Exhibit 10.36

 

Conformed Copy

 

$250,000,000

 

BLACKROCK, INC.

 

2.625% Convertible Debentures Due 2035

 

PURCHASE AGREEMENT

 

February 16, 2005

 

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Exhibit 10.36

 

SCHEDULE A

 

The following table sets forth the hypothetical stock price and the number of
Additional Shares to be issuable per $1,000 principal amount of Debentures:

 

     Stock Price

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Effective Date

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   $77.58

--------------------------------------------------------------------------------

   $85.00

--------------------------------------------------------------------------------

   $90.00

--------------------------------------------------------------------------------

   $95.00

--------------------------------------------------------------------------------

   $100.00

--------------------------------------------------------------------------------

   $105.00

--------------------------------------------------------------------------------

   $110.00

--------------------------------------------------------------------------------

   $115.00

--------------------------------------------------------------------------------

   $120.00

--------------------------------------------------------------------------------

   $130.00

--------------------------------------------------------------------------------

   150.00

--------------------------------------------------------------------------------

   $175.00

--------------------------------------------------------------------------------

   $200.00

--------------------------------------------------------------------------------

   $250.00

--------------------------------------------------------------------------------

   $300.00

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February 23, 2005

   3.16    2.45    2.08    1.77    1.52    1.31    1.13    0.99    0.87    0.68
   0.46    0.31    0.23    0.15    0.10

February 15, 2006

   3.05    2.32    1.93    1.62    1.36    1.16    0.99    0.85    0.73    0.56
   0.36    0.24    0.18    0.12    0.08

February 15, 2007

   2.99    2.21    1.81    1.48    1.22    1.01    0.84    0.70    0.59    0.44
   0.27    0.18    0.14    0.09    0.06

February 15, 2008

   2.95    2.10    1.66    1.32    1.04    0.83    0.66    0.53    0.43    0.30
   0.17    0.12    0.09    0.06    0.04

February 15, 2009

   2.97    2.00    1.50    1.10    0.80    0.58    0.42    0.30    0.22    0.14
   0.08    0.06    0.05    0.03    0.02

February 15, 2010

   3.16    2.04    1.38    0.80    0.27    —      —      —      —      —     
—      —      —      —      —  

 

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Exhibit 10.36

 

SCHEDULE B

 

BLACKROCK, INC.

2.625% Convertible Debentures Due 2035

 

No.                     

 

Date

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Principal Amount

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   Notation Explaining
Principal Amount
Recorded

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   Authorized Signature
of Trustee or
Custodian

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February 16, 2005

 

Morgan Stanley & Co. Incorporated

Citigroup Global Markets Inc.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

UBS Securities LLC

 

c/o Morgan Stanley & Co. Incorporated

  1585 Broadway

  New York, New York 10036

 

Dear Sirs and Mesdames:

 

BlackRock, Inc., a Delaware corporation (the “Company”), proposes to issue and
sell to the several purchasers named in Schedule I hereto (the “Initial
Purchasers”)

 

$250,000,000 aggregate principal amount of its 2.625% Convertible Debentures Due
2035 (the “Securities”) to be issued pursuant to the provisions of an Indenture
to be dated as of February 23, 2005 (the “Indenture”) between the Company and
JPMorgan Chase Bank, N.A., as Trustee (the “Trustee”). The Securities will be
convertible into shares of the Company’s Class A common stock, $0.01 par value
(the “Underlying Securities”).

 

The Securities and the Underlying Securities will be offered without being
registered under the Securities Act of 1933, as amended (the “Securities Act”),
to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act.

 

The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the Closing
Date (as defined herein) between the Company and the Initial Purchasers (the
“Registration Rights Agreement”).

 

In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the “Preliminary Memorandum”) and will prepare
a final offering memorandum (the “Final Memorandum” and, with the Preliminary
Memorandum, each a “Memorandum”) including or incorporating by reference a
description of the terms of the Securities and the Underlying Securities, the
terms of the offering and a description of the Company. As used herein, the term
“Memorandum” shall include in each case the documents incorporated by reference
therein. The terms “supplement”, “amendment” and “amend” as used herein with
respect to a Memorandum shall include all documents deemed to be incorporated by
reference in the Preliminary Memorandum or Final Memorandum that are filed
subsequent to the date of such Memorandum with the Securities and Exchange
Commission (the

 

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“Commission”) pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).

 

1. Representations and Warranties. The Company represents and warrants to, and
agrees with, you that:

 

(a) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in either Memorandum complied or will comply when
so filed in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder and (ii) the Preliminary Memorandum
does not contain and the Final Memorandum, in the form used by the Initial
Purchasers to confirm sales and on the Closing Date (as defined in Section 4),
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in either Memorandum based upon information relating to
any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through you expressly for use therein.

 

(b) The Company has been duly incorporated, is validly existing as a corporation
in good standing under the laws of the Delaware, has the corporate power and
authority to own or lease its property and to conduct its business as described
in each Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.

 

(c) Each subsidiary of the Company listed on Schedule II (the “subsidiaries”)
hereto has been duly organized, is validly existing as a corporation or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its formation, has the corporate or limited liability company
power and authority, as the case may be, to own or lease its property and to
conduct its business as described in each Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital stock or
membership interests, as the case may be, of each subsidiary of the Company have
been duly and validly authorized and issued and are owned directly or indirectly
by the Company, free and clear of all liens,

 

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encumbrances, equities or claims and the issued shares of capital stock are
fully paid and non-assessable.

 

(d) This Agreement has been duly authorized, executed and delivered by the
Company.

 

(e) The authorized capital stock of the Company conforms as to legal matters to
the description thereof contained in the Final Memorandum.

 

(f) The shares of common stock outstanding prior to the issuance of the
Securities have been duly authorized and validly issued and are fully paid and
non-assessable.

 

(g) The Securities have been duly authorized by the Company and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the terms
of this Agreement, will be valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and general
principles of equity, and will be entitled to the benefits of the Indenture
pursuant to which such Securities are to be issued and the Registration Rights
Agreement.

 

(h) The Underlying Securities issuable upon conversion of the Securities have
been duly authorized and reserved and, when issued upon conversion of the
Securities in accordance with the terms of the Securities, will be validly
issued, fully paid and non–assessable, and the issuance of the Underlying
Securities will not be subject to any preemptive or similar rights.

 

(i) Each of the Indenture and the Registration Rights Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
general principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited under
applicable law.

 

(j) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement, the Indenture, the
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law, statute, rule, regulation, or the certificate of
incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, any

 

3

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judgment, order or decree of any governmental body, agency, court or
self–regulatory organization having jurisdiction over the Company or any
subsidiary, and no filing with or consent, approval, authorization, license or
order of, or qualification or registration with, any governmental body, agency
or self-regulatory organization is required for the performance by the Company
of its obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Securities, except such as may be required by the securities or
Blue Sky laws of the various states or other jurisdictions in connection with
the offer and sale of the Securities and by Federal and state securities laws
with respect to the Company’s obligations under the Registration Rights
Agreement.

 

(k) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the financial condition, or
in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Preliminary Memorandum provided to
prospective purchasers of the Securities.

 

(l) There are no legal or governmental proceedings, actions, suits, inquiries or
investigations pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject other than (i) proceedings accurately described
in all material respects in each Memorandum and (ii) proceedings that would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole, or on the power or ability of the Company to perform its obligations
under this Agreement, the Indenture, the Registration Rights Agreement or the
Securities or to consummate the transactions contemplated by the Final
Memorandum.

 

(m) The Company and its subsidiaries are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants except where such
non-compliance would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.

 

(n) The Company is not, and solely after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Final Memorandum will not be, required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as
amended (the “1940 Act”).

 

4

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(o) Neither the Company nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act, an “Affiliate”) of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Securities
in a manner that would require the registration under the Securities Act of the
Securities or (ii) offered, solicited offers to buy or sold the Securities by
any form of general solicitation or general advertising (as those terms are used
in Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

 

(p) It is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended.

 

(q) The Securities satisfy the requirements set forth in Rule 144A(d)(3) under
the Securities Act.

 

(r) Each of the Company and its subsidiaries owns or possesses, or can acquire
on reasonable terms, all adequate patents, patent rights, licenses, inventions,
copyrights, know how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names necessary to carry on the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse affect on the Company and its subsidiaries, taken as a whole.

 

(s) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of its subsidiaries has been refused any
insurance coverage sought or applied for; and neither the company nor any of its
subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse affect on the Company
and its subsidiaries, taken as a whole, except as described in the Memorandum.

 

5

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(t) The Company and its subsidiaries possess all certificates, authorizations,
licenses, approvals, consents, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization, licenses, approval,
consent, permit or other authorization which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse affect on the Company and its subsidiaries, taken as a whole, except as
described in the Memorandum.

 

(u) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (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
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

(v) The Company has established and maintained disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) that are
adequate and effective and designed to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made known to its
chief executive officer and chief financial officer by others within those
entities.

 

(w) The consolidated financial statements incorporated by reference in the
Memorandum, together with related schedules and notes, present fairly in all
material respects the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations and
stockholders’ equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified, said financials have been prepared in
accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved, except as disclosed therein;
and the other financial information and data set forth in the Memorandum present
fairly, in all material respects, the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included or incorporated by reference in the Memorandum.

 

(x) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable

 

6

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title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Memorandum or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Memorandum.

 

(y) Each of BlackRock Advisors, Inc., BlackRock Institutional Management
Corporation, BlackRock Financial Management, Inc., BlackRock (Japan), Inc.,
BlackRock Capital Management, Inc., BlackRock HPB Management, LLC, State Street
Research Management Company, BlackRock Realty Advisors, Inc. and BlackRock
International Ltd. (together, the “Investment Adviser Subsidiaries”) is duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the “Advisers Act”) and none of the Investment Adviser Subsidiaries
is prohibited by any provision of the Advisers Act or the 1940 Act, or the
respective rules and regulations thereunder, from acting as an investment
adviser. The Investment Adviser Subsidiaries are the only direct or indirect
subsidiaries of the Company required to be registered as investment advisers
under the Advisers Act. Each of the Investment Adviser Subsidiaries is duly
registered, licensed or qualified as an investment adviser in each jurisdiction
where the conduct of its business requires such registration and is in
compliance with all federal, state and foreign laws requiring any such
registration, licensing or qualification or is subject to no material liability
or disability by reason of the failure to be so registered, licensed or
qualified in any such jurisdiction or to be in such compliance. None of the
Company or its other direct or indirect subsidiaries is required to be
registered, licensed or qualified as an investment adviser under the laws
requiring any such registration, licensing or qualification in any jurisdiction
in which it or such other subsidiaries conduct business or is subject to
material liability or disability by reason of the failure to be so registered,
licensed or qualified.

 

(z) Each of BlackRock Investments, Inc. and State Street Research Investment
Services (the “Broker Dealer Subsidiaries”) is duly registered, licensed or
qualified as a broker-dealer under the Exchange Act, and under the securities
laws of each jurisdiction where the conduct of its business requires such
registration and is in compliance with all federal, state and foreign laws
requiring such registration, licensing or

 

7

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qualification or is subject to no material liability or disability by reason of
the failure to be so registered, licensed or qualified in any such jurisdiction
or to be in such compliance. Each of the Broker Dealer Subsidiaries is a member
in good standing of NASD and each other self-regulatory organization where the
conduct of its business requires such membership. Neither the Company nor any of
the Company’s other direct or indirect subsidiaries is required to be
registered, licensed or qualified as a broker-dealer under the laws requiring
any such registration, licensing or qualification in any jurisdiction in which
it or such other subsidiaries conduct business or is subject to any material
liability or disability by reason of the failure to be so registered, licensed
or qualified except where the failure to be so registered, licensed or qualified
would not have a material adverse affect on the Company and its subsidiaries,
taken as a whole.

 

(aa) Each of the Investment Adviser Subsidiaries and the Broker Dealer
Subsidiaries is, has been and will upon consummation of the transactions
contemplated herein be, in compliance with, and each such entity has received no
notice of any kind of any violation of, (A) all laws, regulations, ordinances
and rules (including those of any non-governmental self-regulatory agencies)
applicable to it or its operations relating to investment advisory or
broker-dealer activities, as the case may be, and (B) all other laws,
regulations, ordinances and rules applicable to it and its operations, except,
in either case, where any failure to comply with any such law, regulation,
ordinance or rule would not have, individually or in the aggregate, a material
adverse effect on the Company and its subsidiaries taken as a whole.

 

(bb) Each entity for which the Investment Adviser Subsidiaries acts as
investment adviser and, to the best knowledge of the Investment Adviser
Subsidiaries, each entity for which the Investment Adviser Subsidiaries acts as
sub-adviser and, in each case, which is required to be registered with the
Commission as an investment company under the 1940 Act (a “Fund”) is, and upon
consummation of the transactions contemplated herein will be, duly registered
with the Commission as an investment company under the 1940 Act and to the best
knowledge of the Company, each Fund has been operated in compliance in all
material respects with the applicable provisions of the 1940 Act and the rules
and regulations thereunder and to the best knowledge of the Company, there are
no facts with respect to any such Fund that are likely to have a material
adverse effect on the Company and its subsidiaries taken as a whole. To the
knowledge of the Company, each Fund’s registration statement complies (or, in
the case of closed-end funds, complied at the date thereof) in all material
respects with the provisions of the Securities Act, the 1940 Act and the rules
and regulations thereunder and does not (or, in the case

 

8

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of closed-end funds, did not at the date thereof) contain any untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.

 

(cc) Each entity for which an Investment Adviser Subsidiary acts as investment
adviser and, to the best knowledge of the Investment Adviser Subsidiaries, each
entity for which the Investment Adviser Subsidiary acts as sub-adviser which
entity is not required to be registered with the Commission as an investment
company under the 1940 Act (an “Exempt Fund”) is not, and upon consummation of
the transactions contemplated herein will not be, required to register with the
Commission as an investment company under the 1940 Act and to the best knowledge
of the Company there are no facts with respect to any such Exempt Fund that are
likely to have a material adverse effect on the Company and its subsidiaries
taken as a whole. To the best knowledge of the Company, each Exempt Fund’s
offering documents comply in all material respects with the provisions of the
laws applicable to such offering and do not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.

 

(dd) Each agreement between the Company, any Investment Adviser Subsidiary, or
any other subsidiary of the Company on the one hand and any Fund, Exempt Fund or
private client on the other is a legal and valid obligation of the parties
thereto, and none of the Company, any Investment Adviser Subsidiary or any other
subsidiary of the Company is in breach or violation of or in default under any
such agreement which would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.

 

(ee) The offering contemplated by this Agreement will not constitute an
“assignment” as defined in the 1940 Act and the Advisers Act of any of the
investment advisory contracts to which the Company or any of its Subsidiaries is
a party.

 

2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the
several Initial Purchasers, and each Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the Securities set forth in Schedule I hereto opposite its name at a
purchase price of 98% of the principal amount thereof (the “Purchase Price”)
plus accrued interest, if any, to the Closing Date.

 

The Company hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Initial Purchasers, it will not,
during the period beginning on the date hereof and continuing to an including
the

 

9

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date that is 60 days after the date of the Final Memorandum, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
common stock or any securities convertible into or exercisable or exchangeable
for class A or class B common stock or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the class A or class B common stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of class A or class B common stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the sale of the
Securities under this Agreement, (B) the issuance by the Company of any shares
of class A or class B common stock upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof of which the Initial
Purchasers have been advised, (C) the issuance of the Underlying Securities upon
conversion of the Securities in accordance with the terms of the Indenture or
(D) the grant of options or stock under the Company’s stock incentive, dividend
reinvestment or other employee ownership or benefit plans is in effect on the
date hereof.

 

3. Terms of Offering. You have advised the Company that the Initial Purchasers
will make an offering of the Securities purchased by the Initial Purchasers
hereunder on the terms to be set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.

 

4. Payment and Delivery. Payment for the Securities shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several Initial
Purchasers at 10:00 a.m., New York City time, on February 23, 2005, or at such
other time on the same or such other date, not later than March 2, 2005, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the “Closing Date.”

 

The Securities shall be in definitive form or global form, as specified by you,
and registered in such names and in such denominations as you shall request in
writing not later than one full business day prior to the Closing Date. The
certificate evidencing the Securities shall be delivered to you on the Closing
Date for the respective accounts of the several Initial Purchasers, with any
transfer taxes payable in connection with the transfer of the Securities to the
Initial Purchasers duly paid, against payment of the Purchase Price therefor
plus accrued interest, if any, to the date of payment and delivery.

 

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5. Conditions to the Initial Purchasers’ Obligations. The several obligations of
the Initial Purchasers to purchase and pay for the Securities on the Closing
Date are subject to the following conditions:

 

(a) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date there shall not have occurred:

 

(i) any downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any of the
Company’s securities by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and

 

(ii) any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set forth in the
Preliminary Memorandum provided to prospective purchasers of the Securities
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum.

 

(b) The Initial Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in Section 5(a)(i) and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.

 

The officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.

 

(c) The Initial Purchasers shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit A. Such opinion shall be
rendered to the Initial Purchasers at the request of the Company and shall so
state therein.

 

(d) The Initial Purchaser shall have received on the Closing Date an opinion of
Robert P. Connolly, Managing Director, General Counsel and Secretary of the
Company, dated the Closing Date, to the effect set forth in Exhibit B. Such
opinion shall be rendered to the Initial Purchasers at the request of the
Company and shall so state therein.

 

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(e) The Initial Purchasers shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the Initial Purchasers, dated the Closing
Date, to the effect set forth in Exhibit B.

 

(f) The Initial Purchasers shall have received on each of the date hereof and
the Closing Date a letter, dated the date hereof or the Closing Date, as the
case may be, in form and substance reasonably satisfactory to the Initial
Purchasers, from Deloitte & Touche LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Final Memorandum; provided that the letter delivered on the
Closing Date shall use a “cut-off date” not earlier than the date hereof.

 

(g) The “lock-up” agreements, each substantially in the form of Exhibit C
hereto, between you and certain shareholders, officers and directors of the
Company listed on Schedule III hereto relating to sales and certain other
dispositions of shares of common stock or certain other securities, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date.

 

6. Covenants of the Company. In further consideration of the agreements of the
Initial Purchasers contained in this Agreement, the Company covenants with each
Initial Purchaser as follows:

 

(a) To furnish to you in New York City, without charge, prior to 10:00 a.m. New
York City time on the business day next succeeding the date of this Agreement
and during the period mentioned in Section 6(c), as many copies of the Final
Memorandum, any documents incorporated by reference therein and any supplements
and amendments thereto as you may reasonably request.

 

(b) Before amending or supplementing either Memorandum, to furnish to you a copy
of each such proposed amendment or supplement and not to use any such proposed
amendment or supplement to which you reasonably object.

 

(c) If, during such period after the date hereof and prior to the date on which
all of the Securities shall have been sold by the Initial Purchasers, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Final Memorandum in order to make the statements therein, in the
light of the circumstances when the Final Memorandum is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the Initial
Purchasers, it is necessary to amend or supplement the Final Memorandum to
comply with applicable law,

 

12

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forthwith to prepare and furnish, at its own expense, to the Initial Purchasers,
either amendments or supplements to the Final Memorandum so that the statements
in the Final Memorandum as so amended or supplemented will not, in the light of
the circumstances when the Final Memorandum is delivered to a purchaser, be
misleading or so that the Final Memorandum, as amended or supplemented, will
comply with applicable law.

 

(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.

 

(e) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated (except pursuant to Sections 9(i),
(iii), (iv), or (v)), to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the
reasonable fees, disbursements and expenses of the Company’s counsel and the
Company’s accountants in connection with the issuance and sale of the Securities
and all other fees or expenses in connection with the preparation of each
Memorandum and all amendments and supplements thereto, including all printing
costs associated therewith, and the delivering of copies thereof to the Initial
Purchasers, in the quantities herein above specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the Initial
Purchasers, including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the qualification of the Securities for offer and
sale under state securities laws as provided in Section 6(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the Initial
Purchasers in connection with such qualification and in connection with the Blue
Sky or legal investment memorandum, (iv) any fees charged by rating agencies for
the rating of the Securities, (v) the fees and expenses, if any, incurred in
connection with the admission of the Securities for trading in PORTAL or any
appropriate market system, (vi) the costs and charges of the Trustee and any
transfer agent, registrar or depositary, (vii) the cost of the preparation,
issuance and delivery of the Securities, (viii) the document production charges
and expenses associated with printing this Agreement and (ix) all other cost and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 8, and the last
paragraph of Section 10, the Initial Purchasers will pay all of their costs and
expenses, including fees and disbursements of their counsel, transfer taxes
payable on resale of any of the Securities by them and any advertising expenses
connected with any offers they may make.

 

13

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(f) Neither the Company nor any Affiliate will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) which could be integrated with the sale of the Securities in
a manner which would require the registration under the Securities Act of the
Securities.

 

(g) Not to solicit any offer to buy or offer or sell the Securities or the
Underlying Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.

 

(h) While any of the Securities or the Underlying Securities remain “restricted
securities” within the meaning of the Securities Act, to make available, upon
request, to any seller of such Securities the information specified in Rule
144A(d)(4) under the Securities Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.

 

(i) If requested by you, to use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market.

 

(j) During the period of two years after the Closing Date the Company will not,
and will not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to resell any of the Securities or the Underlying Securities
which constitute “restricted securities” under Rule 144 that have been
reacquired by any of them.

 

(k) Not to take any action prohibited by Regulation M under the Exchange Act in
connection with the distribution of the Securities contemplated hereby.

 

7. Offering of Securities; Restrictions on Transfer. Each Initial Purchaser,
severally and not jointly, represents and warrants that such Initial Purchaser
is a qualified institutional buyer as defined in Rule 144A under the Securities
Act (a “QIB”). Each Initial Purchaser, severally and not jointly, agrees with
the Company that (i) it will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for such Securities only from, and will
offer such Securities only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States, QIBs that, in each case, in
purchasing such Securities are deemed to have represented and agreed as provided
in the Final Memorandum under the caption “Transfer Restrictions”.

 

14

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8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Initial Purchaser, each person, if any, who controls any Initial
Purchaser within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Initial Purchaser
within the meaning of Rule 405 under the Securities Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Memorandum or
any amendments or supplements thereto, or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to any Preliminary Memorandum shall not inure to the benefit of any Initial
Purchaser from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling such Initial
Purchaser, if a copy of the Final Memorandum (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Initial Purchaser to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Securities to such person, and if the Final
Memorandum (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 6(a) hereof.

 

(b) Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and each person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through you expressly for use in
either Memorandum or any amendments or supplements thereto.

 

(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall

 

15

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pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees and expenses of more
than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated, in the case of parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 60
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.

 

(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Initial Purchasers on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 8(d)(i) above

 

16

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is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i) above but
also the relative fault of the Company on the one hand and of the Initial
Purchasers on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Initial Purchasers on the other hand in connection with
the offering of the Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Securities (before
deducting expenses) received by the Company and the total discounts and
commissions received by the Initial Purchasers, in each case as set forth in the
Final Memorandum, bear to the aggregate offering price of the Securities. The
relative fault of the Company on the one hand and of the Initial Purchasers 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
Company or by the Initial Purchasers and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

 

(e) The Company and the Initial Purchasers agree that it would not be just or
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Initial Purchasers 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 Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) 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 or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities resold by it in the initial
placement of such Securities were offered to investors exceeds the amount of any
damages that such Initial Purchaser 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.

 

(f) The indemnity and contribution provisions contained in this Section 8 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser, any person controlling any Initial

 

17

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Purchaser or any affiliate of any Initial Purchaser or by or on behalf of the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Securities.

 

9. Termination. The Initial Purchasers may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, the New York
Stock Exchange or the Nasdaq National Market, (ii) trading of any securities of
the Company shall have been suspended on any exchange or in any over–the–counter
market, (iii) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (iv) any moratorium
on commercial banking activities shall have been declared by Federal or New York
State authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and which, singly or together with any
other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Securities on the terms and in the manner contemplated in the Final Memorandum.

 

10. Effectiveness; Defaulting Purchasers. This Agreement shall become effective
upon the execution and delivery hereof by the parties hereto.

 

If, on the Closing Date any one or more of the Initial Purchasers shall fail or
refuse to purchase Securities that it or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, the other Initial Purchasers shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Securities that any
Initial Purchaser has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after

 

18

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such default, this Agreement shall terminate without liability on the part of
any non–defaulting Initial Purchaser or of the Company. In any such case either
you or the Company 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 Final Memorandum or in any other documents or arrangements may be effected.

 

If this Agreement shall be terminated by the Initial Purchasers, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Initial Purchasers in connection
with this agreement or the offering contemplated hereunder.

 

11. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

12. Notices. All communications hereunder will be in writing and shall be deemed
to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notice to the Initial Purchasers shall be directed c/o Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention:
Equity Capital Markets. Notices to the Company shall be directed to BlackRock,
Inc., 40 East 52nd Street, New York, New York 10022, Attention: Robert Connolly.

 

13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

 

14. Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.

 

19

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Very truly yours,

BLACKROCK, INC.

By:   /s/    ROBERT P. CONNOLLY            

Name:

  Robert P. Connolly    

Title:

  Managing Director, General         Counsel and Secretary

 

--------------------------------------------------------------------------------

Accepted as of the date hereof

MORGAN STANLEY & CO. INCORPORATED

Acting severally on behalf of themselves and the several Initial Purchasers
named in Schedule I hereto.

By:   Morgan Stanley & Co. Incorporated By:   /s/    JOHN D. TYREE            

Name:

  John D. Tyree    

Title:

  Executive Director

 

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Schedule I

 

Initial Purchasers

--------------------------------------------------------------------------------

   $250,000,000 of
Securities to be
Purchased

--------------------------------------------------------------------------------

Morgan Stanley & Co. Incorporated

   $ 151,000,000

Citigroup Global Markets Inc.

     33,000,000

Merrill Lynch, Pierce, Fenner & Smith Incorporated

     33,000,000

UBS Securities LLC

     33,000,000     

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Total:

   $ 250,000,000

 

--------------------------------------------------------------------------------

 

Schedule II

 

Subsidiaries

 

BlackRock Advisors, Inc.

BlackRock Financial Management, Inc.

BlackRock Institutional Management Corporation

BlackRock Funding, Inc.

BlackRock Funding International, Ltd.

BlackRock Investments, Inc.

Advanced Investment Management, Inc.

BlackRock Overseas Investment Corp.

Risk Monitors, Inc.

Investment Technology, LLC

BlackRock (Japan), Inc.

BlackRock Capital Management, Inc.

BlackRock Asia Limited

BlackRock International, Ltd.

BlackRock Japan Holdings, Inc.

Nomura BlackRock Asset Management Co., Ltd.

BlackRock Japan Co., Ltd.

BlackRock Advisors Singapore Pte. Ltd

BlackRock Portfolio Holdings, Inc.

BlackRock HPB Management LLC

BlackRock Portfolio Investments, LLC

BlackRock Absolute Return Partners (Offshore), Ltd.

BlackRock Funds Inflation Bond Portfolio

BlackRock Bond Allocation Target Shares Series C Portfolio

BlackRock Bond Allocation Target Shares Series S Portfolio

BlackRock Bond Allocation Target Shares Series M Portfolio

SSRM Holdings, Inc.

 

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Schedule III

 

Lockups

 

William O. Albertini

Laurence D. Fink

Frank T. Nickell

Thomas H. O’Brien

David H. Komansky

James E. Rohr

Ralph L. Schlosstein

Lawrence M. Wagner

William S. Demchak

Murry S. Gerber

James Grosfeld

William C. Mutterperl

Robert S. Kapito

Paul L. Audet

Robert S. Connolly

Linda Robinson

Sue Wagner (spouse of Lawrence M. Wagner)

The PNC Financial Services Group, Inc.

 

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EXHIBIT A

 

[OPINION OF SKADDEN, ARPS, SLATE, MEXGHER & FLOM LLP]

 

A-1

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EXHIBIT B

 

[OPINION OF IN-HOUSE COUNSEL]

 

B-1

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EXHIBIT C

 

[OPINION OF DAVIS POLK & WARDWELL]

 

C-1