INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated _______, 1999, between BCT
Subsidiary Inc. (the "Fund"), a Maryland corporation, and
BlackRock Financial Management, Inc. (the "Adviser"), a
Delaware corporation.
In consideration of the mutual promises and agreements 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
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The Adviser agrees, all as more fully set forth herein, to
act as investment adviser to the Fund with respect to the investment of the
Fund's assets and to supervise and arrange the purchase of securities for
and the sale of securities held in the investment portfolio of the Fund.
2. Duties and obligations of the Adviser with
respect to investments of assets of the Fund
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(a) Subject to the succeeding provisions
of this section and subject to the direction and control of the Fund's
Board of Directors, the Adviser shall (i) act as investment adviser for and
supervise and manage the investment and reinvestment of the Fund's assets
and in connection therewith have complete discretion in purchasing and
selling securities and other assets for the Fund and in voting, exercising
consents and exercising all other rights appertaining to such securities
and other assets on behalf of the Fund; (ii) supervise continuously the
investment program of the Fund and the composition of its investment
portfolio; and (iii) 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 Fund.
(b) 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 (i) the provisions of the Investment
Company Act of 1940 (the "Act"), and of any rules or regulations in force
thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Articles of Incorporation and By-Laws of the Fund, as
such documents are amended from time to time; (iv) the investment objective
and policies of the Fund as set forth in its Registration Statement on Form
N-2; and (v) any policies and determinations of the Board of Directors of
the Fund.
(c) The Adviser will bear all costs and
expenses of its partners and employees and any overhead incurred in
connection with its duties hereunder and shall bear the costs of any
salaries or directors fees of any officers or directors of the Fund who are
affiliated persons (as defined in the Act) of the Adviser except that the
Board of Directors of the Fund 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 Fund
operations (other than the provision of investment advice) of all personnel
employed by the Adviser who devote substantial time to Fund operations or
the operations of other investment companies advised by the Adviser.
(d) The Adviser shall give the Fund the
benefit of its best judgment and effort in rendering services hereunder,
but the Adviser shall not be liable for any act or omission or for any loss
sustained by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under this Agreement.
(e) Nothing in this Agreement shall
prevent the Adviser or any partner, 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 partners, 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.
3. Portfolio Transactions and Brokerage
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The Adviser is authorized, for the purchase and sale of the
Fund's portfolio securities, to employ such securities dealers as may, in
the judgment of the Adviser, implement the policy of the Fund to obtain the
best net results taking into account such factors as price, including
dealer spread, the size, type and difficulty of the transaction involved,
the firm's general execution and operational facilities and the firm's risk
in positioning the securities involved. Consistent with this policy, the
Adviser is authorized to direct the execution of the Fund's portfolio
transactions to dealers and brokers furnishing statistical information or
research deemed by the Adviser to be useful or valuable to the performance
of its investment advisory functions for the Fund.
4. Compensation of The Adviser
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The Parties to this Agreement agree that the Adviser will
receive compensation for the services it renders under this Agreement from
The BlackRock Broad Investment Grade 2009 Term Trust Inc.
5. Indemnity
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(a) The Fund hereby agrees to indemnify the Adviser
and each of the Adviser's partners, officers, employees, agents, associates
and controlling persons and the partners, officers, employees and agents
thereof (including any individual who serves at the Adviser's request as
director, officer, partner, trustee or the like of another corporation)
(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 corporate 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 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
or thereafter by reason of his having acted in any such capacity, except
with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in
the best interest of the Fund and furthermore, in the case of any criminal
proceeding, so long as he 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 Fund 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 his 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 Fund and that such indemnitee appears to have acted in good faith in
the reasonable belief that his action as in the best interest of the Fund
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 the Fund.
(b) The Fund shall make advance payments in
connection with the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Fund 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 Fund unless it is subsequently determined that
he is entitled to such indemnification and if the directors of the Fund
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 his undertaking,
(B) the Fund shall be insured against losses arising by reason of any
lawful advances, or (C) a majority of a quorum consisting of directors of
the Fund who are neither "interested persons" of the Fund (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") 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 Directors of the Fund, or (ii) if such a quorum is
not obtainable or event, 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 he may be lawfully entitled.
6. Duration and Termination
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This Agreement shall become effective on the date it is
approved by the stockholder of the Fund and shall continue in effect for a
period of two years and thereafter from year to year, but only so long as
such continuation is specifically approved at least annually in accordance
with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time
without penalty upon giving the Fund sixty days written notice (which
notice may be waived by the Fund) and may be terminated by the Fund at any
time without penalty upon giving the Adviser sixty days notice (which
notice may be waived by the Adviser), provided that such termination by the
Fund shall be directed or approved by the vote of a majority of the
Directors of the Fund in office at the time or by the vote of the holders
of a "majority" (as defined in the Act) of the voting securities of the
Fund at the time outstanding and entitled to vote. This Agreement shall
terminate automatically in the event of its assignment (as "assignment" is
defined in the Act).
7. Notices
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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.
8. Governing Law
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This Agreement shall be 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.
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.
BCT SUBSIDIARY INC.
[SEAL] By: _________________________________
Name:
Title:
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: _________________________________
Name:
Title:
