as to which they express no belief), as of its effective
date, 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 contained therein not misleading or that the
Prospectus or any amendment or supplement thereto (except as to any
financial statements or other financial data included in the
Prospectus or any such amendment or supplement, as to which they
express no belief), as of its issue date and as of the Closing Date or
the Option Closing Date, as the case may be, 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
contained therein, in the light of the circumstances under which they
were made, not misleading.
(d) You shall have received on the Closing Date an opinion of
_________, counsel for the Advisers, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, in form and
substance satisfactory to you and to the effect that:
(i) Each of the Advisers is a corporation duly incorporated
and validly existing in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement to either of them), and each is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure to so register or qualify does not have a
material adverse effect on the condition (financial or other),
business, prospects, properties, net assets or results of operations
of such Adviser
<PAGE>
26
to perform its obligations under this Agreement and the Advisory
Agreements to which it is a party;
(ii) Each of the Advisers is duly registered with the
Commission as an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and
Regulations, the 1940 Act or the 1940 Act Rules and Regulations from
acting under the Advisory Agreements to which it is a party for the
Trust as contemplated by the Prospectus (or any amendment or
supplement thereto); and, to the best knowledge of such counsel after
reasonable inquiry, there does not exist any proceeding or any facts
or circumstances the existence of which could lead to any proceeding
which might adversely affect the registration of either Adviser with
the Commission;
(iii) Each of the Advisers has corporate power and authority to
enter into this Agreement and the Advisory Agreements to which it is a
party, and this Agreement and the Advisory Agreements to which each
Adviser is a party have been duly authorized, executed and delivered
by each Adviser which is a party thereto and each is a valid and
legally binding agreement of such Adviser, enforceable against such
Adviser in accordance with its terms except as rights to indemnity and
contribution hereunder and thereunder may be limited by Federal or
state securities laws or principles of public policy and subject to
the qualification that the enforceability of the Advisers' obligations
hereunder and thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general
equitable principles;
(iv) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreements by each Adviser which is a party
thereto, nor the consummation by each Adviser of the transactions
contemplated hereby and thereby conflicts or will conflict with, or
constitutes or will constitute a breach of or default under, the
certificate of incorporation or bylaws, or other organizational
documents, of such Adviser or any agreement, indenture, lease or other
instrument to which either Adviser is a party or by which either
Adviser or any of its properties is bound, or will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of either Adviser, nor will any such action result
in any violation of any existing statute, law, regulation or judgment,
injunction, order or decree applicable to either Adviser or any of its
properties;
(v) No consent, approval, authorization or other order of, or
registration or filing with, the Commission, the NASD, any state
securities commission, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency, or official is required on the part of
either Adviser for the execution, delivery and performance of this
Agreement or the Advisory Agreements to which it is a party, or the
<PAGE>
27
consummation by such Adviser of the transactions contemplated hereby
and thereby;
(vi) To the best knowledge of such counsel after reasonable
inquiry, there are no legal or governmental proceedings pending or
threatened against either Adviser or to which either Adviser or any of
its properties is subject, which are required to be described in the
Registration Statement or the Prospectus (or any amendment or
supplement to either of them) but are not described as required or
which may reasonably be expected to involve a prospective material
adverse change in the condition (financial or other), business,
prospects, properties, net assets or results of operations of either
Adviser or on the ability of either Adviser to perform its obligations
under this Agreement and the Advisory Agreements to which it is a
party;
(vii) The obligations of each of the Advisers under this
Agreement and the Advisory Agreements to which it is a party comply in
all material respects with all applicable provisions of the 1940 Act,
the 1940 Act Rules and Regulations, the Advisers Act and the Advisers
Act Rules and Regulations;
(viii) Each of the Advisers has full corporate power and
authority, and such permits, licenses, franchises and authorizations
of governmental or regulatory authorities as are necessary to own its
properties and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto), and to perform
its obligations under the Advisory Agreements to which it is a party;
and
(ix) Such counsel shall also state that the description of
each of the Advisers contained in the Registration Statement (and any
amendment or supplement thereto) does not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein
not misleading and that the description of the Advisers contained in
the Prospectus or any amendment or supplement thereto, as of its issue
date and as of the Closing Date or the Option Closing Date, as the
case may be, does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading.
(e) You shall have received on the Closing Date an opinion of Ballard
Spahr Andrews & Ingersoll, special Pennsylvania counsel for the Trust, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, in form and substance satisfactory to you and to the effect that:
<PAGE>
28
(i) The statements in the Prospectus under the captions "The
Trust's Investments--Municipal Bonds--Special Considerations Relating
to Pennsylvania Municipal Bonds" and "Tax Matters" (with respect to
the Pennsylvania income tax) (in the prospectus) and "Investment
Policies and Techniques--Factors Pertaining to Pennsylvania" and "Tax
Matters--Pennsylvania Tax Matters" (in the statement of additional
information), insofar as they refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown; and
(ii) Such counsel shall also state that they have participated in
the preparation of, and have reviewed and discussed the contents of,
the Registration Statement and Prospectus with certain officers and
employees of the Trust and its independent accountants concerning the
statements set forth in the Registration Statement and Prospectus
under the captions "The Trust's Investments--Municipal Bonds--Special
Considerations Relating to Pennsylvania Municipal Bonds" and "Tax
Matters" (with respect to the Pennsylvania income tax) (in the
prospectus) and "Investment Policies and Techniques--Factors
Pertaining to Pennsylvania" and "Tax Matters--Pennsylvania Tax
Matters" (in the statement of additional information), and that based
upon the foregoing, no facts have come to their attention which cause
them to believe that the statements contained in the Registration
Statement or any amendment or supplement thereto under such captions
(except as to any financial statements or other financial data
included in the Registration Statement or any such amendment or
supplement, as to which they express no belief), as of its effective
date, 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 contained therein not misleading or that the
statements contained in the Prospectus or any amendment or supplement
thereto under such captions (except as to any financial statements or
other financial data included in the Prospectus or any such amendment
or supplement, as to which they express no belief), as of its issue
date and as of the Closing Date or the Option Closing Date, as the
case may be, 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 contained therein, in the light of
the circumstances under which they were made, not misleading.
(f) You shall have received on the Closing Date an opinion of Simpson
Thacher & Bartlett, counsel for the Underwriters, dated the Closing Date and
addressed to you, with respect to such matters as you may reasonably request.
(g) You shall have received letters addressed to you and dated the
date hereof and the Closing Date from Deloitte & Touche LLP, independent
certified public accountants, substantially in the forms heretofore approved by
the Representatives.
<PAGE>
29
(h) (i) No order suspending the effectiveness of the registration
statement or the Registration Statement or prohibiting or suspending the use of
the Prospectus (or any amendment or supplement thereto) or any Prepricing
Prospectus or any sales material shall have been issued and no proceedings for
such purpose or for the purpose of commencing an enforcement action against the
Trust, the Advisers or, with respect to the transactions contemplated by the
Prospectus (or any amendment or supplement thereto) and this Agreement, any
Underwriter, may be pending before or, to the knowledge of the Trust, the
Advisers or any Underwriter or in the reasonable view of counsel to the
Underwriters, shall be threatened or contemplated by the Commission at or prior
to the Closing Date and that any request for additional information on the part
of the Commission (to be included in the Registration Statement, the Prospectus
or otherwise) be complied with to the satisfaction of the Underwriters; (ii)
there shall not have been any change in the capital stock of the Trust nor any
material increase in the short-term or long-term debt of the Trust (other than
in the ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement to either of them), any material adverse change in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Trust or the Advisers; (iv) the Trust shall not have any
liabilities or obligations, direct or contingent (whether or not in the ordinary
course of business), that are material to the Trust, other than those reflected
in the Registration Statement or the Prospectus (or any amendment or supplement
to either of them); and (v) all the representations and warranties of the Trust
and the Advisers contained in this Agreement shall be true and correct on and as
of the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate of the Trust and the
Advisers, dated the Closing Date and signed by the chief executive officer and
the chief financial officer of each of the Trust and the Advisers (or such other
officers as are acceptable to you), to the effect set forth in this Section 9(h)
and in Section 9(i) hereof.
(i) Neither the Trust nor either of the Advisers shall have failed at
or prior to the Closing Date to have performed or complied in all material
respects with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing Date.
(j) The Shares have been duly authorized for listing, subject to
official notice of issuance, on the NYSE.
(k) The Trust and the Advisers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
<PAGE>
30
Any certificate or document signed by any officer of the Trust or the
Advisers and delivered to you, or to your counsel, shall be deemed a
representation and warranty by the Trust or the Advisers, as applicable, to each
Underwriter as to the statements made therein.
10 Expenses. The Trust agrees to pay the following costs and
--------
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the 1940 Act
Notification, the Prospectus and each amendment or supplement to any of them
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, any sales material and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
(iv) the reproduction and delivery of this Agreement, any dealer agreements and
all other agreements or documents reproduced and delivered in connection with
the offering of the Shares; (v) the registration of the Shares under the
Exchange Act and the listing of the Shares on the NYSE; (vi) the registration or
qualification of the Shares for offer and sale under the securities or blue sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental blue sky memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
NASD; (viii) the transportation and other expenses incurred by or on behalf of
Trust representatives in connection with presentations to prospective purchasers
of the Shares; (ix) the fees and expenses of the Trust's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Trust; and (x) an amount of [$75,000] [$50,000] payable on the Closing Date to
the Underwriters in partial reimbursement of their expenses in connection with
the offering.
11 Effective Date of Agreement. This Agreement shall become
---------------------------
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Trust,
by notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Trust.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate
<PAGE>
31
number of Shares which such defaulting Underwriter or Underwriters are obligated
but fail or refuse to purchase is not more than one-tenth of the aggregate
number of Shares which the Underwriters are obligated to purchase on the Closing
Date, each non-defaulting Underwriter shall be obligated, severally, in the
proportion which the number of Firm Shares set forth opposite its name in
Schedule I hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they are obligated to purchase on the Closing Date and the aggregate
number of Shares with respect to which such default occurs is more than one-
tenth of the aggregate number of Shares which the Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to you and the Trust
for the purchase of such Shares by one or more non-defaulting Underwriters or
other party or parties approved by you and the Trust are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter, the Trust or the Advisers. In any such
case which does not result in termination of this Agreement, either you or the
Trust shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Trust,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
Underwriter to the Trust or the Advisers, by notice to the Trust or the
Advisers, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Option Shares), as the case may
be, (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market or the Nasdaq Stock Market
shall have been suspended or materially limited, (ii) additional material
governmental restrictions not in force on the date of this Agreement have been
imposed upon trading in securities generally or a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak or
material escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions, the effect of
which is to make it, in your judgment, impracticable or inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Trust or either Adviser by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
<PAGE>
32
13. Information Furnished by the Underwriters. The statements set
-----------------------------------------
forth in the last paragraph on the cover page, and the statements in the first
and third paragraphs under the caption "Underwriting" in any Prepricing
Prospectus and in the Prospectus, constitute the only information furnished by
or on behalf of the Underwriters through you as such information is referred to
in Sections 6(b) and 8 hereof.
14. Miscellaneous. Except as otherwise provided in Sections 5, 11
-------------
and 12 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Trust or the Advisers, at the
office of BlackRock Financial Management, Inc. at 345 Park Avenue, New York, New
York 10154, Attention: Ralph L. Schlosstein; or (ii) if to you, as
Representatives of the several Underwriters, to Salomon Smith Barney Inc., 388
Greenwich Street, New York, New York 10013, Attention: Manager, Investment
Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Trust, the Advisers, their directors and officers, and
the other controlling persons referred to in Section 8 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Shares in his status as such purchaser.
15. Applicable Law; Counterparts. This Agreement shall be governed
----------------------------
by and construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
<PAGE>
33
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Advisers and the several Underwriters.
Very truly yours,
BLACKROCK STRATEGIC MUNICIPAL TRUST
By:_______________________________
BLACKROCK ADVISORS, INC.
By:_______________________________
BLACKROCK FINANCIAL MANAGEMENT, INC.
By:_______________________________
Confirmed as of the date first
above mentioned on behalf of themselves and the
other several Underwriters named in Schedule I hereto.
SALOMON SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
By: SALOMON SMITH BARNEY INC.
By: _______________________________
Managing Director
<PAGE>
1
SCHEDULE I
BLACKROCK STRATEGIC MUNICIPAL TRUST
Underwriter Number of
-----------
Shares
------
Salomon Smith Barney Inc............................ --
Prudential Securities Incorporated.................. --
Total............................................... --
<PAGE>
Exhibit (H)(2)
MASTER AGREEMENT AMONG UNDERWRITERS
-----------------------------------
July 18, 1985
Smith Barney, Harris Upham & Co. Incorporated
1345 Avenue of the Americas
New York, N.Y. 10105
Dear Sirs:
We understand that from time to time you may act as Representative or
as one of the Representatives of the several underwriters of offerings of
securities of various issuers. This Agreement shall apply to any offering of
securities handled by your Corporate Syndicate Department in which we elect to
act as an underwriter after receipt of an invitation from your Corporate
Syndicate Department which shall identify the issuer, contain information
regarding certain terms of the securities to be offered and specify the amount
of our proposed participation and the names of the other Representatives, if
any, and that our participation as an underwriter in the offering shall be
subject to the provisions of this Agreement. Your invitation will include
instructions for our acceptance of such invitation. At or prior to the time of
an offering, you will advise us, to the extent applicable, as to the expected
offering date, the expected closing date, the initial public offering price, the
interest or dividend rate (or the method by which such rate is to be
determined), the conversion price, the underwriting discount, the management
fee, the selling concession and the reallowance, except that if the public
offering price of the securities is to be determined by a formula based upon the
market price of certain securities (such procedure being hereinafter referred to
as "Formula Pricing"), you shall so advise us and shall specify the maximum
underwriting discount, management fee and selling concession. Such information
may be conveyed by you in one or more communications (such communications
received by us with respect to the offering are hereinafter collectively
referred to as the "Invitation"). If the Underwriting Agreement (as hereinafter
defined) provides for the granting of an option to purchase additional
securities to cover over-allotments, you will notify us, in the Invitation, of
such option.
This Agreement, as amended or supplemented by the Invitation, shall
become effective with respect to our participation in an offering of securities
if your Corporate Syndicate Department receives our oral or written acceptance
and does not subsequently receive a written communication revoking our
acceptance prior to the time and date specified in the Invitation (our unrevoked
acceptance after expiration of such time and date being hereinafter referred to
as our "Acceptance"). Our Acceptance will constitute our confirmation that,
except as otherwise stated in such Acceptance, each statement included in the
Master Underwriters' Questionnaire set forth as Exhibit A
<PAGE>
2
hereto (or otherwise furnished to us) is correct. The issuer of the securities
in any offering of securities made pursuant to this Agreement is hereinafter
referred to as the "Issuer". If the Underwriting Agreement does not provide for
an over-allotment option, the securities to be purchased are hereinafter
referred to as the "Securities"; if the Underwriting Agreement provides for an
over-allotment option, the securities the Underwriters (as hereinafter defined)
are initially obligated to purchase pursuant to the Underwriting Agreement are
hereinafter called the "Firm Securities" and any additional securities which may
be purchased upon exercise of the over-allotment option are hereinafter called
the "Additional Securities", with the Firm Securities and all or any part of the
Additional Securities being hereinafter collectively referred to as the
"Securities". Any underwriters of Securities under this Agreement, including
the Representatives (as hereinafter defined), are hereinafter collectively
referred to as the "Underwriters". All references herein to "you" or to the
"Representatives" shall mean Smith Barney, Harris Upham & Co. Incorporated and
the other firms, if any, which are named as Representatives in the Invitation.
The Securities to be offered may, but need not, be registered for a delayed or
continuous offering pursuant to Rule 415 under the Securities Act of 1933 (the
"1933 Act").
The following provisions of this Agreement shall apply separately to
each individual offering of Securities. This Agreement may be supplemented or
amended by you by written notice to us and, except for supplements or amendments
set forth in an Invitation relating to a particular offering of Securities, any
such supplement or amendment to this Agreement shall be effective with respect
to any offering of Securities to which this Agreement applies after this
Agreement is so amended or supplemented.
1. UNDERWRITING AGREEMENT; AUTHORITY OF REPRESENTATIVES. We
----------------------------------------------------
authorize you to execute and deliver an underwriting or purchase agreement and
any amendment or supplement thereto and any associated Terms Agreement or other
similar agreement (collectively, the "Underwriting Agreement") on our behalf
with the Issuer and/or any selling securityholder with respect to the Securities
in such form as you determine. We will be bound by all terms of the
Underwriting Agreement as executed. We understand that changes may be made in
those who are to be Underwriters and in the amount of Securities to be purchased
by them, but the amount of Securities to be purchased by us in accordance with
the terms of this Agreement and the Underwriting Agreement, including the amount
of Additional Securities, if any, which we may become obligated to purchase by
reason of the exercise of any over-allotment option provided in the Underwriting
Agreement, shall not be changed without our consent.
As Representatives of the Underwriters, you are authorized to take
such action as you deem necessary or advisable to carry out this Agreement, the
Underwriting Agreement, and the
<PAGE>
3
purchase, sale and distribution of the Securities, and to agree to any waiver or
modification of any provision of the Underwriting Agreement. To the extent
applicable, you are also authorized to determine (i) the amount of Additional
Securities, if any, to be purchased by the Underwriters pursuant to any over-
allotment option and (ii) with respect to offerings using Formula Pricing, the
initial public offering price and the price at which the Securities are to be
purchased in accordance with the Underwriting Agreement. It is understood and
agreed that Smith Barney, Harris Upham & Co. Incorporated may act on behalf of
all Representatives.
It is understood that, if so specified in the Invitation, arrangements
may be made for the sale of Securities by the Issuer pursuant to delayed
delivery contracts (hereinafter referred to as "Delayed Delivery Contracts").
References herein to delayed delivery and Delayed Delivery Contracts apply only
to offerings to which delayed delivery is applicable. The term "underwriting
obligation", as used in this Agreement with respect to any Underwriter, shall
refer to the amount of Securities, including any Additional Securities (plus
such additional Securities as may be required by the Underwriting Agreement in
the event of a default by one or more of the Underwriters) which such
Underwriter is obligated to purchase pursuant to the provisions of the
Underwriting Agreement, without regard to any reduction in such obligation as a
result of Delayed Delivery Contracts which may be entered into by the Issuer.
If the Securities consist in whole or in part of debt obligations
maturing serially, the serial Securities being purchased by each Underwriter
pursuant to the Underwriting Agreement will consist, subject to adjustment as
provided in the Underwriting Agreement, of serial Securities of each maturity in
a principal amount which bears the same proportion to the aggregate principal
amount of the serial Securities of such maturity to be purchased by all the
Underwriters as the principal amount of serial Securities set forth opposite
such Underwriter's name in the Underwriting Agreement bears to the aggregate
principal amount of the serial Securities to be purchased by all the
Underwriters.
2. REGISTRATION STATEMENT PROSPECTUS; OFFERING CIRCULAR. In the case
----------------------------------------------------
of an Invitation regarding an offer of Securities registered under the 1933 Act
(a "Registered Offering"), you will furnish to us, to the extent made available
to you by the Issuer, copies of any registration statement or registration
statements relating to the Securities which may be filed with the Securities and
Exchange Commission (the "Commission") pursuant to the 1933 Act and of each
amendment thereto (excluding exhibits but including any documents incorporated
by reference therein). Such registration statement(s) as amended, and the
prospectus(es) relating to the sale of Securities by the Issuer constituting a
part thereof, including all documents incorporated therein by reference, as
<PAGE>
4
from time to time amended or supplemented by the filing of documents pursuant to
the Securities Exchange Act of 1934 (the "1934 Act"), the 1933 Act or otherwise,
are referred to herein as the "Registration Statement" and "Prospectus",
respectively; provided, however, that a supplement to the Prospectus filed with
the Commission pursuant to Rule 424 under the 1933 Act with respect to an
offering of Securities (a "Prospectus Supplement") shall be deemed to have
supplemented the Prospectus only with respect to the offering of Securities to
which it relates.
With respect to Securities for which no Registration Statement is
filed with the Commission, you will furnish to us, to the extent made available
to you by the Issuer, copies of any offering circular or other offering
materials to be used in connection with the offering of the Securities and of
each amendment thereto (the "Offering Circular").
3. PUBLIC OFFERING. The sale of the Securities to the public shall
---------------
commence as soon as you deem advisable. We will not sell any Securities until
they are released by you for that purpose. When notified by you that the
Securities are released for sale, we will offer to the public in conformity with
the terms of offering set forth in the Prospectus or Offering Circular, such of
the Securities to be purchased by us ("our Securities") as are not reserved for
our account for sale to Selected Dealers and others pursuant to Section 5.
After the initial public offering, the public offering price and the concession
and discount therefrom may be changed by you by notice to the Underwriters, and
we agree to be bound by any such change.
If, in accordance with the terms of offering set forth in the
Prospectus or Offering Circular, the offering of the Securities is not at a
fixed price but at varying prices set by individual Underwriters based on market
prices or at negotiated prices, the provisions above relating to your right to
change the public offering price and concession and discount to dealers shall
not apply, and other references in this Section and elsewhere in this Agreement
to the public offering price or Selected Dealers' concession shall be deemed to
mean the prices and concessions determined by you from time to time in your
discretion.
If so directed in the Invitation, we will not sell any Securities to
any account over which we have discretionary authority. We will also comply
with any other restrictions which may be set forth in the Invitation.
The initial public advertisement with respect to the Securities shall
appear on such date, and shall include the names of such of the Underwriters, as
you may determine. Thereafter, any Underwriter may advertise at its own
expense.
4. DELAYED DELIVERY ARRANGEMENTS. We authorize you to act on our
-----------------------------
behalf in making all arrangements for the solicitation
<PAGE>
5
of offers to purchase Securities from the Issuer pursuant to Delayed Delivery
Contracts, and we agree that all such arrangements will be made only through you
(directly or through Underwriters or Selected Dealers). You may allow to
Selected Dealers in respect of such Securities a commission equal to the
concession allowed to Selected Dealers pursuant to Section 5.
The obligations of the Underwriters shall be reduced in the aggregate
by the principal amount of Securities covered by Delayed Delivery Contracts made
by the Issuer, the obligation of each Underwriter to be reduced by the principal
amount of such Securities, if any, allocated by you to such Underwriter. Your
determination of the allocation of Securities covered by Delayed Delivery
Contracts among the several Underwriters shall be final and conclusive, and we
agree to be bound by any notice delivered by you to the Issuer setting forth the
amount of the reduction in our obligation as a result of Delayed Delivery
Contracts.
Upon receiving payment from the Issuer of the fee for arranging
Delayed Delivery Contracts, you will credit our account with the portion of such
fee applicable to the Securities covered by Delayed Delivery Contracts allocated
to us. You will charge our account with any commission allocated to Selected
Dealers in respect of Securities covered by Delayed Delivery Contracts allocated
to us.
5. OFFERING TO SELECTED DEALERS AND OTHERS; MANAGEMENT OF OFFERING.
---------------------------------------------------------------
We authorize you, for our account, to reserve for sale and to sell to dealers
("Selected Dealers"), among whom any of the Underwriters may be included, such
amount of our Securities as you shall determine. Reservations for sales to
Selected Dealers for our account need not be in proportion to our underwriting
obligation, but sales of Securities reserved for our account for sale to
Selected Dealers shall be made as nearly as practicable in the ratio which the
amount of Securities reserved for our account bears to the aggregate amount of
Securities reserved for the account of all Underwriters, as calculated from day
to day. The price to Selected Dealers initially shall be in the public offering
price less a concession not in excess of the Selected Dealers concession set
forth in the Invitation. Selected Dealers shall be actually engaged in the
investment banking or securities business and shall be either members in good
standing of the National Association of Securities Dealers, Inc. (the "NASD") or
dealers with their principal place of business located outside the United
States, its territories and its possessions and not registered under the 1934
Act who agree to make no sales within the United States, its territories or its
possessions or to persons who are nationals thereof or residents therein. Each
Selected Dealer shall agree to comply with the provisions of Section 24 of
Article III of the Rules of Fair Practice of the NASD, and each foreign Selected
Dealer who is not a member of the NASD also shall agree to comply with the
NASD's interpretation with respect to free-riding and withholding, to comply, as
though it were a member of the NASD, with the provisions of Sections 8
<PAGE>
6
and 36 of Article III of such Rules of Fair Practice, and to comply with Section
25 of Article III thereof as that Section applies to a non-member foreign
dealer.
With your consent, the Underwriters may allow, and Selected Dealers
may reallow, a discount on sales to any dealer who meets the above NASD
requirements in an amount not in excess of the amount set forth in the
Invitation. Upon your request, we will advise you of the identity of any dealer
to whom we allow such a discount and any Underwriter or Selected Dealer from
whom we receive such a discount.
We also authorize you, for our account, to reserve for sale and to
sell our Securities at the public offering price to others, including
institutions and retail purchasers. Except for such sales which are designated
by a purchaser to be for the account of a particular Underwriter, such
reservations and sales shall be made as nearly as practicable in proportion to
our underwriting obligation, unless you agree to a smaller proportion at our
request.
At or before the time the Securities are released for sale, you shall
notify us of the amount of our Securities which have not been reserved for our
account for sale to Selected Dealers and others and which is to be retained by
us for direct sale.
We will from time to time, upon your request, report to you the amount
of Securities retained by us for direct sale which remains unsold and, upon your
request, deliver to you for our account, or sell to you for the account of one
or more of the Underwriters, such amount of our unsold Securities as you may
designate at the public offering price less an amount determined by you not in
excess of the concession to Selected Dealers. You may also repurchase
Securities from other Underwriters and Selected Dealers, for the account of one
or more of the Underwriters, at prices determined by you not in excess of the
public offering price less the concession to Selected Dealers.
You may from time to time deliver to any Underwriter, for carrying
purposes or for sale by such Underwriter, any of the Securities then reserved
for sale to, but not purchased and paid for by, Selected Dealers or others as
above provided, but to the extent that Securities are so delivered for sale by
such Underwriter, the amount of Securities then reserved for the account of such
Underwriter shall be correspondingly reduced. Securities delivered for carrying
purposes only shall be redelivered to you upon demand.
The Underwriters and Selected Dealers may, with your consent, purchase
Securities from and sell Securities to each other at the public offering price
less a concession not in excess of the concession to Selected Dealers.
<PAGE>
7
6. REPURCHASE OF SECURITIES NOT EFFECTIVELY PLACED. In recognition
-----------------------------------------------
of the importance of distributing the Securities to bona fide investors, we
agree to repurchase on demand any Securities sold by us, except through you,
which are purchased by you in the open market or otherwise during a period
terminating as provided in Section 16, at a price equal to the cost of such
purchase, including accrued interest, amortization of original issue discount or
dividends, commissions and transfer and other taxes, if any, on redelivery. The
certificates delivered to us need not be the identical certificates delivered to
you in respect of the Securities purchased. In lieu of requiring repurchase,
you may, in your discretion, sell such Securities for our account at such
prices, upon such terms and to such persons, including any of the other
Underwriters, as you may determine, charging the amount of any loss and expense,
or crediting the amount of any net profit, resulting from such sale, to our
account, or you may charge our account with an amount determined by you not in
excess of the concession to Selected Dealers.
7. STABILIZATION AND OVER-ALLOTMENT. In order to facilitate the
--------------------------------
distribution of the Securities, we authorize you, in your discretion, to
purchase and sell Securities, any securities into which the Securities are
convertible or for which the Securities are exchangeable, and any other
securities of the Issuer or any guarantor of the Securities specified in the
Invitation, in the open market or otherwise, for long or short account, at such
prices as you may determine, and, in arranging for sales to Selected Dealers or
others, to over-allot. You may liquidate any long position or cover any short
position incurred pursuant to this Section at such prices as you may determine.
You shall make such purchases and sales (including over-allotments) for the
accounts of the Underwriters as nearly as practicable in proportion to their
respective underwriting obligations. It is understood that, in connection with
any particular offering of Securities to which this Agreement applies, you may
have made purchases of any such securities for stabilizing purposes prior to the
time when we became one of the Underwriters, and we agree that any such
securities so purchased shall be treated as having been purchased for the
respective accounts of the Underwriters pursuant to the foregoing authorization.
At the close of business on any day our net commitment, either for long or short
account, resulting from such purchases or sales (including over-allotments)
shall not exceed 15% (or such other amount as may be specified in the
Invitation) of our underwriting obligation, except that such percentage may be
increased with the approval of a majority in interest of the Underwriters. We
will take up at cost on demand any Securities or any such other securities so
sold or over-allotted for our account, including accrued interest, amortization
of original issue discount or dividends, and we will pay to you on demand the
amount of any losses or expenses incurred for our account pursuant to this
Section. In the event of default by any Underwriter in respect of its
obligations under this Section, each non-defaulting Underwriter shall assume its
share of the
<PAGE>
8
obligations of such defaulting Underwriter in the proportion that its
underwriting obligation bears to the underwriting obligations of all non-
defaulting Underwriters without relieving such defaulting Underwriter of its
liability hereunder.
If you effect any stabilizing purchase pursuant to this Section, you
shall promptly notify us of the date and time of the first stabilizing purchase
and the date and time when stabilizing was terminated. You shall prepare and
maintain such records as are required to be maintained by you as manager
pursuant to Rule 17a-2 under the 1934 Act.
8. RULE 10B-6. We represent and agree that in connection with the
----------
offering of Securities we have complied and will comply with the provisions of
Rule 10b-6 under the 1934 Act as they apply to the offering of the Securities.
9. PAYMENT AND DELIVERY. At or before such time, on such dates and
--------------------
at such places as you may specify in the Invitation, we will deliver to you a
certified or official bank check in such funds as are specified in the
Invitation, payable to the order of Smith Barney, Harris Upham & Co.
Incorporated (unless otherwise specified in the Invitation) in an amount equal
to, as you direct, either (i) the public offering price or prices plus accrued
interest, amortization or original issue discount or dividends, if any, set
forth in the Prospectus or Offering Circular less the concession to Selected
Dealers in respect of the amount of Securities to be purchased by us in
accordance with the terms of this Agreement, or (ii) the amount set forth in the
Invitation with respect to the Securities to be purchased by us. We authorize
you to make payment for our account of the purchase price for the Securities to
be purchased by us against delivery to you of such Securities (which, in the
case of Securities which are debt obligations, may be in temporary form), and
the difference between such purchase price of the Securities and the amount of
our funds delivered to you therefor shall be credited to our account.
Delivery to us of Securities retained by us for direct sale shall be
made by you as soon as practicable after your receipt of the Securities. Upon
termination of the provisions of this Agreement as provided in Section 16, you
shall deliver to us any Securities reserved for our account for sale to Selected
Dealers and others which remain unsold at that time. If, upon termination of
the provisions of this Agreement specified in Section 16 hereof, an aggregate of
not more than 10% of the Securities remains unsold, you may, in your discretion,
sell such Securities at such prices as you may determine.
If we are a member of The Depository Trust Company or any other
depository or similar facility, you are authorized to make appropriate
arrangements for payment for and/or delivery through its facilities of the
Securities to be purchased by us, or, if we are not a member, settlement may be
made through a
<PAGE>
9
correspondent that is a member pursuant to our timely instructions to you.
Upon receiving payment for Securities sold for our account to Selected
Dealers and others, you shall remit to us an amount equal to the amount paid by
us to you in respect of such Securities and credit or charge our account with
the difference, if any, between such amount and the price at which such
Securities were sold.
In the event that the Underwriting Agreement for an offering provides
for the payment of a commission or other compensation to the Underwriters, we
authorize you to receive such commission or other compensation for our account.
10. MANAGEMENT COMPENSATION. As compensation for your services in
-----------------------
the management of the offering, we will pay you an amount equal to the
management fee specified in the Invitation in respect of the Securities to be
purchased by us pursuant to the Underwriting Agreement, and we authorize you to
charge our account with such amount. If there is more than one Representative,
such compensation shall be divided among the Representatives in such proportions
as they may determine.
11. AUTHORITY TO BORROW. We authorize you to advance your own funds
-------------------
for our account, charging current interest rates, or to arrange loans for our
account or the account of the Underwriters, as you may deem necessary or
advisable for the purchase, carrying, sale and distribution of the Securities.
You may execute and deliver any notes or other instruments required in
connection therewith and may hold or pledge as security therefor all or any part
of the Securities which we or such Underwriters have agreed to purchase. The
obligations of the Underwriters under loans arranged on their behalf shall be
several in proportion to their respective participations in such loans, and not
joint. Any lender is authorized to accept your instructions as to the
disposition of the proceeds of any such loans. You shall credit each
Underwriter with the proceeds of any loans made for its account.
12. BLUE SKY QUALIFICATION. You shall inform us, upon request, of
----------------------
the states and other jurisdictions of the United States in which it is believed
that the Securities are qualified for sale under, or are exempt from the
requirements of, their respective securities laws, but you assume no
responsibility with respect to our right to sell Securities in any jurisdiction.
You are authorized to file with the Department of State of the State of New York
a Further State Notice with respect to the Securities, if necessary.
If we propose to offer Securities outside the United States, its
territories or its possessions, we will take, at our own expense, such action,
if any, as may be necessary to comply
<PAGE>
10
with the laws of each foreign jurisdiction in which we propose to offer
Securities.
13. MEMBERSHIP IN NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.;
---------------------------------------------------------------
FOREIGN UNDERWRITERS. We understand that you are a member in good standing of
- --------------------
the NASD. We confirm that we are actually engaged in the investment banking or
securities business and are either (i) a member in good standing of the NASD or
(ii) a dealer with its principal place of business located outside the United
States, its territories and its possessions and not registered under the 1934
Act who hereby agrees to make no sales within the United States, its territories
or its possessions or to persons who are nationals thereof or residents therein
(except that we may participate in sales to Selected Dealers and others under
Section 5 of this Agreement). We hereby agree to comply with Section 24 of
Article III of the Rules of Fair Practice of the NASD, and if we are a foreign
dealer and not a member of the NASD we also hereby agree to comply with the
NASD's interpretation with respect to free-riding and withholding, to comply, as
though we were a member of the NASD, with the provisions of Sections 8 and 36 of
Article III of such Rules of Fair Practice, and to comply with Section 25 of
Article III thereof as that Section applies to a non-member foreign dealer.
14. DISTRIBUTION OF PROSPECTUSES; OFFERING CIRCULARS. We are
------------------------------------------------
familiar with Securities Act of 1933 Release No. 4968 and Rule 15c2-8 under the
1934 Act, relating to the distribution of preliminary and final prospectuses,
and we confirm that we will comply therewith, to the extent applicable, in
connection with any sale of Securities. You shall cause to be made available to
us, to the extent made available to you by the Issuer, such number of copies of
the Prospectus as we may reasonably request for purposes contemplated by the
1933 Act, the 1934 Act and the rules and regulations thereunder.
If an Invitation states that the offering is subject to the 48-hour
prospectus delivery requirement set forth in Rule 15c2-8(b), our Acceptance of
the Invitation shall be deemed to constitute confirmation that we have delivered
(or we will deliver) a copy of the preliminary prospectus to all persons to whom
we expect to confirm a sale of Securities and that such delivery was effected
(or will be effected) at least 48 hours prior to the mailing of such
confirmations of sale.
Our Acceptance of an Invitation relating to an offering made pursuant
to an Offering Circular shall constitute our agreement that, if requested by
you, we will furnish a copy of any amendment to a preliminary or final Offering
Circular to each person to whom we shall have furnished a previous preliminary
or final Offering Circular. Our Acceptance shall constitute our confirmation
that we have delivered and our agreement that we will deliver all preliminary
and final Offering Circulars required for compliance with the applicable federal
and state laws and the applicable rules and regulations of any regulatory
<PAGE>
11
body promulgated thereunder governing the use and distribution of offering
circulars by underwriters and, to the extent consistent with such laws, rules
and regulations, our Acceptance shall constitute our confirmation that we have
delivered and our agreement that we will deliver all preliminary and final
Offering Circulars which would be required if the provisions of Rule 15c2-8 (or
any successor provision) under the 1934 Act applied to such offering.
15. NET CAPITAL. The incurrence by us of our obligations hereunder
-----------
and under the Underwriting Agreement in connection with the offering of the
Securities will not place us in violation of the capital requirements of Rule
15c3-1 under the 1934 Act.
16. TERMINATION. With respect to each offering of Securities to
-----------
which this Agreement applies, all limitations in this Agreement on the price at
which the Securities may be sold, the period of time referred to in Section 6,
the authority granted by the first sentence of Section 7, and the restrictions
contained in Section 8 shall terminate at the close of business on the 45th day
after the commencement of the offering of such Securities. You may terminate
nay or all of such provisions at any time prior thereto by notice to the
Underwriters. All other provisions of this Agreement shall remain operative and
in full force and effect with respect to such offering.
17. EXPENSES AND SETTLEMENT. You may charge our account with any
-----------------------
transfer taxes on sales of Securities made for our account and with our
proportionate share (based upon our underwriting obligation) of all other
expenses incurred by you under this Agreement or otherwise in connection with
the purchase, carrying, sale or distribution of the Securities. With respect to
each offering of Securities to which this Agreement applies, the respective
accounts of the Underwriters shall be settled as promptly as practicable after
the termination of all the provisions of this Agreement as provided in Section
16, but you may reserve such amount as you may deem advisable for additional
expenses. Your determination of the amount to be paid to or by us shall be
conclusive. You may at any time make partial distributions of credit balances
or call for payment of debit balances. Any of our funds in your hands may be
held with your general funds without accountability for interest.
Notwithstanding any settlement, we will remain liable for any taxes on transfers
for our account and for our proportionate share (based upon our underwriting
obligation) of all expenses and liabilities which may be incurred by or for the
accounts of the Underwriters with respect to each offering of Securities to
which this Agreement applies.
18. INDEMNIFICATION. With respect to each offering of Securities
---------------
pursuant to this Agreement, we will indemnify and hold harmless each other
Underwriter and each person, if any, who controls each other Underwriter within
the meaning of Section 15
<PAGE>
12
of the 1933 Act, to the extent that and on the terms upon which we agree to
indemnify and hold harmless the Issuer and other specified persons as set forth
in the Underwriting Agreement.
19. CLAIMS AGAINST UNDERWRITERS. With respect to each offering of
---------------------------
Securities to which this Agreement applies, if at any time any person other than
an Underwriter asserts a claim (including any commenced or threatened
investigation or proceeding by any government agency or body) against one or
more of the Underwriters or against you as Representative(s) of the Underwriters
arising out of an alleged untrue statement or omission in the Registration
Statement (or any amendment thereto) or in any preliminary prospectus or the
Prospectus or any amendment or supplement thereto, or in any preliminary or
final Offering Circular, or relating to any transaction contemplated by this
Agreement, we authorize you to make such investigation, to retain such counsel
for the Underwriters and to take such action in the defense of such claim as you
may deem necessary or advisable. You may settle such claim with the approval of
a majority in interest of the Underwriters. We will pay our proportionate share
(based upon our underwriting obligation) of all expenses incurred by you
(including the fees and expenses of counsel for the Underwriters) in
investigating and defending against such claim and our proportionate share of
the aggregate liability incurred by all Underwriters in respect of such claim
(after deducting any contribution indemnification obtained pursuant to the
Underwriting Agreement, or otherwise, from persons other than Underwriters),
whether such liability is the result of a judgment against one or more of the
Underwriters or the result of any settlement. Any Underwriter may retain
separate counsel at its own expense. A claim against or liability incurred by a
person who controls an Underwriter shall be deemed to have been made against or
incurred by such Underwriter. In the event of default by any Underwriter in
respect of its obligations under this Section, the non-defaulting Underwriters
shall be obligated to pay the full amount thereof in the proportions that their
respective underwriting obligations bear to the underwriting obligations of all
non-defaulting Underwriters without relieving such defaulting Underwriter of its
liability hereunder.
20. DEFAULT BY UNDERWRITERS. Default by any Underwriter in respect
-----------------------
of its obligations hereunder or under the Underwriting Agreement shall not
release us from any of our obligations or in any way affect the liability of
such defaulting Underwriter to the other Underwriters for damages resulting from
such default. If one or more Underwriters default under the Underwriting
Agreement, if provided in the Underwriting Agreement you may (but shall not be
obligated to) arrange for the purchase by others, which may include yourselves
or other non-defaulting Underwriters, of all or a portion of the Securities not
taken up by the defaulting Underwriters.
<PAGE>
13
In the event that such arrangements are made, the respective
underwriting obligations of the non-defaulting Underwriters and the amounts of
the Securities to be purchased by others, if any, shall be taken as the basis
for all rights and obligations hereunder, but this shall not in any way affect
the liability of any defaulting Underwriter to the other Underwriters for
damages resulting from its default, nor shall any such default relieve any other
Underwriter of any of its obligations hereunder or under the Underwriting
Agreement except as herein or therein provided. In addition, in the event of
default by one or more Underwriters in respect of their obligations under the
Underwriting Agreement to purchase the Securities agreed to be purchased by them
thereunder and, to the extent that arrangements shall not have been made by you
for any person to assume the obligations of such defaulting Underwriter or
Underwriters, we agree, if provided in the Underwriting Agreement, to assume our
proportionate share, based upon our underwriting obligation, of the obligations
of each such defaulting Underwriter (subject to the limitations contained in the
Underwriting Agreement) without relieving such defaulting Underwriter of its
liability therefor.
In the event of default by one or more Underwriters in respect of
their obligations under this Agreement to take up and pay for any securities
purchased, or to deliver any securities sold or over-allotted, by you for the
respective accounts of the Underwriters, or to bear their proportion of expenses
or liabilities pursuant to this Agreement, and to the extent that arrangements
shall not have been made by you for any persons to assume the obligations of
such defaulting Underwriter or Underwriters, we agree to assume our
proportionate share, based upon our underwriting obligation, of the obligations
of each defaulting Underwriter without relieving any such defaulting Underwriter
of its liability therefor.
21. LEGAL RESPONSIBILITY. As Representative(s) of the Underwriters,
--------------------
you shall have no liability to us, except for your lack of good faith and for
obligations assumed by you in this Agreement and except that we do not waive any
rights that we may have under the 1933 Act or the 1934 Act or the rules and
regulations thereunder. No obligations not expressly assumed by you in this
Agreement shall be implied herefrom.
Nothing herein contained shall constitute the Underwriters an
association, or partners, with you, or with each other, or, except as otherwise
provided herein or in the Underwriting Agreement, render any Underwriter liable
for the obligations of any other Underwriter, and the rights, obligations and
liabilities of the Underwriters are several in accordance with their respective
underwriting obligations, and not joint.
If the Underwriters are deemed to constitute a partnership for federal
income tax purposes, we elect to be excluded from the application of Subchapter
K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1954, as amended, and
<PAGE>
14
agree not to take any position inconsistent with such election, and you, as
Representative(s), are authorized, in your discretion, to execute on behalf of
the Underwriters such evidence of such election as may be required by the
Internal Revenue Service.
Unless we have promptly notified you in writing otherwise, our name as
it should appear in the Prospectus or Offering Circular and our address are set
forth below.
22. NOTICES. Any notice from you shall be deemed to have been duly
-------
given if mailed or transmitted to us at our address appearing below.
23. GOVERNING LAW. This Agreement shall be governed by the laws of
-------------
the State of New York applicable to agreements made and to be performed in said
State.
Please confirm this Agreement and deliver a copy to us.
Very truly yours,
Name of Firm:
By _________________________________
Authorized Officer or Partner
Address:
---------------------------------
---------------------------------
---------------------------------
Confirmed as of the date
first above written.
Smith Barney, Harris Upham & Co. Incorporated
By ______________________________
Managing Director
<PAGE>
EXHIBIT A
---------
MASTER UNDERWRITERS' QUESTIONNAIRE
----------------------------------
In connection with each offering of Securities pursuant to the Smith
Barney, Harris Upham & Co. Incorporated Master Agreement Among Underwriters,
dated July 18, 1985 (the "Agreement"), each Underwriter confirms the following
information, except as indicated in such Underwriter's Acceptance or other
written communication furnished to Smith Barney, Harris Upham & Co.
Incorporated. Defined terms used herein have the same meaning as defined terms
in the Master Agreement Among Underwriters.
(a) Neither such Underwriter nor any of its directors, officers or
partners have any material (as defined in Regulation C under the 1933 Act)
relationship with the Issuer, its parent (if any), any other seller of the
Securities or any guarantor of the Securities.
(b) Except as described or to be described in the Agreement, the
Underwriting Agreement or the Invitation, such Underwriter does not know: (i)
of any discounts or commissions to be allowed or paid to dealers, including all
cash, securities, contracts, or other consideration to be received by any dealer
in connection with the sale of the Securities, or of any other discounts or
commissions to be allowed or paid to the Underwriters or of any other items that
would be deemed by the NASD to constitute underwriting compensation for purposes
of the NASD's Rules of Fair Practice, (ii) of any intention to over-allot, or
(iii) that the price of any security may be stabilized to facilitate the
offering of the Securities.
(c) No report or memorandum has been prepared for external use (i.e.,
outside such Underwriter's organization) by such Underwriter in connection with
the proposed offering of Securities and, in the case of a Registered Offering,
where the Registration Statement is on Form S-1, such Underwriter has not
prepared or had prepared for it any engineering, management or similar report or
memorandum relating to the broad aspects of the business, operations or products
of the Issuer, its parent (if any) or any guarantor of the Securities within the
past twelve months. If any such report or memorandum has been prepared, furnish
to Smith Barney, Harris Upham & Co. Incorporated three copies thereof, together
with a statement as to the distribution of the report or memorandum, identifying
each class of persons to whom the report or memorandum was distributed, the
number of copies distributed to each class and the period of distribution.
(d) If the Securities are debt securities to be issued under an
indenture to be qualified under the Trust Indenture Act of 1939, neither such
Underwriter nor any of its directors, officers or partners is an "affiliate", as
that term is defined under the Trust Indenture Act of 1939, of the Trustee for
the
<PAGE>
2
Securities as specified in the Invitation, or of its parent (if any); neither
the Trustee nor its parent (if any) nor any of their directors or executive
officers is a director, officer, partner, employee, appointee or representative
of such Underwriter as those terms are defined in the Trust Indenture Act of
1939 or in the relevant instructions to Form T-1; neither such Underwriter nor
any of its directors, partners or executive officers, separately or as a group,
owns beneficially 1% or more of the shares of any class of voting securities of
the Trustee or of its parent (if any); and if such Underwriter is a corporation,
it does not have outstanding nor has it assumed or guaranteed any securities
issued otherwise than in its present corporate name, and neither the Trustee nor
its parent (if any) is a holder of any such securities.
(e) If the Issuer is a public utility, such Underwriter is not a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company" or of a "public utility company", each as defined in the Public Utility
Holding Company Act of 1935.
(f) Neither such Underwriter nor any "group" (as that term is defined
in Section 13(d)(3) of the 1934 Act) of which it is a member is the beneficial
owner (determined in accordance with Rule 13d-3 under the 1934 Act) of more than
5% of any class of voting securities of the Issuer, its parent (if any), any
other seller of the Securities or any guarantor of the Securities nor does it
have any knowledge that more than 5% of any class of voting securities of the
Issuer is held or to be held subject to any voting trust or other similar
agreement.
<PAGE>
EXHIBIT (H)(3)
Salomon Smith Barney Inc.
388 Greenwich Street
New York, N.Y. 10013
Attention: Dominic J. Lepore, IBD - Transactions Structuring Group
Dear Sirs:
We are a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD") or a foreign bank or dealer not eligible for such
membership.
We hereby agree that, in connection with any purchase or sale by us of
securities which are part of a fixed price offering in which Salomon Smith
Barney Inc. ("Salomon Smith Barney") is an underwriter and as to which we
receive a selling concession, discount or other allowance, we will (a) if we are
a member of the NASD, comply with all applicable Conduct Rules of the NASD,
including, without limitation, IM 2110-1 (relating to Free-Riding and
Withholding) and Conduct Rule 2740 (relating to Selling Concessions, Discounts
and Other Allowances) or (b) if we are a foreign bank or dealer, not eligible
for such membership, comply with said IM 2110-1 and with Conduct Rules 2730
(relating to Securities Taken in Trade), 2740 (relating to Selling Concessions)
and 2750 (relating to Transactions with Related Persons) as it applies to a
non-member broker or dealer in a foreign country.
This letter agreement shall remain in full force and effect until Salomon
Smith Barney receives written notice at the above address of its termination.
Please confirm that the foregoing correctly sets forth our agreement with
Salomon Smith Barney.
Very truly yours,
NAME OF INSTITUTION
By:
---------------------------
Title:
Confirmed:
SALOMON SMITH BARNEY INC.
By:
----------------------
Dominic J. Lepore
Vice President
<PAGE>
EXHIBIT J
CUSTODIAN CONTRACT
------------------
This Contract between The BlackRock Pennsylvania Strategic Municipal Trust,
a business trust organized and existing under the laws of the State of
Delaware, having its principal place of business at 345 Park Avenue, New York,
New York 10154 hereinafter called the "Fund", and State Street Bank and Trust
Company, a Massachusetts trust company, having its principal place of business
at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Fund's agreement and declaration of trust (the
"Declaration of Trust"). The Fund agrees to deliver to the Custodian all
securities and cash owned by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Fund from time to time, and the cash consideration received by it
for such new or treasury shares of beneficial interest ("Shares") of the Fund as
may be issued or sold from time to time. The Custodian shall not be responsible
for any property of the Fund held or received by the Fund and not delivered to
the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 3),
the Custodian shall from time to time employ one or more sub-custodians, but
only in accordance with an applicable vote by the board of trustees of the Fund
(the "Board of Trustees"), and provided that the Custodian shall have no more or
less responsibility or liability to the Fund on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
------------------------------------------------------------------------
Custodian
---------
2.1 Holding Securities. The Custodian shall hold and physically segregate for
------------------
the account of the Fund all non-cash property, including all securities
owned by the Fund, other than (a) securities which are maintained pursuant
to Section 2.8 in a clearing agency registered with the Securities and
Exchange Commission (the "SEC") under Section 17A of the Securities
Exchange Act of 1934 (the "Exchange Act"), which acts as a securities
depository, or in the book-entry system authorized by the U.S. Department
of the Treasury and certain federal agencies (each, a "Securities System")
and (b) commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.9.
<PAGE>
2.2 Delivery of Securities. The Custodian shall release and deliver securities
----------------------
owned by the Fund held by the Custodian or in a Securities System account
of the Custodian ("Securities System Account") or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and receipt
of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.8 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of the
Fund or into the name of any nominee or nominees of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a different
number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in any such
--------
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to the
broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim
2
<PAGE>
receipts or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the
Fund, but only against receipt of adequate collateral as agreed upon
--- ----
from time to time by the Custodian and the Fund, which may be in the
form of cash or obligations issued by the United States government,
its agencies or instrumentalities, except that in connection with any
loans for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S. Department of
the Treasury, the Custodian will not be held liable or responsible for
the delivery of securities owned by the Fund prior to the receipt of
such collateral;
11) For delivery as security in connection with any borrowings by the Fund
requiring a pledge of assets by the Fund, but only against receipt of
--- ----
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement among
the Fund, the Custodian and a broker-dealer registered under the
Exchange Act and a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of any agreement among
the Fund, the Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission (the "CFTC") and/or
any Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by the
Fund;
14) For any other proper purpose, but only upon receipt of Proper
--- ----
Instructions specifying the securities of the Fund to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper purpose, and naming the person
or persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other than
--------------------------
bearer securities) shall be registered in the name of the Fund or in the
name of any nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless the Fund has
------
authorized in writing the appointment of a nominee to be used in common
with other registered investment companies having the same investment
adviser as the Fund, or in the name or nominee name of any agent appointed
pursuant to Section 2.7 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Fund under the terms of this Contract shall be in "street
name" or other good delivery form. If, however, the Fund directs the
3
<PAGE>
Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on such
securities and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
-------------
account or accounts in the name of the Fund, subject only to draft or order
by the Custodian acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the provisions hereof, all
cash received by it from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the Investment Company Act of 1940, as amended (the
"1940 Act"). Funds held by the Custodian for the Fund may be deposited by
it to its credit as Custodian in the banking department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
--------
company shall be qualified to act as a custodian under the 1940 Act and
that each such bank or trust company and the funds to be deposited with
each such bank or trust company shall be approved by vote of a majority of
the Board of Trustees of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 Collection of Income. Subject to the provisions of Section 2.3, the
--------------------
Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which the Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments
with respect to bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to the Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach and
present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when
due on securities held hereunder. Income due the Fund on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the responsibility
of the Fund. The Custodian will have no duty or responsibility in
connection therewith, other than to provide the Fund with such information
or data as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is properly
entitled.
2.6 Payment of Fund Monies. Upon receipt of Proper Instructions, which may be
----------------------
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or options
on futures contracts for the account of the Fund but only (a) against
the delivery of such securities or evidence of title to such options,
futures contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the United
States or abroad which is qualified under the 1940 Act to act as a
custodian and has been designated by the Custodian as its agent for
this
4
<PAGE>
purpose) registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with the conditions set
forth in Section 2.8 hereof; (c) in the case of a purchase involving
the Direct Paper System, in accordance with the conditions set forth
in Section 2.11; (d) in the case of repurchase agreements entered into
between the Fund and the Custodian, or another bank, or a broker-
dealer which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing purchase
by the Fund of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Fund or (e) for transfer to a time deposit account
of the Fund in any bank; such transfer may be effected prior to
receipt of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions as defined in Article 3;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: interest, taxes, management fees, accounting fees, transfer
agent and legal fees, and operating expenses of the Fund whether or
not such expenses are to be in whole or part capitalized or treated as
deferred expenses;
4) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
5) For payment of the amount of dividends received in respect of
securities sold short;
6) For any other proper purpose, but only upon receipt of Proper
--- ----
Instructions specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons to whom such
payment is to be made.
2.7 Appointment of Agents. The Custodian may at any time or times in its
---------------------
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian,
as its agent to carry out such of the provisions of this Article 2 as the
Custodian may from time to time direct; provided, however, that the
--------
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.8 Deposit of Securities in Securities Systems. The Custodian may deposit
-------------------------------------------
and/or maintain securities owned by the Fund in a Securities System in
accordance with applicable Federal
5
<PAGE>
Reserve Board and SEC rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in a Securities System
Account which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-
entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Securities System
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer securities sold for the account of
the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Securities
System Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of the
Fund. Copies of all advices from the Securities System of transfers
of securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the Fund
at its request. Upon request, the Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund in
the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's transactions
in the Securities System for the account of the Fund;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System;
5) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the Securities System or any other
person which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Fund has not been made whole
for any such loss or damage.
6
<PAGE>
2.9 Fund Assets Held in the Custodian's Direct Paper System. The Custodian
-------------------------------------------------------
may deposit and/or maintain securities owned by the Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will
be effected in the absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct Paper
System only if such securities are represented in Direct Paper System
Account which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the Fund
which are maintained in the Direct Paper System shall identify by
book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account of
the Fund upon the making of an entry on the records of the Custodian
to reflect such payment and transfer of securities to the account of
the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for the
account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each transfer to
or from the account of the Fund, in the form of a written advice or
notice, of Direct Paper on the next business day following such
transfer and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transaction in the Securities System for
the account of the Fund;
6) The Custodian shall provide the Fund with any report on its system of
internal accounting control as the Fund may reasonably request from
time to time.
2.10 Segregated Account. The Custodian shall upon receipt of Proper
------------------
Instructions from the Fund establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may
be transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.8 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the CFTC or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating
cash or government securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the
Fund
7
<PAGE>
with the procedures required by Investment Company Act Release No. 10666,
or any subsequent release or releases of the SEC relating to the
maintenance of segregated accounts by registered investment companies and
(iv) for other proper purposes, but only, in the case of clause (iv), upon
--- ----
receipt of Proper Instructions from the Fund setting forth the purpose or
purposes of such segregated account and declaring such purposes to be
proper purposes.
2.11 Ownership Certificates for Tax Purposes. The Custodian shall execute
---------------------------------------
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of the Fund held by it and in connection with
transfers of such securities.
2.12 Proxies. The Custodian shall, with respect to the securities held
-------
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of
the Fund or a nominee of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to
the Fund such proxies, all proxy soliciting materials and all notices
relating to such securities.
2.13 Communications Relating to Fund Securities. Subject to the provisions
------------------------------------------
of Section 2.3, the Custodian shall transmit promptly to the Fund all
written information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund) received by
the Custodian from issuers of the securities being held for the Fund. With
respect to tender or exchange offers, the Custodian shall transmit promptly
to the Fund all written information received by the Custodian from issuers
of the securities whose tender or exchange is sought and from the party (or
his agents) making the tender or exchange offer. If the Fund desires to
take action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.14 Reports to Fund by Independent Public Accountants The Custodian shall
-------------------------------------------------
provide the Fund, at such times as the Fund may reasonably require, with
reports by independent public accountants on the accounting system,
internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including securities
deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports, shall
be of sufficient scope and in sufficient detail, as may reasonably be
required by the Fund, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if there are no
such inadequacies, the reports shall so state.
8
<PAGE>
3. Proper Instructions
-------------------
Proper Instructions as used throughout this Contract means a writing signed
or initialed by one or more person or persons as the Board of Trustees shall
have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
instructions are consistent with the security procedures agreed to by the Fund
and the Custodian including, but not limited to, the security procedures
selected by the Fund on the Funds Transfer Addendum to this Contract. For
purposes of this Article, Proper Instructions shall include instructions
received by the Custodian pursuant to any three-party agreement which requires a
segregated asset account in accordance with Section 2.12.
4. Actions Permitted without Express Authority
-------------------------------------------
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to
--------
the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as
otherwise directed by the Board of Trustees.
5. Evidence of Authority
---------------------
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by the
Board of Trustees pursuant to the Declaration of Trust as described in such
vote, and such vote may be considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
9.
<PAGE>
6. Duties of Custodian with Respect to the Books of Account and Calculation of
---------------------------------------------------------------------------
Net Asset Value and Net Income
------------------------------
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees to keep the books of
account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate weekly the net income
of the Fund as described in the Fund's registration statement on Form N-2 under
the 1940 Act as filed with the SEC (the "Registration Statement") and shall
advise the Fund and the Transfer Agent weekly of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the weekly income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective Registration Statement.
7. Records
-------
The Custodian shall with respect to the Fund create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the SEC. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by the Fund and held by the Custodian and shall,
when requested to do so by the Fund and for such compensation as shall be agreed
upon between the Fund and the Custodian, include certificate numbers in such
tabulations.
8. Opinion of Fund's Independent Accountants
-----------------------------------------
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Registration Statement, and Form N-SAR or
other annual reports to the SEC and with respect to any other requirements of
the SEC.
9. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund and
the Custodian.
10.
<PAGE>
10. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties, including any
futures commission merchant acting pursuant to the terms of a three-party
futures or options agreement. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this Contract, but shall be
kept indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence. It shall be entitled
to rely on and may act upon advice of counsel (who may be counsel for the Fund)
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or securities for any purpose (including but not limited to
securities settlements and assumed settlement) or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's assets to the
extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
11. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of the date of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
--------
however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Fund may at any time
by action of its Board of Trustees (i) substitute another bank or trust company
for the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the
11.
<PAGE>
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
12. Successor Custodian
-------------------
If a successor custodian shall be appointed by the Board of Trustees, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Trustees, deliver at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian
and all instruments held by the Custodian relative thereto and all other
property held by it under this Contract and to transfer to an account of such
successor custodian all of the Fund's securities held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
13. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian and the
Fund, may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
--------
shall contravene any
12.
<PAGE>
applicable federal or state regulations or any provision of the Declaration of
Trust. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
14. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
15. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
16. Reproduction of Documents
-------------------------
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm, micro-
card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
17. Notices
-------
Any notice, instruction or other instrument required to be given hereunder
may be delivered in person to the offices of the parties as set forth herein
during normal business hours or delivered prepaid registered mail or by telex,
cable or facsimile to the parties at the following addresses or such other
addresses as may be notified by any party from time to time.
To the Fund: The BlackRock Pennsylvania Strategic Municipal Trust
c/o BlackRock Financial Management, Inc.
345 Park Avenue
New York, New York, 10154
Attention: Armistead Nash
Telephone: 212-754-5577
Facsimile: 212-754-8775
13.
<PAGE>
To the Custodian: State Street Bank and Trust Company
One Heritage Drive/JPB 2S
North Quincy, Massachusetts 02171
Attention: William M. Marvin, Vice President
Telephone: 617-985-6829
Facsimile: 617-985-5271
Such notice, instruction or other instrument shall be deemed to have been
served in the case of a registered letter at the expiration of five business
days after posting, in the case of cable twenty-four hours after dispatch and,
in the case of telex, immediately on dispatch and if delivered outside normal
business hours it shall be deemed to have been received at the next time after
delivery when normal business hours commence and in the case of cable, telex or
facsimile on the business day after the receipt thereof. Evidence that the
notice was properly addressed, stamped and put into the post shall be conclusive
evidence of posting.
18. Data Access Services Addendum
-----------------------------
The Custodian and the Fund each agree to abide by the terms of the Data
Access Services Addendum attached hereto.
19. Shareholder Communications Election
-----------------------------------
SEC Rule 14b-2 requires banks which hold securities for the account of
customers to respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of securities of that issuer held by
the bank unless the beneficial owner has expressly objected to disclosure of
this information. In order to comply with the rule, the Custodian needs the
Fund to indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [X] The Custodian is not authorized to release the Fund's name,
address, and share positions.
14.
<PAGE>
SIGNATURE PAGE
--------------
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the twenty-third day of August, 1999.
ATTEST: THE BLACKROCK PENNSYLVANIA
STRATEGIC MUNICIPAL TRUST
__________________ By:________________________________________
Name: Name:
Title:
ATTEST: STATE STREET BANK AND TRUST COMPANY
__________________ By:________________________________________
Stephanie L. Poster Ronald E. Logue, Vice Chairman
15.
<PAGE>
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
----------------------------------------------------
THIS ADDENDUM to the Custodian Agreement (as such term is defined below)
between The BlackRock Pennsylvania Strategic Municipal Trust (the "Customer")
and State Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
the Customer pursuant to that certain Custodian Agreement (the "Custodian
Agreement") dated as of August 23, 1999;
WHEREAS, State Street has developed and utilizes proprietary accounting and
other systems, including State Street's proprietary Multicurrency HORIZONSM
Accounting System, in its role as custodian of the Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to the Customer certain Data Access
Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Addendum.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
(a) System. Subject to the terms and conditions of this Addendum, State
------
Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZONSM Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports and information, solely on computer hardware,
system software and telecommunication links as listed in Attachment B (the
"Designated Configuration") of the Customer, or certain third parties approved
by State Street that serve as investment advisors or investment managers or in
other service capacities to the Customer such as the Customer's independent
auditors (each, an "Investment Advisor"), solely with respect to the Customer,
or on any designated substitute or back-up equipment configuration with State
Street's written consent, such consent not to be unreasonably withheld.
(b) Data Access Services. State Street agrees to make available to the
--------------------
Customer the Data Access Services subject to the terms and conditions of this
Addendum and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Addendum.
(c) Additional Services. State Street may from time to time agree to make
-------------------
available to the Customer additional Systems that are not described in the
attachments to this Addendum. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Addendum shall govern, the Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Customer acknowledge that in connection with the Data
Access Services provided under this Addendum, the Customer will have access,
through the Data Access Services, to Customer Data and to functions of State
Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
(i)
<PAGE>
3. LIMITATION ON SCOPE OF USE
(a) Designated Equipment; Designated Location. The System and the Data
-----------------------------------------
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of the Customer or the Investment Advisor located
in New York, New York ("Designated Location").
(b) Designated Configuration; Trained Personnel. State Street shall be
-------------------------------------------
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable both
parties to perform their respective obligations under this Addendum. State
Street agrees to use commercially reasonable efforts to maintain the System so
that it remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.
(c) Scope of Use. The Customer will use the System and the Data Access
------------
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. The Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Addendum, (iii) use the System or the Data Access Services
for any fund, trust or other investment vehicle without the prior written
consent of State Street, (iv) allow access to the System or the Data Access
Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or the Data
Access Services to be redistributed or retransmitted to another computer,
terminal or other device for other than use for or on behalf of the Customer or
(vi) modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
(d) Other Locations. Except in the event of an emergency or of a planned
---------------
System shutdown, the Customer's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, the Customer may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. The Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
(e) Title. Title and all ownership and proprietary rights to the System,
-----
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
(f) No Modification. Without the prior written consent of State Street,
---------------
the Customer shall not modify, enhance or otherwise create derivative works
based upon the System, nor shall the Customer reverse engineer, decompile or
otherwise attempt to secure the source code for all or any part of the System.
(g) Security Procedures. The Customer shall comply with data access
-------------------
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. The Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Agreement.
(h) Inspections. State Street shall have the right to inspect the use of
-----------
the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Addendum. The on-site
(ii)
<PAGE>
inspections shall be upon prior written notice to the Customer and the
Investment Advisor and at reasonably convenient times and frequencies so as not
to result in an unreasonable disruption of the Customer's or the Investment
Advisor's business.
4. PROPRIETARY INFORMATION
(a) Proprietary Information. The Customer acknowledges and State Street
-----------------------
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to the Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in the strictest confidence and secure and protect it in
a manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder. The Customer further
acknowledges that State Street shall not be required to provide the Investment
Advisor with access to the System unless it has first received from the
Investment Advisor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C to this Addendum. The Customer shall
use all commercially reasonable efforts to assist State Street in identifying
and preventing any unauthorized use, copying or disclosure of the Proprietary
Information or any portions thereof or any of the logic, formats or designs
contained therein.
(b) Cooperation. Without limitation of the foregoing, the Customer shall
-----------
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Addendum, and the Customer will, at its expense, co-
operate with State Street in seeking injunctive or other equitable relief in the
name of the Customer or State Street against any such person.
(c) Injunctive Relief. The Customer acknowledges that the disclosure of
-----------------
any Proprietary Information, or of any information which at law or equity ought
to remain confidential, will immediately give rise to continuing irreparable
injury to State Street inadequately compensable in damages at law. In addition,
State Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
(d) Survival. The provisions of this Section 4 shall survive the
--------
termination of this Addendum.
5. LIMITATION ON LIABILITY
(a) Limitation on Amount and Time for Bringing Action. The Customer agrees
-------------------------------------------------
that any liability of State Street to the Customer or any third party arising
out of State Street's provision of Data Access Services or the System under this
Addendum shall be limited to the amount of custody fees paid by the Customer for
the preceding 24 months. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Addendum may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
(b) Limited Warranties. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
------------------
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET.
(c) Third-Party Data. Organizations from which State Street may obtain
----------------
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
(iii)
<PAGE>
(d) Regulatory Requirements. As between State Street and the Customer, the
-----------------------
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
(e) Force Majeure. Neither party shall be liable for any costs or damages
-------------
due to delay or nonperformance under this Addendum arising out of any cause or
event beyond such party's control, including without limitation, cessation of
services hereunder or any damages resulting therefrom to the other party, or the
Customer as a result of work stoppage, power or other mechanical failure,
computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor and (ii) any loss resulting from incorrect Client Originated
Electronic Financial Instructions. State Street shall be entitled to rely on
the validity and authenticity of Client Originated Electronic Financial
Instructions without undertaking any further inquiry as long as such instruction
is undertaken in conformity with security procedures established by State Street
from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Addendum, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by the Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
(a) Training. State Street agrees to provide training, at a designated
--------
State Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. The Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Addendum.
(b) Installation and Conversion. State Street shall be responsible for the
---------------------------
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. The Customer shall have the following responsibilities
in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely acquisition
and maintenance of the hardware and software that attach to the
Designated Configuration in order to use the Data Access Services at
the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this Addendum.
9. SUPPORT
During the term of this Addendum, State Street agrees to provide the
support services set out in Attachment D to this Addendum.
(iv)
<PAGE>
10. TERM OF ADDENDUM
(a) Term of Addendum. This Addendum shall become effective on the date of
----------------
its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
(b) Termination of Addendum. Either party may terminate this Addendum (i)
-----------------------
for any reason by giving the other party at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty days' notice in the case of notice from the Customer to State
Street of termination; or (ii) immediately for failure of the other party to
comply with any material term and condition of this Addendum by giving the other
party written notice of termination. In the event the Customer shall cease
doing business, shall become subject to proceedings under the bankruptcy laws
(other than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Addendum and the rights granted hereunder shall, at
the option of State Street, immediately terminate with notice to the Customer.
This Addendum shall in any event terminate as to any Customer within 90 days
after the termination of the Custodian Agreement applicable to such Customer.
(c) Termination of the Right to Use. Upon termination of this Addendum for
-------------------------------
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Addendum for any
reason, the Customer shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either party terminates this Addendum or the Custodian Agreement
for any reason other than the Customer's breach, State Street shall provide the
Data Access Services for a period of time and at a price to be agreed upon by
the parties.
11. MISCELLANEOUS
(a) Assignment; Successors. This Addendum and the rights and obligations
----------------------
of the Customer and State Street hereunder shall not be assigned by either party
without the prior written consent of the other party, except that State Street
may assign this Addendum to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
(b) Survival. All provisions regarding indemnification, warranty,
--------
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Addendum.
(c) Entire Agreement. This Addendum and the attachments hereto constitute
----------------
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This Addendum is not intended to supersede or modify the duties and liabilities
of the parties hereto under the Custodian Agreement or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No single waiver
of any right hereunder shall be deemed to be a continuing waiver.
(d) Severability. If any provision or provisions of this Addendum shall
------------
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
(e) Governing Law. This Addendum shall be interpreted and construed in
-------------
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
(v)
<PAGE>
ATTACHMENT A
Multicurrency HORIZON(SM) Accounting System
System Product Description
--------------------------
I. The Multicurrency HORIZON(SM) Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest(R) is designed to provide customer access to the following
information maintained on The Multicurrency HORIZON(SM) Accounting System: 1)
cash transactions and balances; 2) purchases and sales; 3) income receivables;
4) tax refund receivables; 5) daily priced positions; 6) open trades; 7)
settlement status; 8) foreign exchange transactions; 9) trade history, and 10)
daily, weekly and monthly evaluation services.
III. SaFiRe(SM). SaFiRe(SM) is designed to provide the customer with the ability
------
to prepare its own financial reports by permitting the customer to access
customer information maintained on the Multicurrency HORIZON(R) Accounting
System, to organize such information in a flexible reporting format and to have
such reports printed on the customer's desktop or by its printing provider.
(vi)
<PAGE>
ATTACHMENT B
*Designated Configuration
(vii)
<PAGE>
ATTACHMENT C
Undertaking
The Undersigned understands that in the course of its employment as
Investment Advisor to The BlackRock Pennsylvania Strategic Municipal Trust (the
"Customer") it will have access to State Street Bank and Trust Company's ("State
Street") Multicurrency HORIZON(SM) Accounting System and other information
systems (collectively, the "System").
The Undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
BLACKROCK ADVISORS, INC.
By:_______________________________
Title:____________________________
Date:_____________________________
(viii)
<PAGE>
ATTACHMENT C
Undertaking
The Undersigned understands that in the course of its employment as
Investment Sub-Advisor to The BlackRock Pennsylvania Strategic Municipal Trust
(the "Customer") it will have access to State Street Bank and Trust Company's
("State Street") Multicurrency HORIZON(SM) Accounting System and other
information systems (collectively, the "System").
The Undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
BLACKROCK FINANCIAL MANAGEMENT, INC.
By:________________________________________
Title:_____________________________________
Date:______________________________________
(ix)
<PAGE>
ATTACHMENT C
Undertaking
The Undersigned understands that in the course of its employment as
Independent Auditor to The BlackRock Pennsylvania Strategic Municipal Trust (the
"Customer") it will have access to State Street Bank and Trust Company's ("State
Street") Multicurrency HORIZON(SM) Accounting System and other information
systems (collectively, the "System").
The Undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The Undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
DELOITTE & TOUCHE LLP
By:___________________________________
Title:________________________________
Date:_________________________________
(x)
<PAGE>
ATTACHMENT D
Support
During the term of this Addendum, State Street agrees to provide the following
on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
-----------------
Street's Multicurrency HORIZON(SM) Help Desk and Customer Assistance Center
between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for
the purpose of obtaining answers to questions about the use of the System, or to
report apparent problems with the System. From time to time, the Customer shall
provide to State Street a list of persons, not to exceed five in number, who
shall be permitted to contact State Street for assistance (such persons being
referred to as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to
-----------------
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
-------------------
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
-------------------
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
--------------------
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to
---------------------
support the Customer's use of the System: (i) for use on any computer equipment
or telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Addendum.
(xi)
<PAGE>
FUNDS TRANSFER ADDENDUM
OPERATING GUIDELINES [LOGO OF STATE STREET
- --------------------
APPEARS HERE]
1. OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
Client's (as named below) account(s) upon the receipt of a payment order in
compliance with the selected Security Procedure chosen for funds transfer and in
the amount of money that State Street has been instructed to transfer. State
Street shall execute payment orders in compliance with the Security Procedure
and with the Client's instructions on the execution date provided that such
payment order is received by the customary deadline for processing such a
request, unless the payment order specifies a later time. All payment orders
and communications received after this time will be deemed to have been received
on the next business day.
2. SECURITY PROCEDURE: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client shall restrict access to
confidential information relating to the Security Procedure to authorized
persons as communicated in writing to State Street. The Client must notify
State Street immediately if it has reason to believe unauthorized persons may
have obtained access to such information or of any change in the Client's
authorized personnel. State Street shall verify the authenticity of all
instructions according to the Security Procedure.
3. ACCOUNT NUMBERS: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern.
4. REJECTION: State Street reserves the right to decline to process or delay
the processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of State Street's receipt of
such payment order; (b) if initiating such payment order would cause State
Street, in State Street's sole judgment, to exceed any volume, aggregate dollar,
network, time, credit or similar limits upon wire transfers which are applicable
to State Street; or (c) if State Street, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to detect
any erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
a Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of the amount credited to the Client in
connection with such entry, and the party making payment to the Client via such
entry shall not be deemed to have paid the amount of the entry.
9. CONFIRMATION STATEMENTS: Confirmation of State Street's execution of
payment orders shall ordinarily be provided within 24 hours notice which may be
delivered through State Street's proprietary information systems, such as, but
not limited to Horizon and GlobalQuest(R), or by facsimile or callback. The
Client must report any objections to the execution of a payment order within 30
days.
<PAGE>
FUNDS TRANSFER ADDENDUM
Security Procedure(s) Selection Form [LOGO OF STATE STREET
- ------------------------------------
APPEARS HERE]
Please select one or more of the funds transfer security procedures indicated
below.
[_]SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions.
Selection of this security procedure would be most appropriate for existing
SWIFT members.
[_]Standing Instructions
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client.
The Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.
[_]Remote Batch Transmission
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers.
Clients selecting this option should have an existing facility for completing
CPU-CPU transmissions. This delivery mechanism is typically used for high-volume
business.
[_]Global Horizon Interchange(SM) Funds Transfer Service
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street.
This delivery mechanism is most appropriate for Clients with a low-to-medium
number of transactions (5-75 per day), allowing Clients to enter, batch, and
review wire transfer instructions on their PC prior to release to State Street.
[_]Telephone Confirmation (Callback)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not have the
capability to use other security procedures.
[_]Repetitive Wires
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires
will be subject to a mutually agreed upon limit. If the payment order exceeds
the established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually.
This alternative is recommended whenever funds are frequently transferred
between the same two accounts.
[_]Transfers Initiated by Facsimile
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client.
We provide this option for Clients who wish to batch wire instructions and
transmit these as a group to State Street Mutual Fund Services once or several
times a day.
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO OF STATE STREET
APPEARS HERE]
[_]Automated Clearing House (ACH)
State Street receives an automated transmission or a magnetic tape from a Client
for the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each transmission or
tape must be authenticated by the Client. Clients using ACH must select one or
more of the following delivery options:
[_]Global Horizon Interchange Automated Clearing House Service
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions
in standard NACHA formats.
[_]Transmission from Client PC to State Street Mainframe with Telephone Callback
[_]Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback
[_]Transmission from DST Systems to State Street Mainframe with Encryption
[_]Magnetic Tape Delivered to State Street with Telephone Callback
State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective ____________ for payment
orders initiated by our organization.
Key Contact Information
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
_________________________________ ______________________________
Name Name
_________________________________ ______________________________
Address Address
_________________________________ ______________________________
City/State/Zip Code City/State/Zip Code
_________________________________ ______________________________
Telephone Number Telephone Number
_________________________________ ______________________________
Facsimile Number Facsimile Number
_________________________________
SWIFT Number
_________________________________
Telex Number
<PAGE>
FUNDS TRANSFER ADDENDUM
[LOGO OF STATE STREET
APPEARS HERE]
INSTRUCTION(S)
- --------------
TELEPHONE CONFIRMATION
- ----------------------
Fund The BlackRock Pennsylvania Strategic Municipal Trust
--------------------------------------------------------
Investment Adviser BlackRock Advisors, Inc. and Sub-adviser, BlackRock
-------------------------------------------------------
Financial Management, Inc.
--------------------------
Authorized Initiators
Please Type or Print
Please provide a listing of Fund officers or other individuals are currently
authorized to INITIATE wire transfer instructions to State Street:
NAME TITLE (Specify whether SPECIMEN SIGNATURE
position is with Fund or
Investment Adviser)
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
Authorized Verifiers
Please Type or Print
Please provide a listing of Fund officers of other individuals who will be
CALLED BACK to verify the initiation of repetitive wires of $10 million or more
and all non repetitive wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
<PAGE>
================================================================================
EXHIBIT K
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE BLACK ROCK PENNSYLVANIA STRATEGIC MUNICIPAL TRUST
and
STATE STREET BANK AND TRUST COMPANY
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE BANK 1
ARTICLE 2 FEES AND EXPENSES 3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE BANK 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND 4
ARTICLE 5 DATA ACCESS AND PROPRIETARY INFORMATION 4
ARTICLE 6 INDEMNIFICATION 6
ARTICLE 7 STANDARD OF CARE 7
ARTICLE 8 COVENANTS OF THE FUND AND THE BANK 7
ARTICLE 9 TERMINATION OF AGREEMENT 8
ARTICLE 10 ASSIGNMENT 9
ARTICLE 11 AMENDMENT 9
ARTICLE 12 MASSACHUSETTS LAW TO APPLY 9
ARTICLE 13 FORCE MAJEURE 10
ARTICLE 14 CONSEQUENTIAL DAMAGES 10
ARTICLE 15 MERGER OF AGREEMENT 10
ARTICLE 16 SURVIVAL 10
ARTICLE 17 SEVERABILITY 10
ARTICLE 18 COUNTERPARTS 10
</TABLE>
<PAGE>
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
------------------------------------------------
This Transfer Agency and Stock Transfer Services Agreement (the
"Agreement"), dated as of August 18, 1999, is between The Black Rock
Pennsylvania Strategic Municipal Trust, a Delaware a business trust (the
"Trust") and State Street Bank and Trust Company, a national banking
association.
WHEREAS, the Fund desires to appoint the Bank as its registrar, transfer
agent, dividend disbursing agent and agent in connection with certain other
activities and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of the Bank
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby employs and appoints the Bank to act as, and the Bank agrees to
act as registrar, transfer agent for the Fund's authorized and issued shares of
its common stock ("Shares"), dividend disbursing agent and agent in connection
with any dividend reinvestment plan as set out in the prospectus of the Fund,
corresponding to the date of this Agreement.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and the Bank, the Bank shall:
(i) Issue and record the appropriate number of Shares as
authorized and hold such Shares in the appropriate Shareholder
account
1
<PAGE>
(ii) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate documentation;
(iii) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(iv) Act as agent for Shareholders pursuant to the dividend
reinvestment and cash purchase plan as amended from time to time
in accordance with the terms of the agreement to be entered into
between the Shareholders and the Bank in substantially the form
attached as Exhibit A hereto;
(v) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt by
the Bank of indemnification satisfactory to the Bank and
protecting the Bank and the Fund, and the Bank at its option, may
issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such
indemnity.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall: (i) perform all
of the customary services of a registrar, transfer agent, dividend disbursing
agent and agent of the dividend reinvestment and cash purchase plan as described
in Article 1 consistent with those requirements in effect as of the date of this
Agreement. The detailed definition, frequency, limitations and associated costs
(if any) set out in the attached fee schedule, include but are not limited to:
maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, and mailing Shareholder reports to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts where
applicable, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all registered Shareholders.
(c) The Bank shall provide additional services on behalf of the Fund
(i.e., escheatment services) which may be agreed upon in writing between the
Fund and the Bank.
2
<PAGE>
Article 2 Fees and Expenses
2.01 For the performance by the Bank pursuant to this Agreement, the
Fund agrees to pay the Bank an annual maintenance fee as set out in the initial
fee schedule attached hereto. Such fees and out-of-pocket expenses and advances
identified under Section 2.02 below may be changed from time to time subject to
mutual written agreement between the Fund and the Bank.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Bank for out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by the Bank at the request or with the consent of the
Fund, will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage and
the cost of materials for mailing of dividends, proxies, Fund reports and other
mailings to all Shareholder accounts shall be advanced to the Bank by the Fund
at least seven (7) days prior to the mailing date of such materials.
Article 3 Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the
Commonwealth of Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3
<PAGE>
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4.04 It is a closed-end, diversified investment company registered
under the Investment Company Act of 1940, as amended.
4.05 To the extent required by federal securities laws a registration
statement under the Securities Act of 1933, as amended is currently effective
and appropriate state securities law filings have been made with respect to all
Shares of the Fund being offered for sale; information to the contrary will
result in immediate notification to the Bank.
4.06 It shall make all required filings under federal and state
securities laws.
Article 5 Data Access and Proprietary Information
5.01 The Fund acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and other
information furnished to the Fund by the Bank are provided solely in connection
with the services rendered under this Agreement and constitute copyrighted trade
secrets or proprietary information of substantial value to the Bank. Such
databases, programs, formats, designs, techniques and other information are
collectively referred to below as "Proprietary Information." The Fund agrees
that it shall treat all Proprietary Information as proprietary to the Bank and
further agrees that it shall not
4
<PAGE>
divulge any Proprietary Information to any person or organization except as
expressly permitted hereunder. The Fund agrees for itself and its employees and
agents:
(a) to use such programs and databases (i) solely on the Fund
computers, or (ii) solely from equipment at the locations agreed to
between the Fund and the Bank and (iii) in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any way (other than in
the normal course of performing processing on the Funds' computers)
any part of any Proprietary Information;
(c) to refrain from obtaining unauthorized access to any programs,
data or other information not owned by the Fund, and if such access is
accidentally obtained, to respect and safeguard the same Proprietary
Information;
(d) to refrain from causing or allowing information transmitted from
the Bank's computer to the Funds' terminal to be retransmitted to any
other computer terminal or other device except as expressly permitted
by the Bank, (such permission not to be unreasonably withheld);
(e) that the Fund shall have access only to those authorized
transactions as agreed to between the Fund and the Bank; and
(f) to honor reasonable written requests made by the Bank to protect
at the Bank's expense the rights of the Bank in Proprietary
Information at common law and under applicable statues.
5.02 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event the Bank shall be entitled to rely on
the validity and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by the Bank from time to time.
5
<PAGE>
Article 6 Indemnification
6.01 The Bank shall not be responsible for, and the Fund shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors required
to be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or willful misconduct
which arise out of the breach of any representation or warranty of the Fund
hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services which (i) are
received by the Bank or its agents or subcontractors, and (ii) have been
prepared, maintained or performed by the Fund or any other person or firm on
behalf of the Fund including but not limited to any previous transfer agent
registrar.
(d) The reliance on, or the carrying out by the Bank or its agents
or subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any federal or state
securities laws requiring that such shares be registered or in violation of any
stop order or other determiniation or ruling by any federal or state agency with
respect to the offer or sale of such Shares; and
6.02 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The Bank,
its agents and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund, reasonably believed
to be genuine and to have been signed by the proper person or persons, or upon
any instruction,
6
<PAGE>
information, data, records or documents provided the Bank or its agents or
subcontractors by telephone, in person, machine readable input, telex, CRT data
entry or other similar means authorized by the Fund, and shall not be held to
have notice of any change of authority of any person, until receipt of written
notice thereof from the Fund. The Bank, its agents and subcontractors shall also
be protected and indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile signatures of the
officers of the Fund, and the proper countersignature of any former transfer
agent or former registrar, or of a co-transfer agent or co-registrar.
6.03 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments
concerning such claim. The Fund shall have the option to participate with the
Bank in the defense of such claim or to defend against said claim in its own
name or in the name of the Bank. The Bank shall in no case confess any claim or
make any compromise in any case in which the Fund may be required to indemnify
the Bank except with the Fund's prior written consent.
Article 7 Standard of Care
7.01 The Bank shall at all times act in good faith and agrees to use
its best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct of that of its employees.
Article 8 Covenants of the Fund and the Bank
8.01 The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Board of Directors of
the Fund authorizing the appointment of the Bank and the execution and delivery
of this Agreement.
7
<PAGE>
(b) A copy of the Articles of Incorporation and By-Laws of the Fund
and all amendments thereto.
8.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
8.03 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
8.04 The Bank and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In cases of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
Article 9 Termination of Agreement
9.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other.
9.02 Should the Fund exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and material will be
borne by the Fund.
8
<PAGE>
Additionally, the Bank reserves the right to charge for any other reasonable
expenses associated with such termination and/or a charge equivalent to the
average of three (3) month's fees.
Article 10 Assignment
10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
10.03 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) EquiServe Limited Partnership.,
a Delaware limited partnership ("EquiServe"), which is duly registered as a
transfer agent pursuant to Section 17A(c)(2) of the Securities Exchange Act of
1934 ("Section 17A(c)(2)"), or (ii) a EquiServe affiliate duly registered as a
transfer agent pursuant to Section 17A(c)(2), provided, however, that the Bank
shall be as fully responsible to the Fund for the acts and omissions of any
subcontractor as it is for its own acts and omissions.
Article 11 Amendment
11.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors of the Fund.
Article 12 Massachusetts Law to Apply
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
Article 13 Force Majeure
13.01 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or
9
<PAGE>
damage reasonably beyond its control, or other causes reasonably beyond its
control, such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
Article 14 Consequential Damages
14.01 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
Article 15 Merger of Agreement
15.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
Article 16 Survival
16.01 All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Agreement.
Article 17 Severability
17.01 If any provision or provisions of this Agreement shall be held
to be invalid, unlawful, or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
Article 18 Counterparts
18.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
The Black Rock Pennsylvania Strategic Municipal Trust
BY:__________________________________________
ATTEST:
________________________________________
State Street Bank and Trust Company
BY:___________________________________________
Vice President
ATTEST:
______________________________________
11
