Exhibit 99(2)(g)(1)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated as of [ ], 2002, between BlackRock
Strategic Bond Trust (the "Trust"), a Delaware business trust, and BlackRock
Advisors, Inc. (the "Advisor"), a Delaware corporation.
WHEREAS, the Advisor 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 "1940 Act");
WHEREAS, this Agreement has been approved in accordance with
the provisions of the 1940 Act, and the Advisor 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 fol lows:
1. IN GENERAL. The Advisor agrees, all as more fully set forth
herein, to act as investment advisor 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 ADVISOR WITH RESPECT TO
INVESTMENT OF ASSETS OF THE TRUST. Subject to the succeeding provisions of this
section and sub ject to the direction and control of the Trust's Board of
Trustees, the Advisor shall (i) act as investment advisor for and supervise and
manage the investment and reinvest ment 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, exercis ing consents and exercising
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; and (iv) provide
investment re search to the Trust.
3. DUTIES AND OBLIGATIONS OF ADVISOR WITH RESPECT TO THE
ADMINISTRA TION OF THE TRUST. The Advisor 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 Dividend Disbursing Agent and other service providers) for the Trust.
To the extent requested by the Trust, the Advisor 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 of the Trust's Custodian
and Transfer Agent and Dividend Disbursing Agent of certain books and records
of the Trust as required under Rule 31a-1(b)(4) of the 1940 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 state ments 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 Com mission ("SEC") on Form N-SAR and such other reports, forms
and filings, as
may be mutually agreed upon;
(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;
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(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 1940 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 ar range 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;
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(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;
(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 1940 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 Advisor.
All services are to be furnished through the medium of any
directors, officers or employees of the Advisor or its affiliates as the Advisor
deems appropri ate in order to fulfill its obligations hereunder.
The Trust will reimburse the Advisor or its affiliates for all
out-of- pocket expenses incurred by them in connection with the performance of
the admin istrative services described in this paragraph 3.
4. COVENANTS. In the performance of its duties under this
Agreement, the Advisor shall at all times conform to, and act in accordance
with, any require ments imposed by:
(a) (i) the provisions of the 1940 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 provi sion of law; (iii) the provisions of the Agreement and
Declaration of Trust, as amended and restated, 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;
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(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 Advisor will attempt
to obtain the best price and the most favorable execution of its orders. In
placing orders, the Advisor 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 Advisor may
select brokers on the basis of the research, statistical and pricing ser vices
they provide to the Trust and other clients of the Advisor. 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 Advisor 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 Advisor
determines in good faith that such commission is reasonable in terms either of
the transaction or the overall responsibility of the Advisor to the Trust and
its 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 Advisor is authorized to take into ac count the sale of shares of
the Trust in allocating purchase and sale orders for portfo lio securities to
brokers or dealers (including brokers and dealers that are affiliated with the
Advisor), provided that the Advisor believes that the quality of the transac
tion 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 Advisor, or any affiliated person thereof, except
to the extent permitted by the SEC or by applicable law;
(c) will maintain a policy and practice of
conducting its in vestment advisory services hereunder independently of the
commercial banking oper ations of its affiliates. When the Advisor 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
(d) 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, ex cept 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 Advisor may be exposed to civil
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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 Advisor or any officer, employee or other affiliate thereof from
acting as invest ment advisor 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 Advisor 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 Advisor will undertake no activities which, in its judg ment, will adversely
affect the performance of its obligations under this Agreement.
6. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Advisor hereby agrees that all records which
it main tains 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
Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. AGENCY CROSS TRANSACTIONS. From time to time, the Advisor
or brokers or dealers affiliated with it may find themselves in a position to
buy for cer tain of their brokerage clients (each an "Account") securities which
the Advisor'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 Advisor 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 Advisor is making the investment decision (as
opposed to a brokerage client who makes his own investment decisions), and the
Advisor or an affiliate is receiving commissions from both sides of the
transaction, there is a potential conflicting division of loyalties and responsi
bilities on the Advisor's part regarding the advisory client. The Securities and
Ex change Commission has adopted a rule under the Investment Advisers Act of
1940, as amended, which permits the Advisor 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 Advisor 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 Advisor.
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8. EXPENSES. During the term of this Agreement, the Advisor
will bear all costs and expenses of its employees and any overhead incurred in
connection with its duties hereunder 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 0000 Xxx) of the Advisor; provided that the Board of
Trustees of the Trust may approve reimbursement to the Advisor 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 Advisor who devote
substantial time to Trust operations or the operations of other investment
companies advised by the Advisor.
9. COMPENSATION OF THE ADVISOR. (a) The Trust agrees to pay to
the Advisor and the Advisor agrees to accept as full compensation for all
services ren dered by the Advisor as such, a monthly fee (the "Investment
Advisory Fee") in ar rears at an annual rate equal to 0.75 % of the average
weekly value of the Trust's Managed Assets. "Managed Assets" means the total
assets of the Trust minus the sum of the 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 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 net 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 calcula tions to third parties.
10. INDEMNITY. (a) The Trust hereby agrees to indemnify the
Advi sor, and each of the Advisor'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 Advisor's request as direc tor, 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
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or may have been involved as a party or otherwise or with which such Indemnitee
may be or may have been threat ened, 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; pro vided,
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 compro mise 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
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 major ity 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 indemnifica tion has been met and a written undertaking to
reimburse the Trust unless it is subse quently 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
0000 Xxx) 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
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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 hereun der 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 ma jority 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 determina tions that advance
payments in connection with the expense of defending any pro ceeding shall be
authorized shall be made in accordance with the immediately pre ceding 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 Advisor will not be
liable for any error of judgment or mistake of law or for any loss suffered by
Advisor 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 ser vices 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 un der 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, and amended
and restated, 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.
12. DURATION AND TERMINATION. This Agreement shall become
effec tive 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 suc cessive 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
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(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 Agree ment, 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 Advisor 60 days' notice
(which notice may be waived by the Advisor), 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 Advisor on 60 days' written notice (which notice may
be waived by the Trust). This Agree ment 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 1940 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, dis charge or termination is sought. Any amendment of this
Agreement shall be subject to the 1940 Act.
15. GOVERNING LAW. This Agreement shall be governed by and con
strued in accordance with the laws of the State of New York for contracts to be
per formed entirely therein without reference to choice of law principles
thereof and in accordance with the applicable provisions of the 1940 Act.
16. USE OF THE NAME BLACKROCK. The Advisor has consented to
the use by the Trust of the name or identifying word "BlackRock" in the name of
the Trust. Such consent is conditioned upon the employment of the Advisor as the
in vestment advisor to the Trust. The name or identifying word "BlackRock" may
be used from time to time in other connections and for other purposes by the
Advisor and any of its affiliates. The Advisor may require the Trust to cease
using "BlackRock" in the name of the Trust if the Trust ceases to employ, for
any reason, the Advisor, any successor thereto or any affiliate thereof as
investment advisor of the Trust.
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17. 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 Agree ment 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.
18. 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.
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IN WITNESS WHEREOF, the parties hereto have caused the forego
ing instrument to be executed by their duly authorized officers, all as of the
day and the year first above written.
BLACKROCK STRATEGIC BOND TRUST
By:
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Name: Xxxx Xxxxxxxx
Title: Secretary
BLACKROCK ADVISORS, INC.
By:
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Name: Xxxx Xxxxxxxx
Title: Secretary
