EXHIBIT G
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated October 30th, 1998, between BGT 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
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
(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
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
The Parties to this Agreement agree that the Adviser will receive
compensation for the services it renders under this Agreement from The
BlackRock Strategic Term Trust Inc.
5. Indemnity
(a) The Fund hereby agrees to indemnify the Adviser and each
of the Adviser's directors, officers, employees, agents, associates and
controlling persons and the members, partners, directors, 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
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
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
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.
BGT SUBSIDIARY INC.
[SEAL] By: /s/ Xxxxx Xxxxxxxxxxx
____________________________
Name: Xxxxx Xxxxxxxxxxx
Title: President
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
_____________________________
Name: Xxxxx Xxxxxxxxxxx
Title: President
