BlackRock Basic Value Fund, Inc. (the Registrant)
77Q1(e):
Copies of any new or amended Registrant investment advisory contracts
Attached please find as an exhibit to sub-item 77Q1(e) of Form N-SAR, a copy
of the Investment Management Agreement between BlackRock Advisors, LLC and
the Registrant.
Exhibit 77Q1(e)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated February __, 2015 between BlackRock Basic Value
Fund, Inc. (the Fund ), a Maryland corporation, and BlackRock Advisors, LLC
(the Advisor ), a Delaware limited liability company.
WHEREAS, the Advisor has agreed to furnish investment advisory
services to the Fund, an open-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 follows:
In General. The Advisor agrees, all as more fully set forth herein,
to act as investment advisor to the Fund with respect to the investment of
the Funds assets and to supervise and arrange for the day to day operations
of the Fund and the purchase of securities for and the sale of securities
held in the investment portfolios of the Fund.
Duties and Obligations of the Advisor with Respect to Investment of
Assets of the Fund. Subject to the succeeding provisions of this section
and subject to the direction and control of the Funds Board of Directors,
the Advisor shall (i) act as investment advisor for and supervise and manage
the investment and reinvestment of the Funds 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; (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 Fund;
and (iv) provide investment research to the Fund.
Duties and Obligations of Advisor with Respect to the Administration
of the Fund. 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 Funds Custodian, Transfer Agent and
Dividend Disbursing Agent and other service providers) for the Fund. To the
extent requested by the Fund, the Advisor agrees to provide the following
administrative services:
Oversee the determination and publication of the Funds net asset
value in accordance with the Funds policy as adopted from time to time by
the Board of Directors;
Oversee the maintenance by the Funds Custodian and Transfer
Agent and Dividend Disbursing Agent of certain books and records of the Fund
as required under Rule 31a-1(b)(4) of the 1940 Act and maintain (or oversee
maintenance by such other persons as are approved by the Board of Directors)
such other books and records required by law or for the proper operation of
the Fund;
Oversee the preparation and filing of the Fund s federal, state
and local income tax returns and any other required tax returns;
Review the appropriateness of and arrange for payment of the
Fund s expenses;
Prepare for review and approval by officers of the Fund
financial information for the Fund s semiannual and annual reports, proxy
statements and other communications with shareholders required or otherwise
to be sent to Fund shareholders, and arrange for the printing and
dissemination of such reports and communications to shareholders;
Prepare for review by an officer of the Fund the Fund s periodic
financial reports required to be filed with the Securities and Exchange
Commission ( SEC ) on Form
N-SAR, Form N-CSR, Form N-PX, Form N-Q, and such other reports, forms and
filings, as may be mutually agreed upon;
Prepare such reports relating to the business and affairs of the
Fund as may be mutually agreed upon and not otherwise appropriately prepared
by the Fund s custodian, counsel or auditors;
Make such reports and recommendations to the Board of Directors
concerning the performance of the independent accountants as the Board of
Directors may reasonably request or deems appropriate;
Make such reports and recommendations to the Board of Directors
concerning the performance and fees of the Fund s Custodian and Transfer
Agent and Dividend Disbursing Agent as the Board of Directors may reasonably
request or deems appropriate;
Oversee and review calculations of fees paid to the Fund s
service providers;
Oversee the Fund s portfolio and perform necessary calculations
as required under Section 18 of the 1940 Act;
Consult with the Fund s officers, independent accountants, legal
counsel, custodian, accounting agent and transfer and dividend disbursing
agent in establishing the accounting policies of the Fund and monitor
financial and shareholder accounting services;
Determine the amounts available for distribution as dividends
and distributions to be paid by the Fund to its shareholders; prepare and
arrange for the printing of dividend notices to shareholders; and provide
the Fund 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 Fund s dividend reinvestment plan;
Prepare such information and reports as may be required by any
banks from which a Fund borrows funds;
Provide such assistance to the Custodian and the Fund s counsel
and auditors as generally may be required to properly carry on the business
and operations of the Fund;
Respond to or refer to the Fund s officers or transfer agent,
shareholder (including any potential shareholder) inquiries relating to the
Fund; and
Supervise any other aspects of the Fund s administration as may
be agreed to by the Fund and the Advisor.
All services are to be furnished through the medium of any
trustees, officers or employees of the Advisor or its affiliates as the
Advisor deems appropriate in order to fulfill its obligations hereunder.
The Fund will reimburse the Advisor or its affiliates for all
out of pocket expenses incurred by them in connection with the performance
of the administrative services described in this paragraph 3. The Fund will
reimburse the Advisor and its affiliates for their costs in providing
accounting services to the Fund.
Covenants. In the performance of its duties under this Agreement,
the Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by: (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; (ii) any other
applicable provision of law; (iii) the provisions of the Charter and By-Laws
of the Fund, as such documents are amended from time to time; (iv) the
investment objectives and policies of the Fund as set forth in the Fund s
Registration Statement on Form N-1A and/or the resolutions of the Board of
Directors; and (v) any policies and determinations of the Board of Directors
of the Fund.
In addition, the Advisor 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
services they provide to the Fund 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 Fund and its other clients and that the
total commissions paid by the Fund will be reasonable in relation to the
benefits to the Fund over the long term. Subject to the foregoing and the
provisions of the 1940 Act, the Securities Exchange Act of 1934, as amended,
and other applicable provisions of law, the Advisor may select brokers and
dealers with which it or the Fund is affiliated;
maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial
banking operations of its affiliates. When the Advisor makes investment
recommendations for the Fund, its investment advisory personnel will not
inquire or take into consideration whether the issuer of securities proposed
for purchase or sale for the Fund s account are customers of the commercial
department of its affiliates; and
treat confidentially and as proprietary information of the
Fund all records and other information relative to the Fund, and the Fund s
prior, current or potential shareholders, and will not use such records and
information for any purpose other than performance of its
writing by the Fund, which approval shall not be unreasonably withheld and
may not be withheld where the Advisor may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the
Fund.
Services Not Exclusive. Nothing in this Agreement shall prevent the
Advisor or any officer, employee or other affiliate thereof from acting as
investment 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
judgment, will adversely affect the performance of its obligations under
this Agreement.
Sub-Advisors. The Advisor may from time to time, in its sole
discretion to the extent permitted by applicable law, appoint one or more
sub-advisors, including, without limitation, affiliates of the Advisor, to
perform investment advisory services with respect to the Fund. The Advisor
may terminate any or all sub-advisors in its sole discretion at any time to
the extent permitted by applicable law.
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
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such records upon the Fund 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.
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 directors fees of any officers or Directors of the Fund who are
affiliated persons (as defined in the 0000 Xxx) of the Advisor; provided
that the Board of Directors of the Fund 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
Fund operations (including, without limitation, compliance matters) (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 Fund operations or the operations of other
investment companies advised by the Advisor.
Compensation of the Advisor. The Fund agrees to pay to the Advisor
and the Advisor agrees to accept as full compensation for all services
rendered by the Advisor as such, a monthly fee (the Investment Advisory Fee
) in arrears at an annual rate equal to the amount set forth in Schedule A
hereto of the average daily value of the Fund s Net Assets. Net Assets
means the total assets of a Fund minus the sum of the accrued liabilities.
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.
For purposes of this Agreement, the net assets of the Fund shall
be calculated pursuant to the procedures adopted by resolutions of the Board
of Directors of the Fund for calculating the value of the Fund s assets or
delegating such calculations to third parties.
Indemnity. The Fund may, in the discretion of the Board of
Directors of the Fund, indemnify the Advisor, and each of the Advisor s
trustees, officers, employees, agents, associates and controlling persons
and the trustees, partners, members, officers, employees and agents thereof
(including any individual who serves at the Advisor s request as director,
officer, partner, member, trustee or the like of another entity) (each such
person being an Indemnitee ) against any liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees (all as provided in accordance with
applicable state law) reasonably incurred by such Indemnitee in connection
with the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or
investigative body in which such Indemnitee may be or may have been involved
as a party or otherwise or with which such Indemnitee may be or may have
been threatened, while acting in any capacity set forth herein or thereafter
by reason of such Indemnitee having acted in any such capacity, except with
respect to any matter as to which such Indemnitee shall have been
adjudicated not to have acted in good faith in the reasonable belief that
such Indemnitee s action was in the best interest of the Fund and
furthermore, in the case of any criminal proceeding, so long as such
Indemnitee had no reasonable cause to believe that the conduct was unlawful;
provided, however, that (1) no Indemnitee shall be indemnified hereunder
against any liability to the 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 such Indemnitee s position (the conduct referred to in such
clauses (i) through (iv) being sometimes referred to herein as disabling
conduct ), (2) as to any matter disposed of by settlement or a compromise
payment by such Indemnitee, pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such settlement or
compromise is in the best interests of the Fund 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 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 Directors of the Fund.
The Fund may 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 such Indemnitee is entitled to
such indemnification and if the Board of 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 security for such Indemnitee undertaking, (B) the
Fund shall be insured against losses arising by reason of any unlawful
advance, or (C) a majority of a quorum consisting of Board of Directors of
the Fund who are neither interested persons of the Fund (as defined in
Section 2(a)(19) of the 0000 Xxx) 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
All determinations with respect to the standards for
indemnification hereunder shall be made (1) by a final decision on the
merits by a court or other body before whom the proceeding was brought that
such Indemnitee is not liable or is not liable by reason of disabling
conduct, or (2) in the absence of such a decision, by (i) a majority vote of
a quorum of the Disinterested Non Party Directors of the Fund, or (ii) if
such a quorum is not obtainable or, even if obtainable, if a majority vote
of such quorum so directs, independent legal counsel in a written opinion.
All determinations that advance payments in connection with the expense of
defending any proceeding shall be authorized and shall be made in accordance
with the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these provisions
shall not exclude any other right to which such Indemnitee may be lawfully
entitled.
Limitation on Liability. The Advisor will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Advisor or by
the Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its duties under this Agreement. As used
in this Section 11, the term Advisor shall include any affiliates of the
Advisor performing services for the Fund contemplated hereby and partners,
trustees, officers and employees of the Advisor and of such affiliates.
Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Fund as
provided herein, shall continue in effect until June 30, 2015. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to
the Fund for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority
of the Fund s Board of Directors or the vote of a majority of the
outstanding voting securities of the Fund at the time outstanding and
entitled to vote, and (b) by the vote of a majority of the Board of
Directors who are not parties to this Agreement or interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval. Notwithstanding the foregoing, this Agreement
may be terminated by the Fund 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 Fund shall be
directed or approved by the vote of a majority of the Board of Directors of
the Fund in office at the time or by the vote of the holders of a majority
of the voting securities of the Fund at the time outstanding and entitled to
vote, or by the Advisor on 60 days written notice (which notice may be
waived by the Fund). This Agreement will also immediately terminate in the
event of its assignment. (As used in this Agreement, the terms majority of
the outstanding voting securities, interested person and assignment
shall have the same meanings of such terms in the 1940 Act.)
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.
Amendment of this Agreement. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the
Board of Directors of the Fund, including a majority of those Board of
Directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on
such approval and, where required by the 1940 Act, by a vote of a majority
of the outstanding voting securities of the Fund.
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York for contracts to be
performed entirely therein without reference to choice of law principles
thereof and in accordance with the applicable provisions of the 1940 Act.
To the extent that the applicable laws of the State of New York, or any of
the provisions, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding on, and shall
inure to the benefit of the parties hereto and their respective successors.
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.
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.
BLACKROCK BASIC VALUE FUND, INC.
By:
Name: Xxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
BLACKROCK ADVISORS, LLC
By:
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Schedule A
Investment Advisory Fee
0.60% of that portion of the average daily Net Assets of the Fund not
exceeding $100 million; 0.50% of that portion of the average daily Net
Assets of the Fund in excess of $100 million but not exceeding $200 million;
and 0.40% of that portion of the average daily Net Assets of the Fund in
excess of $200 million
