BLACKROCK INC /NY, S-1/A, 1999-09-24

BLACKROCK INC /NY
S-1/A, 1999-09-24
FACILITIES SUPPORT MANAGEMENT SERVICES

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<PAGE>

As filed with the Securities and Exchange Commission on September 24, 1999

Registration No. 333-78367
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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AMENDMENT NO. 4
TO FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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BlackRock, Inc.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
Delaware 6211 51-0380803
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

345 Park Avenue
New York, NY 10154
(212) 754-5560
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

Robert P. Connolly
Managing Director and General Counsel
BlackRock, Inc.
345 Park Avenue
New York, NY 10154
(212) 754-5560
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copies to:
<TABLE>
<S> <C> <C>
Matthew J. Mallow Gary S. Schpero Steven Kaplan
Skadden, Arps, Slate, Simpson Thacher & Bartlett Arnold & Porter
Meagher & Flom LLP 425 Lexington Avenue 555 Twelfth Street, N.W.
919 Third Avenue New York, New York 10017 Washington, D.C. 20004
New York, New York 10022 (212) 455-2000 (202) 942-5000
(212) 735-3000
</TABLE>

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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the Securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to 462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]

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<PAGE>

EXPLANATORY NOTE

This registration statement contains two forms of prospectus: one to be
used in connection with an offering in the United States and Canada (the "U.S.
Prospectus") and one to be used in a concurrent international offering (the
"International Prospectus"). The International Prospectus will be identical to
the U.S. Prospectus in all respects except for the front cover page, pages 80,
81, 82, 83 and the back cover page. The form of the U.S. Prospectus is included
herein and is followed by the front cover page, pages 80, 81, 82, 83, 84 and
the back cover page to be used in the International Prospectus.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion

Preliminary Prospectus dated September 24, 1999

PROSPECTUS

9,000,000 Shares of Class A Common Stock

[LOGO OF BLACKROCK/SM/]

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The U.S. underwriters are offering shares in the United States and
Canada and the international managers are offering shares outside the
United States and Canada.

We expect the public offering price to be between $14.00 and $17.00 per
share. Currently, no public market exists for the shares. The class A common
stock has been approved for listing on the New York Stock Exchange under the
symbol "BLK."

Following the offerings, we will have two classes of authorized common
stock--class A common stock, offered through this prospectus, and class B
common stock, % of which will be owned by a subsidiary of PNC Bank Corp. The
rights of holders of class A common stock and class B common stock are
identical, except with respect to voting. Each share of class A common stock
will have one vote and each share of class B common stock will have five votes
on all matters submitted to a vote of our stockholders. As a result, following
the offerings, PNC will own % of the combined voting power of all classes of
BlackRock stock and will control all matters affecting BlackRock stockholders.

Investing in the class A common stock involves risks which are described in
the "Risk Factors" section beginning on page 9 of this prospectus.

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<TABLE>
<CAPTION>
Per Share Total
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<S> <C> <C>
Public offering price................................. $ $

Underwriting discount................................. $ $

Proceeds, before expenses, to BlackRock............... $ $
</TABLE>

The U.S. underwriters may also purchase up to an additional shares of
class A common stock at the public offering price, less the underwriting
discount, within 30 days from the date of this prospectus to cover over-
allotments. The international managers may similarly purchase up to an
aggregate of an additional shares of class A common stock.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

The shares of class A common stock will be ready for delivery in New York,
New York on or about , 1999.

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Merrill Lynch & Co.
Goldman, Sachs & Co.
Lehman Brothers
Prudential Securities
Salomon Smith Barney

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The date of this prospectus is , 1999.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
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<S> <C>
Prospectus Summary......................................................... 1
Risk Factors............................................................... 9
Note Regarding Forward-Looking Statements.................................. 16
Use of Proceeds............................................................ 16
Dividend Policy............................................................ 16
Dilution................................................................... 17
Capitalization............................................................. 18
Selected Financial Data.................................................... 19
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................... 23
Business................................................................... 33
Management................................................................. 49
Executive Compensation..................................................... 53
Ownership of the Common Stock.............................................. 60
Certain Relationships and Related Transactions............................. 61
Description of Capital Stock............................................... 68
Shares Eligible for Future Sale............................................ 78
Underwriting............................................................... 80
Material United States Federal Income and Estate Tax Considerations
for Non-U.S. Holders of Class A Common Stock.............................. 84
Legal Matters.............................................................. 86
Experts.................................................................... 86
Where You Can Find More Information........................................ 86
Index to Consolidated Financial Statements................................. F-1
</TABLE>
<PAGE>

PROSPECTUS SUMMARY

You should read the entire prospectus carefully, especially the risks of
investing in our common stock discussed under "Risk Factors."

BlackRock

Overview. BlackRock, Inc. is one of the 30 largest investment management
firms in the United States with $142 billion of assets under management at June
30, 1999. In 1998, PNC Bank Corp. (NYSE: PNC), one of the largest diversified
financial services companies in the United States, created BlackRock to
consolidate most of its asset management business into one entity. This process
began in 1995 when PNC acquired BlackRock Financial Management L.P., then a $25
billion fixed income manager. By year-end 1996, the BFM management team had
assumed responsibility for overseeing PNC's mutual fund marketing and liquidity
management efforts. The equity divisions were added in 1998, when a substantial
portion of PNC's asset management businesses were consolidated under the
BlackRock brand name. At that time, the BFM management team integrated
activities across investment product lines and established committees to
oversee each product line on a day-to-day basis.

Our Products and Services. We offer a variety of investment products to
institutional and individual investors in the U.S. and internationally. At June
30, 1999, fixed income products represented 56%, money market or liquidity
products represented 31%, equity products represented 11% and alternative
investment products represented 2% of total assets under management. We manage
these assets in approximately 400 separate accounts and 70 mutual funds on
behalf of more than 3,000 institutions and 150,000 individual investors. We
also offer a variety of risk management services to large institutional fixed
income investors. Through these risk management services, we use software,
which we have developed over many years, to provide comprehensive risk analysis
and advice with respect to more than $500 billion of assets managed by our
clients.

Our Asset Growth. Over the past five and a half years, our assets under
management have increased by more than $89 billion, a 25% compound annual
growth rate. Separate accounts, which are offered primarily to institutional
investors, grew by $65 billion, a 41% compound annual growth rate, and mutual
funds, which are offered primarily under the BlackRock Funds and Provident
Institutional Funds brand names, grew by $24 billion, a 12% compound annual
growth rate. Most of this growth has been in fixed income and liquidity
products in which assets under management have increased by $56 billion and $21
billion, respectively. Importantly, we achieved this growth largely by
attracting new clients and additional funds from existing clients, despite the
fact that investors have been shifting money out of bonds and into stocks to
take advantage of the sustained bull market in equities during the past decade.

Our Investment Performance and Client Service. We believe that our
success in increasing fixed income and liquidity assets under management is
principally due to our investment returns which have consistently met or
exceeded our clients' targets while assuming equal or lower levels of risk than
performance benchmarks, and to our comprehensive client service. We achieve our
investment results by using an investment process that combines the expertise
of our investment professionals and the scope of our risk management software.
Our senior professionals work closely with clients, consultants and
distributors to better understand their needs and to market our products and
provide client service. Products and services are tailored to meet differing
return objectives and risk tolerances, as well as regulatory, tax, accounting
and credit constraints. Our computer capabilities also play an important role
in client service by permitting efficient report customization and delivery
over the Internet.

1
<PAGE>

Our Strategies. We began 1999, our first full year as an integrated
business, better prepared to pursue opportunities across our products and
markets. We plan to continue to increase assets under management by pursuing
our current business strategy, which consists of the following key elements:

. Retaining and attracting talented professionals. The quality and
depth of our professional staff is critical to our business, and
the market for management, investment, technology and marketing
personnel is intensely competitive. As a result, we strongly
emphasize recruiting, training and long-term career development.
The experience and stability of our management team is one of our
greatest strengths. To promote stability, 39 managing directors
acquired 18% of BlackRock's equity and signed 5-year employment
contracts during 1998. After the offerings, these managing
directors will own % of the equity in BlackRock, and % of the
combined voting power of all classes of BlackRock stock. We also
granted long-term deferred compensation to key professionals. We
expect to expand employee ownership over time, both to retain and
motivate key personnel and to attract additional high caliber
professionals committed to building our long-term value.

. Continuing to build our fixed income and liquidity presence. Although we
have realized considerable growth in fixed income and liquidity assets,
the market for these products is highly fragmented and no single firm
accounts for substantial market share. Accordingly, there is a
substantial opportunity for continued growth in these businesses. We
plan to capitalize on these opportunities through continued direct
calling on pension plan sponsors, insurance companies, corporations,
industry consultants and financial intermediaries.

. Expanding our equity business. After assuming responsibility for
PNC's equity products in 1998, we took steps to enhance our
capabilities and build capacity for future growth, including
upgrading computers, adding trading and operations resources and
expanding risk management reporting. We will continue to pursue
distribution opportunities for mutual funds, which currently
comprise the majority of our equity assets under management. In
addition, we will pursue both cross-selling and direct calling
efforts among institutional investors, particularly as we establish
longer term investment performance track records.

. Diversifying our products and clients. We will continue to
diversify our products in order to better serve our existing
clients and attract new ones. These efforts may include selective
development of new products that build upon or expand our existing
capabilities, including additional alternative investment products.
We will also seek additional distribution outlets for our mutual
funds, pursue relatively untapped segments of the institutional
investor universe and seek to enhance the distribution of our
products in international markets.

. Marketing our risk management services. We have developed
sophisticated risk management software that supports our risk
assessment and investment decision-making and automates our trade
processing and compliance functions. We recently began offering
risk management services separately from our asset management
services and intend to gradually expand our marketing efforts in
this area.

. Improving our operating efficiency and pursuing strategic
opportunities. By integrating our business across investment
product lines, we expect to have opportunities to realize continued
improvement in our operating margins. We will also seek to use our
technology strengths to achieve greater automation and improve
management reporting to support future growth. Finally, we believe
that as one of relatively few publicly-traded investment

2
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management firms, we will be better able to participate in future
industry consolidation. We will pursue acquisition and joint
venture opportunities that we believe can enhance stockholder value
by making our operations more efficient, expanding our product
capabilities and strengthening our distribution capabilities.

Headquarters. Our principal executive offices are located at 345 Park
Avenue, New York, New York 10154, and our telephone number is (212) 754-5560.

3
<PAGE>

The Offerings

The following information assumes that the underwriters and managers do
not exercise the options granted by BlackRock to purchase additional shares in
the offerings.

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<S> <C>
Class A common stock offered:
U.S. offering......................................... shares
International offering................................ shares
Total............................................... 9,000,000 shares

Common stock outstanding after the offerings:
Class A common stock.................................. 9,000,000 shares(/1/)
Class B common stock.................................. 54,982,635 shares(/2/)
Total............................................... 63,982,635 shares

</TABLE>

Use of proceeds............. We estimate that the net proceeds to be
received by BlackRock from these
offerings will be approximately $
million. We intend to use these net
proceeds to repay outstanding
indebtedness under our $175 million
revolving line of credit with PNC Bank.
At June 30, 1999, the outstanding
balance on this line of credit,
including accrued interest, was $125
million. The remaining net proceeds
will be used for working capital and
other general corporate purposes.

Dividend policy............. BlackRock intends to retain earnings to
finance the development and growth of
its business, including possible
investments, and does not anticipate
paying cash dividends in the
foreseeable future.

Voting rights............... The rights of holders of class A common
stock and class B common stock are
identical, except that holders of class
B common stock will have five votes per
share, while holders of class A common
stock will have one vote per share.

Risk factors................ See "Risk Factors" and the other
information included in this prospectus
for a discussion of factors you should
carefully consider before deciding to
invest in shares of the class A common
stock.

NYSE symbol................. "BLK"
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(1) Does not include options to purchase 1,061,000 shares of class A common
stock, all of which are unvested, at the initial offering price pursuant to
the adoption of the BlackRock Inc. 1999 Stock Award and Incentive Plan and
the conversion of $19,826,500 of deferred compensation awards into
shares of restricted class A common stock, all of which are unvested, at
the initial offering price. See "Executive Compensation."

(2) Reflects June 30, 1999 diluted shares outstanding, adjusted for an
estimated reclassification to be completed upon consummation of the
offerings of each share of common stock into 275 shares of our class B
common stock.

4
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SUMMARY FINANCIAL DATA

The consolidated financial statements of BlackRock reflect the "carved
out" historical operating results of the asset management businesses of PNC
which were consolidated under BlackRock in 1998 as if the combined operations
had been a separate entity prior to the formation of BlackRock. The summary
financial data presented below has been derived in part from, and should be
read in conjunction with, the consolidated financial statements of BlackRock
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The consolidated financial
data includes the results of operations of BFM since its acquisition by PNC on
February 28, 1995. Had BFM's results of operations been included for the year
ended December 31, 1994 and the two months ended February 28, 1995, revenues
would have increased by $55.1 million and $12.1 million, respectively. BFM's
income before income taxes for these periods would not be comparable to post
acquisition results due to the financing costs and goodwill amortization
expense arising out of the acquisition and which have only been incurred in
periods since the acquisition.

The balance sheet data at June 30, 1998 and 1999, and the income statement
data for the six month periods then ended, have been derived from BlackRock's
unaudited financial statements which, in the opinion of BlackRock, reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the financial position and results of operations of
BlackRock for those periods. The income statement data for interim periods is
not necessarily indicative of results for subsequent periods or a full year.
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended June 30,
---------------------------------------------- ----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- ------- -------
(unaudited) (unaudited)
($ in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income statement data
Revenue
Investment advisory and administration
fees:
Mutual funds......................... $26,995 $ 61,877 $ 87,189 $117,977 $162,487 $67,403 $99,637
Separate accounts.................... 7,638 24,458 43,069 62,985 101,352 42,376 71,569
BlackRock Asset Investors (BAI) (1).. -- 5,933 6,061 13,867 61,199 15,761 (2,054)
------- -------- -------- -------- -------- ------- -------
Total advisory and administration
fees.................................. 34,633 92,268 136,319 194,829 325,038 125,540 169,152
Other income........................... 1,411 5,814 10,159 10,644 14,444 5,713 10,941
------- -------- -------- -------- -------- ------- -------
Total revenue.......................... 36,044 98,082 146,478 205,473 339,482 131,253 180,093
Operating expenses
Employee compensation and benefits... 7,073 33,698 53,703 73,217 109,741 50,845 65,964
BAI incentive compensation (1)....... -- 3,070 3,525 9,688 44,806 10,332 (1,494)
Fund administration and servicing
costs--affiliates................... 10,475 12,412 19,611 27,278 52,972 15,656 36,334
General and administration........... 10,510 17,719 24,500 29,764 38,696 16,634 23,836
Amortization of goodwill............. -- 8,002 9,603 9,653 9,653 4,826 4,826
Mutual fund offering costs........... -- -- -- -- 4,252 -- --
------- -------- -------- -------- -------- ------- -------
Total operating expenses............... 28,058 74,901 110,942 149,600 260,120 98,293 129,466
------- -------- -------- -------- -------- ------- -------

Operating income....................... 7,986 23,181 35,536 55,873 79,362 32,960 50,627
Non-operating income (expense)
Interest and dividend income......... 331 943 1,877 3,117 1,995 1,066 1,293
Interest expense..................... -- (14,253) (19,975) (20,249) (13,347) (7,582) (7,121)
------- -------- -------- -------- -------- ------- -------
331 (13,310) (18,098) (17,132) (11,352) (6,516) (5,828)
------- -------- -------- -------- -------- ------- -------
Income before income taxes............. 8,317 9,871 17,438 38,741 68,010 26,444 44,799
Income taxes......................... 2,753 4,785 8,475 16,655 32,395 12,596 18,813
------- -------- -------- -------- -------- ------- -------
Net income............................. $ 5,564 $ 5,086 $ 8,963 $ 22,086 $ 35,615 $13,848 $25,986
======= ======== ======== ======== ======== ======= =======
</TABLE>

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<TABLE>
<CAPTION>
Six months
Year ended ended
Dec. 31, June 30,
1998 1999
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<S> <C> <C>
Unaudited pro forma data
Historical income before income taxes.................... $ 68,010 $ 44,799
Pro forma interest adjustment for debt repayment......... 9,658 5,000
Pro forma income taxes................................... 37,514 21,231
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Pro forma net income..................................... $ 40,154 $ 28,568
========== ==========
Unaudited pro forma net income per share (2)
Basic.................................................. .75 .52
Diluted................................................ .75 .52
Unaudited pro forma weighted average shares outstanding
Basic.................................................. 53,507,051 54,807,482
Diluted................................................ 53,682,203 54,982,635
</TABLE>

6
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<TABLE>
<CAPTION>
At December 31, At June 30,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- -------- --------
(unaudited) (unaudited)
($ in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance sheet data
Goodwill.................................................... $ -- $232,100 $223,216 $213,563 $203,910 $208,737 $199,084
Total assets................................................ 15,039 293,270 332,719 335,507 440,784 314,947 403,252
Long-term debt.............................................. -- 149,754 234,255 206,432 178,200 146,761 125,000
Total liabilities........................................... 3,904 270,481 300,047 290,544 334,593 232,516 271,174
Stockholders' equity........................................ 11,135 22,789 32,672 44,963 106,191 82,431 132,078

<CAPTION>
At December 31, At June 30,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- -------- --------
(unaudited)
($ in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Other financial data (3)
Assets under management
Separate accounts:
Fixed income*............................................. $13,848 $ 23,345 $ 28,958 $ 39,261 $ 52,869 $ 46,664 $ 68,286
Liquidity................................................. 3,269 5,556 7,430 10,019 13,826 12,738 12,362
Equity.................................................... 540 700 1,204 1,763 2,417 2,095 2,353
------- -------- -------- -------- -------- -------- --------
Subtotal.................................................. 17,657 29,601 37,592 51,043 69,112 61,497 83,001
Mutual funds:
Fixed income.............................................. 10,021 11,969 12,546 13,714 13,888 14,172 13,617
Liquidity................................................. 20,398 21,183 23,933 29,827 35,555 28,958 31,921
Equity.................................................... 4,615 6,306 8,643 10,829 12,087 12,055 13,262
------- -------- -------- -------- -------- -------- --------
Subtotal.................................................. 35,034 39,458 45,122 54,370 61,530 55,185 58,800
------- -------- -------- -------- -------- -------- --------
Total....................................................... $52,691 $ 69,059 $ 82,714 $105,413 $130,642 $116,682 $141,801
======= ======== ======== ======== ======== ======== ========
<CAPTION>
For Six Months
For the Year Ended December 31, Ended June 30,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- -------- --------
(unaudited)
($ in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA
Net income.................................................. $ 5,564 $ 5,086 $ 8,963 $ 22,086 $ 35,615 $ 13,848 $ 25,986
Depreciation expense........................................ 292 1,531 2,097 2,498 3,199 1,391 4,629
Amortization of goodwill.................................... -- 8,002 9,603 9,653 9,653 4,826 4,826
------- -------- -------- -------- -------- -------- --------
EBITDA as adjusted (4)...................................... $ 5,856 $ 14,619 $ 20,663 $ 34,237 $ 48,467 $ 20,065 $ 35,441
======= ======== ======== ======== ======== ======== ========
Interest expense............................................ -- 14,253 19,975 20,249 13,347 7,582 7,121
Income taxes................................................ 2,753 4,785 8,475 16,655 32,395 12,596 18,813
------- -------- -------- -------- -------- -------- --------
EBITDA (5).................................................. $ 8,609 $ 33,657 $ 49,113 $ 71,141 $ 94,209 $ 40,243 $ 61,375
- --------------------------------------------------
======= ======== ======== ======== ======== ======== ========
</TABLE>
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* including alternative investment products.

(1) Pursuant to a plan of liquidation to be completed by the fourth quarter of
1999, the assets of BAI are being sold and its business operations
terminated. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--General."

(footnotes continued on next page)

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(footnotes continued from previous page)

(2) The unaudited pro forma data and the pro forma net income per share give
effect to the reclassification of each share of our common stock into
approximately 275 shares of our class B common stock, including the
repayment of debt and decrease in interest expense and the increase in
income tax expense, as if the reclassification and the offerings had been
effected as of January 1, 1998. The unaudited pro forma data and pro forma
net income per share do not give effect to the conversion of $19,826,500 of
deferred compensation and to restricted class A common stock. The unaudited
pro forma data and the pro forma net income per share do not purport to
represent the results of operations or the financial position of BlackRock
which actually would have occurred had the offerings been consummated on
January 1, 1998, or project the results of operations or the financial
position of BlackRock for any future date or period.

(3) For comparative purposes, "assets under management" at December 31, 1994
includes BFM.

(4) "EBITDA, as adjusted" represents earnings after interest expense and income
taxes but before depreciation and amortization and extraordinary items. We
believe that this measure may be useful to investors as another indicator
of funds available to us which may be used to repay debt obligations or
make new investments. EBITDA, as adjusted, as calculated by us may not be
consistent with the computation of EBITDA, as adjusted, by other companies.
EBITDA, as adjusted, is not a measure of financial performance under
generally accepted accounting principles and you should not consider it as
an alternative to net income as a measure of operating performance or to
cash flows from operating activities as a measure of liquidity.

(5) "EBITDA" represents earnings before interest expense, income taxes,
depreciation, amortization and extraordinary items. We believe EBITDA may
be useful to investors as an indicator of our ability to service debt and
to meet working capital requirements. EBITDA, as calculated by us, may not
be consistent with computations of EBITDA by other companies. EBITDA is not
a measure of financial performance under generally accepted accounting
principles and you should not consider it an alternative to net income as a
measure of operating performance or to cash flows from operating activities
as a measure of liquidity. EBITDA has increased every year since 1994,
primarily due to new business growth which resulted in annual increases to
operating income.

8
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RISK FACTORS

As a BlackRock stockholder, you will be subject to risks affecting our
business, risks relating to our relationship with PNC and risks relating to the
ownership of our stock. You should carefully consider the following factors as
well as other information contained in this prospectus before deciding to
invest in shares of the class A common stock.

Risk factors affecting our business

Decline in the securities markets could lead to a decline in our revenues
Our investment management revenues are comprised of fees based on a
percentage of the value of assets under management and performance fees
expressed as a percentage of the returns realized on assets under management. A
decline in the prices of stocks or bonds could cause our revenues to decline
by:

. causing the value of our assets under management to decrease,
which would result in lower investment management fees;

. causing the returns realized on our assets under management to
decrease, which would result in lower performance fees; and

. causing our clients to withdraw funds in favor of investments in
markets that they perceive to offer greater opportunity and that
we do not serve, which would result in lower investment management
fees.

Poor investment performance could lead to loss of our clients and a decline in
our revenues

We believe that investment performance is one of the most important
factors for the growth of our assets under management. Poor investment
performance could impair our revenues and growth because:

. existing clients might withdraw funds in favor of better
performing products, which would result in lower investment
management fees;

. our ability to attract funds from existing and new clients might
diminish; and

. we might earn little or no performance fees.

Our sources of revenues are subject to termination on short notice

Our revenues will decrease if our investment management contracts are
terminated or if clients withdraw funds that we manage on their behalf. Any of
the following could cause our revenues to decline:

. clients can, without penalty, terminate our investment management
contracts and can withdraw their funds generally with little or no
advance notice;

. the boards of registered investment companies that we advise could
choose to terminate or not renew our investment management
contracts, which they must consider annually; and

. fund shareholders can withdraw assets with no advance notice.

We may not be able to replace revenues from the funds we manage that have fixed
terms

We manage a variety of mutual funds that were designed with maturity
dates ranging from October 1999 to December 2010. At maturity, all remaining
assets will be distributed to investors in these

9
<PAGE>

funds and our investment advisory agreements will terminate. There is no
assurance that clients will reinvest these assets in our other products or, if
they do, that such reinvestments will be in products that provide us with equal
revenues. Funds maturing in the next three years include:

. BAI, which has adopted a plan of liquidation that we expect will
be completed by the fourth quarter of 1999, represented $159
million of our assets under management at June 30, 1999, and
contributed $16.4 million of operating income in 1998 and an
operating loss of $0.6 million for the six months ended June 30,
1999; and

. three closed-end taxable bond funds maturing on or prior to
December 31, 2001, which collectively represented $2.5 billion of
our assets under management at June 30, 1999 and contributed
$10.6 million of revenues during 1998 and $5.3 million during the
first six months of 1999.

Loss of significant separate accounts would decrease our revenues

We had approximately 400 separate accounts at June 30, 1999, of which the
10 largest (excluding alternative investment products) generated approximately
5.7% of our total revenues during 1998 and 7.1% during the six months ended
June 30, 1999. Loss of any of these accounts would reduce our revenues. We
have, from time to time, lost separate accounts because of corporate mergers
and restructuring, and in the future we could lose accounts under these or
other circumstances, such as adverse market conditions or poor performance.

Competitive fee pressures could reduce our revenues and our profit margins

The investment management business is highly competitive and has
relatively low barriers to entry. To the extent that we are forced to compete
on the basis of price, we may not be able to maintain our current fee
structure. Fee reductions on existing or future new business could cause our
revenues and profit margins to decline.

Performance fees may increase earnings volatility, which could decrease our
stock price

A portion of our revenues are derived from performance fees on some
investment and risk management advisory assignments. In most cases, performance
fees are based on investment returns, although in some cases they are based on
achieving specific service standards. Generally, we are entitled to performance
fees only if the returns on the related portfolios exceed agreed-upon periodic
or cumulative return targets. If we do not exceed these targets, we will not
generate performance fees for that period and we may not earn performance fees
in future periods if the targets are based on cumulative returns. Performance
fees will vary from period to period in relation to volatility in investment
returns, causing our earnings to be more volatile than if we did not manage
assets on a performance fee basis. The volatility in our earnings may decrease
our stock price. Performance fees, excluding BAI, represented 6.2% of our total
revenue in 1998 and 7.5% of total revenue for the six months ended June 30,
1999.

Many of our competitors have greater resources than we do and could use these
resources to increase their business at our expense

Many firms offer similar and additional investment management products
and services to the same clients that we target. In addition, many of our
competitors have or may in the future develop greater financial and other
resources, more extensive distribution capabilities, more effective advertising
and marketing strategies and broader name recognition. Our competitors may be
able to use these resources and capabilities to place us at a competitive
disadvantage in retaining assets under management and achieving increased
market penetration.

Our corporate or acquisition strategies may decrease our earnings and harm our
competitive position

We employ a variety of strategies intended to enhance our earnings and to
improve our profit margins. In the future, these strategies may include
acquisitions of other investment management businesses. We may

10
<PAGE>

not be able to find suitable businesses to acquire at acceptable prices and we
may not be able to successfully integrate or realize the intended benefits from
these acquisitions. In general, our strategies may not be effective and failure
to successfully develop and implement our strategies may decrease our earnings
and harm our competitive position in the investment management industry.

Failure to develop effective business continuity plans could disrupt operations
and cause financial losses which could decrease our stock price

We are dependent to a substantial degree on the availability of our
office facilities and the proper functioning of our computer and
telecommunications systems. A disaster, such as water damage, an explosion or a
prolonged loss of electrical power, could materially interrupt our business
operations and cause material financial loss, regulatory actions, reputational
harm or legal liability, which, in turn, could cause a decline in our stock
price.

We currently estimate that the total cost of developing and implementing
our business continuity plans will not have a material impact on our results of
operations, liquidity or capital resources. We cannot provide any assurance,
however, that our business continuity plans will be effective or that our
estimates regarding the timing and cost of completing the plans will be
accurate.

Failure to achieve Year 2000 readiness could disrupt operations and cause
financial losses which could decrease our stock price

We are substantially dependent on the proper functioning of our computer
systems. In addition, we interact with a variety of third parties in the normal
course of business. A failure of our systems or any of those third parties'
systems to be Year 2000 ready could disrupt our operations and cause material
financial losses, which, in turn, could cause a decline in our stock price. The
primary problem is that many existing computer systems and microprocessors with
date functions use only two digits to identify a year in the date field, with
the assumption that the first two digits of the year are always "19." Computers
that are not Year 2000 ready may treat the year 2000 as the year 1900 and may
fail to treat the year 2000 as a leap year. Systems that calculate, compare or
sort using the incorrect date may malfunction, which could have the following
effects on our business:

. in the case of our systems, incomplete or inaccurate recording or
accounting of trades or inaccurate calculation of security
valuations and risk parameters;

. in the case of third-party data providers, the receipt of
inaccurate or out-of-date information that would impair our
ability to perform critical data functions, including pricing
portfolio assets or evaluating our risk exposures;

. in the case of customers, trading counterparties and financial
intermediaries such as exchanges and clearing agents, disruption
of funding flows, failed trade settlements or an inability to
trade in certain markets;

. in the case of custodian banks, fund administrators and transfer
agents, disruption of critical administrative, valuation and
record-keeping services for our mutual fund, separate account and
risk management clients;

. in the case of vendors, disruption of telecommunications and
electrical power and other services upon which we depend; and

. in the case of the issuers of securities in which we invest,
adverse impact on their operations and financial condition which
could decrease the value and liquidity of their securities, which
could cause the value of the assets we manage and our investment
management fees to decline.

Disruption or suspension of activity in the world's financial markets is
also possible. In addition, many market participants may reduce their market
activities temporarily as they assess the effectiveness of their Year 2000
readiness efforts during a "phase-in" period beginning in late 1999. This
reduction could decrease liquidity in the securities markets and inhibit our
ability to manage our client portfolios.

11
<PAGE>

We currently estimate that the total cost of implementing our Year 2000
program will not have a material impact on our results of operations, liquidity
or capital resources. We cannot provide any assurance, however, that our Year
2000 program will be effective or that our estimates about the timing and cost
of completing our Year 2000 program will be accurate or that third parties on
which we are dependent will be Year 2000 ready.

Failure to comply with client guidelines could result in damage awards against
us and loss of assets under management, both of which could cause earnings or
stock price to decline

When clients retain us to manage assets on their behalf, they specify
guidelines that we are required to observe in the management of their
portfolios. A failure to comply with these guidelines could result in losses
that the client could seek to recover from us and the client withdrawing its
assets from our management, both of which could cause our earnings or stock
price to decline.

Failure to comply with government regulations could result in fines or
temporary or permanent prohibitions on our activities, which could cause our
earnings or stock price to decline

Our business is subject to extensive regulation in the United States and
certain of our activities are subject to the laws of non-U.S. jurisdictions and
non-U.S. regulatory agencies or bodies. Violation of applicable laws or
regulations could result in fines, temporary or permanent prohibition on our
engagement in certain activities, suspensions of our personnel or revocation of
their licenses, suspension or termination of our investment adviser or broker-
dealer registrations, or other sanctions, which could cause our earnings or
stock price to decline.

Subsidiaries of ours are registered with the Securities and Exchange
Commission under the Investment Advisers Act, and BlackRock's mutual funds are
registered with the SEC under the Investment Company Act. The Investment
Advisers Act imposes numerous obligations on registered investment advisers
including record-keeping, operating and marketing requirements, disclosure
obligations and prohibitions on fraudulent activities. The Investment Company
Act imposes similar obligations, as well as additional detailed operational
requirements, on investment advisers to registered investment companies. The
failure of one of our subsidiaries to comply with the Investment Advisers Act
or the Investment Company Act could lead the SEC to institute proceedings and
impose sanctions for violations of either of these acts ranging from censure to
termination of an investment adviser's registration to prohibition to serve as
advisers to SEC-registered funds, any of which could cause our earnings or
stock price to decline.

Failure to comply with ERISA regulations could result in penalties against us
and cause our earnings or stock price to decline

Our asset management subsidiaries are subject to the Employee Retirement
Income Security Act of 1974, and to regulations promulgated thereunder, insofar
as they act as a "fiduciary" under ERISA with respect to benefit plan clients.
ERISA and applicable provisions of the Internal Revenue Code impose duties on
persons who are fiduciaries under ERISA, prohibit specified transactions
involving ERISA plan clients and provide monetary penalties for violations of
these prohibitions. The failure of any of our subsidiaries to comply with these
requirements could result in significant penalties against us which could
reduce our earnings or cause our stock price to decline.

Risks relating to our relationship with PNC

We will be controlled by PNC as long as it controls a majority of the
outstanding voting power of our common stock, and our other stockholders will
be unable to affect the outcome of stockholder voting during such time

Immediately after completion of these offerings, four of our six
directors will be directors and/or executive officers of PNC and PNC indirectly
will own approximately % of our outstanding shares of class B common stock,
representing % of the combined voting power of all classes of voting stock of
BlackRock. As long as PNC owns a majority of the voting power of our common
stock, PNC will be able to

12
<PAGE>

elect our entire board of directors and to remove any director, with or without
cause, and generally to determine the outcome of all corporate actions
requiring stockholder approval. Additionally, our bylaws provide that, subject
to applicable law and exchange policy, prior to the date on which PNC or
another person beneficially owns less than a majority of the voting power of
BlackRock common stock, a majority of all directors on the committees of our
board of directors will be designated by PNC or such other person. As a result,
subject to the power of executive management to manage the day-to-day
operations of BlackRock, PNC will be in a position to continue to control all
matters affecting BlackRock, including:

. the composition of our board of directors and, through it, any
determination with respect to the direction and policies of
BlackRock, including the appointment and removal of officers;

. any determination with respect to mergers or other business
combinations involving BlackRock;

. the acquisition or disposition of assets by BlackRock;

. future issuances of common stock or other securities of BlackRock;

. the incurrence of debt by BlackRock;

. amendments, waivers and modifications to our agreements, including
those with PNC;

. the payment of dividends on our common stock; and

. determinations with respect to the treatment of items in our tax
returns which are consolidated or combined with PNC's tax returns.

Concentration of PNC managed assets in BlackRock Funds could result in loss of
revenue if the PNC managed assets are withdrawn by PNC

Approximately 80% ($19.9 billion at June 30, 1999) of the assets in the
BlackRock Funds are assets of PNC clients and are invested in the BlackRock
Funds on a discretionary basis by PNC. PNC may withdraw these assets at any
time and we may not be able to replace them. In addition, we may not be
successful in increasing sales through PNC channels and PNC may determine not
to continue marketing the BlackRock Funds or our other products.

Banking regulation of PNC and BlackRock limits our activities and the types of
businesses in which we may engage

Because PNC is a bank holding company and BlackRock is a subsidiary of
PNC and PNC Bank, one of its national bank subsidiaries, we are subject to bank
regulations which limit our activities and the types of businesses in which we
may engage. These limitations might impair our ability to compete for assets
under management and grow our assets. As a subsidiary of a national bank,
BlackRock may not conduct new activities, establish a subsidiary, or acquire
the stock or assets of another company unless it first obtains written
regulatory approval, which is available only for activities that are legally
permissible for a national bank or a subsidiary of a national bank and
consistent with prudent banking principles and regulatory policy or, for non-
U.S. activities or investments, that are usual in connection with the
transaction of the business of banking or other financial operations outside of
the United States. Banking regulations may cause us to be at a competitive
disadvantage because most of our competitors are not subject to these
limitations. BlackRock is subject to the supervision, regulation, and
examination of the Office of the Comptroller of the Currency. As a PNC Bank
subsidiary, BlackRock is subject to the broad enforcement authority of the OCC,
including the OCC's power to prohibit BlackRock from engaging in any activity
that, in the OCC's opinion, constitutes an unsafe or unsound practice in
conducting its business. The OCC may also impose substantial fines and other
penalties for violations of banking regulations applicable to BlackRock. Some
of our subsidiaries that engage in activities outside the United States are
subject to regulation and supervision by the Board of Governors of the Federal
Reserve System. In addition, your shares will not be insured by the Federal
Deposit Insurance Corporation or guaranteed by any bank.

13
<PAGE>

We could lose existing management and investment contracts if there is a change
in control of PNC or BlackRock

Upon a change in control of PNC or BlackRock, PNC, BlackRock or any
successor may be required to offer to purchase all our capital stock held by
BlackRock's employee stockholders and by public stockholders. Upon a change in
control of PNC or BlackRock, our existing management may leave and new
management could be appointed. In addition, in the event of such a change in
control of PNC or BlackRock, the boards of registered investment companies and
our other clients might have to reapprove our investment management contracts.
The termination of any contracts would reduce our revenues.

Holders may not participate in PNC's disposal of its common stock which could
decrease our stock price

After the offerings, PNC will beneficially own approximately % of
BlackRock's outstanding class B common stock, representing % of the combined
voting power of all classes of voting stock of BlackRock. At any time following
the expiration of the 180 day lock-up period in connection with the offerings,
PNC could decide to sell or otherwise dispose of all or a portion of its class
B common stock, subject to rights of first refusal and tag along rights
provided to our employee stockholders in a stockholders agreement. If PNC were
to dispose of all its class B common stock, members of our management team and
other employee stockholders could choose to sell all of their shares of common
stock in such a transaction.

Because it owns a controlling voting interest of BlackRock, PNC may
realize a premium over the prevailing market price in selling its class B
common stock. Holders of class A common stock may not be allowed to participate
in a transfer by PNC of its controlling interest and may not realize any
premium with respect to their shares of class A common stock. PNC will have the
right to require BlackRock to register the common stock held by PNC for sale in
public offerings. BlackRock's other existing stockholders also have
registration rights and may therefore participate in a public or private sale
of shares by PNC.

Four of our directors are also directors or executive officers of PNC. Our
directors and officers may own PNC stock and, as a result, will have conflicts
of interest on issues involving both BlackRock and PNC

Four members of our board of directors are executive officers of PNC.
Three of these PNC officers are also directors of PNC. Those directors who are
also directors or executive officers of PNC will have obligations to both
companies and will have conflicts of interest with respect to matters
potentially or actually involving or affecting us, such as acquisitions,
financings and other corporate opportunities that may be suitable both for us
and for PNC.

Many of our directors and our executive officers own significant amounts
of PNC stock and employee stock options on PNC stock because of their
relationships with PNC. Such ownership could create, or appear to create,
potential conflicts of interest when directors and officers are faced with
decisions that could have different implications for BlackRock and PNC.
BlackRock's certificate of incorporation contains provisions addressing the
respective rights and duties of BlackRock, PNC and their respective officers
and directors. These provisions do not alter the fiduciary duty of loyalty of
our directors under applicable Delaware law.

Conflicts of interest with PNC due to our ongoing business relationship may
arise

Conflicts of interest may arise between BlackRock and PNC in a number of
areas relating to our past, ongoing and future relationships, including:

. the nature, quality and pricing of services rendered to us by PNC
and to PNC by us;

. competitive business activities;

. sales or distributions by PNC of all or a portion of its ownership
interest in BlackRock;

14
<PAGE>

. PNC's ability to control the management and affairs of BlackRock;
or

. other intercompany relationships.

We may not be able to resolve any conflict of interest with PNC or, if a
conflict of interest is resolved, we may not receive as favorable a resolution
as we might have received if we were dealing with an unaffiliated third party.

Risk factors relating to our class A common stock

Disparate voting rights may decrease our stock price

The holders of class A common stock and class B common stock have
identical rights, except that:

. holders of class A common stock will have one vote per share on
all matters to be voted on by stockholders in general;

. holders of class B common stock will have five votes per share on
all matters to be voted on by stockholders in general; and

. holders of class A common stock are not eligible to vote on
matters relating exclusively to class B common stock, and vice
versa.

The difference in voting rights and our ability to issue additional
class B common stock could depress the value of the class A common stock.

Shares available for future sale or distribution, when sold or distributed,
may decrease our stock price

Immediately after the offerings, we will have outstanding
shares of class A common stock and shares of class B common stock.
Subject to the restrictions described under "Description of Capital Stock--
Common Stock--Stockholders Agreement," "Shares Eligible for Future Sale" and
the lock-up agreements described under "Underwriting," PNC and our existing
stockholders could from time to time and for any reason sell any or all of the
shares of class B common stock owned by them.

We cannot predict the effect, if any, that future sales or distributions
of class B common stock by PNC and our existing stockholders will have on the
market price of the class A common stock. Sales or distributions of
substantial amounts of class A common stock or class B common stock, or the
perception that such sales or distributions could occur, may cause the market
price for the class A common stock to decline.

Anti-takeover provisions may render changes of control more difficult and may
decrease our stock price

For so long as PNC owns a majority of the voting power of our
outstanding common stock, any merger or business combination involving
BlackRock would require the prior approval of PNC. In the event that PNC were
to control less than a majority of the voting power of our outstanding common
stock, provisions in our corporate documents may have the effect of rendering
more difficult or discouraging an acquisition of BlackRock or changes in
control of BlackRock deemed undesirable by the board of directors. These
obstacles to the acquisition of BlackRock by a third party could adversely
affect the price of our common stock and include the fact that our certificate
of incorporation and bylaws divide the board into three classes of directors,
each of which serves staggered three-year terms. Because this makes it more
difficult for stockholders to change the composition of the board, the
classification of the board may discourage a third party from trying to gain
control of BlackRock. This obstacle, and others discussed under "Description
of Capital Stock," could depress the value of our common stock.

15
<PAGE>

NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make statements about our future results in this prospectus that may
constitute "forward-looking statements." These statements are based on our
current expectations and the current economic environment. We caution you that
these statements are not guarantees of future performance. They involve a
number of risks and uncertainties that are difficult to predict. Our actual
results could differ materially from those expressed or implied in the forward-
looking statements. Important factors, including those described under "Risk
Factors" and elsewhere in this prospectus, could cause our actual results to
differ materially from those in the forward-looking statements.

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

This prospectus contains information you should consider when making your
investment decision. You should rely only on the information contained in this
prospectus. We have not, and the underwriters have not, authorized any other
person to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. We are not,
and the underwriters are not, making an offer to sell these securities in any
jurisdiction where such offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate at the date on the
front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.

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

USE OF PROCEEDS

We estimate that the net proceeds to be received by BlackRock from these
offerings, not including the proceeds received from the over-allotment options,
will be approximately $ million. We intend to use these net proceeds to repay
outstanding indebtedness under our $175 million revolving line of credit with
PNC Bank. At June 30, 1999, the outstanding balance of this facility, including
accrued interest, was $125 million. The remaining net proceeds will be used for
working capital and other general corporate purposes. The revolving line of
credit bears interest at PNC Bank's prime rate, which was 7.75% at June 30,
1999. See "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

DIVIDEND POLICY

We intend to retain future earnings, if any, for the development of our
business and therefore do not anticipate that our board of directors will
declare or pay any dividends on the class A common stock and class B common
stock in the foreseeable future. The declaration and payment of dividends by
BlackRock are subject to the discretion of our board of directors. BlackRock is
a holding company and, as such, our ability to pay dividends is subject to the
ability of our subsidiaries to provide cash to us. The board of directors will
determine future dividend policy based on our results of operations, financial
conditions, capital requirements and other circumstances. In addition, because
we are a consolidated subsidiary of PNC Bank, federal banking restrictions on
payments of dividends by PNC Bank may apply to us. See "Business--Regulation."

16
<PAGE>

DILUTION

Our pro forma net tangible book value at June 30, 1999 was $72.494
million, or $1.13 per share of class A and class B common stock. Pro forma net
tangible book value per share represents the amount of our total tangible
assets less total liabilities, each on a pro forma basis to reflect the sale of
the 9,000,000 shares of class A common stock offered by BlackRock in these
offerings at an assumed public offering price of $15.50 per share. The pro
forma net tangible book value per share was calculated without deduction of the
estimated underwriting discount and estimated offering expenses, and without
any provision for the application of the estimated net proceeds. Our pro forma
net tangible book value at June 30, 1999 would have been $(67.006) million, or
$(1.22) per share without giving effect to the offerings. These offerings will
cause an immediate decrease in the pro forma net tangible book value of $14.37
per share to new investors in our class A common stock and an immediate
increase in pro forma net tangible book value of $2.35 per share of our common
stock held by our existing stockholders.

<TABLE>
<S> <C> <C>
Public offering price per share(1).......................... $15.50
Pro forma net tangible book value per share before these
offerings.................................................. $(1.22)
Increase per share attributable to new investors............ 2.35
------
Pro forma net tangible book value per share after these
offerings.................................................. 1.13
------
Dilution per share to new investors(2)(3)................... $14.37
======
</TABLE>
- --------
(1) Assumed public offering price before deduction of underwriting discount
and estimated expenses of these offerings to be paid by BlackRock.

(2) Dilution is determined by subtracting the pro forma net tangible book
value per share of our common stock after these offerings from the assumed
public offering price paid by purchasers in these offerings for a share of
our class A common stock.

(3) Assumes no exercise of outstanding employee stock options. As of the date
of this prospectus, there are options outstanding, all of which are
unvested, to purchase shares of class A common stock at the
initial offering price. See "Executive Compensation." If any of these
options are exercised, there will be further dilution to purchasers of
class A common stock in these offerings.

Assuming the underwriters' over-allotment options are exercised in full,
the pro forma net tangible book value at June 30, 1999 would have been $93.419
million, or $1.43 per share of class A and class B common stock. The immediate
increase in pro forma net tangible book value of shares owned by existing
stockholders would be $2.65 per share, and the immediate dilution to purchasers
of shares of class A common stock in these offerings would be $14.07 per share.

17
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of BlackRock at June
30, 1999 on an actual basis and on an as-adjusted basis. The as-adjusted basis
reflects the reclassification of our common stock, no par value, into
approximately 275 shares of class B common stock on September , 1999 and the
application of the estimated net proceeds from the offerings to repay
outstanding amounts under our revolving credit line with PNC Bank from the sale
by BlackRock of 9,000,000 shares of class A common stock offered hereby at an
initial public offering price of $15.50 per share after deducting the
underwriter's discount and estimated offering expenses, and assuming that the
over-allotment options are not exercised. The remaining net proceeds will be
used for working capital and other general corporate purposes. This table
should be read in conjunction with the consolidated financial statements and
related notes and other financial and operating data contained elsewhere in our
prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" beginning on page 23 of this prospectus.

<TABLE>
<CAPTION>
June 30, 1999
------------------
As
Actual Adjusted
-------- --------
($ in thousands)
<S> <C> <C>
Debt
7.5% unsecured note due February 2000.................... $ 28,200 $ 28,200
Revolving line of credit with PNC Bank................... 125,000 --
-------- --------
Total debt................................................. 153,200 28,200
Stockholders' equity
Common Stock, no par value per share; 400,000 shares
authorized; 199,300 shares outstanding, actual.......... -- --
Class A common stock, $0.01 par value per share;
shares authorized; 9,000,000 shares issued
and outstanding, as adjusted............................ -- 90
Class B common stock, $0.01 par value per share;
shares authorized; 54,982,635 shares
outstanding, as adjusted................................ -- 550
Additional paid-in capital............................... 53,105 179,965
Retained earnings........................................ 79,272 79,272
Unrealized gain (loss) on investments, net............... (99) (99)
Treasury stock, at cost, 207 shares, actual; and 56,900
shares, as adjusted, respectively....................... (200) (200)
-------- --------
Total stockholders' equity................................. 132,078 259,578
-------- --------
Total capitalization....................................... $285,278 $287,778
======== ========
</TABLE>

18
<PAGE>

SELECTED FINANCIAL DATA

The consolidated financial statements of BlackRock reflect the "carved
out" historical operating results of the asset management businesses of PNC
which were consolidated under BlackRock in 1998 as if the combined operations
had been a separate entity prior to the formation of BlackRock. The selected
financial data presented below has been derived in part from, and should be
read in conjunction with, the consolidated financial statements of BlackRock
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The consolidated financial
data includes the results of operations of BFM since its acquisition by PNC on
February 28, 1995. Had BFM's results of operations been included for the year
ended December 31, 1994 and the two months ended February 28, 1995, revenues
would have increased by $55.1 million and $12.1 million, respectively. BFM's
income before income taxes for these periods would not be comparable to post
acquisition results due to the financing costs and goodwill amortization
expense arising out of the acquisition and which have only been incurred in
periods since the acquisition.

<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended June 30,
---------------------------------------------- ----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- ------- -------
(unaudited) (unaudited)
($ in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income statement data
Revenue
Investment advisory and administration
fees:
Mutual funds......................... $26,995 $ 61,877 $ 87,189 $117,977 $162,487 $67,403 $99,637
Separate accounts.................... 7,638 24,458 43,069 62,985 101,352 42,376 71,569
BlackRock Asset Investors (BAI) (1).. -- 5,933 6,061 13,867 61,199 15,761 (2,054)
------- -------- -------- -------- -------- ------- -------
Total advisory and administration
fees.................................. 34,633 92,268 136,319 194,829 325,038 125,540 169,152
Other income........................... 1,411 5,814 10,159 10,644 14,444 5,713 10,941
------- -------- -------- -------- -------- ------- -------
Total revenue.......................... 36,044 98,082 146,478 205,473 339,482 131,253 180,093
Operating expenses
Employee compensation and benefits... 7,073 33,698 53,703 73,217 109,741 50,845 65,964
BAI incentive compensation (1)....... -- 3,070 3,525 9,688 44,806 10,332 (1,494)
Fund administration and servicing
costs--affiliates................... 10,475 12,412 19,611 27,278 52,972 15,656 36,334
General and administration........... 10,510 17,719 24,500 29,764 38,696 16,634 23,836
Amortization of goodwill............. -- 8,002 9,603 9,653 9,653 4,826 4,826
Mutual fund offering costs........... -- -- -- -- 4,252 -- --
------- -------- -------- -------- -------- ------- -------
Total operating expenses............... 28,058 74,901 110,942 149,600 260,120 98,293 129,466
------- -------- -------- -------- -------- ------- -------

19
<PAGE>

<TABLE>
<CAPTION>
Six months
Year ended ended
Dec. 31, June 30,
1998 1999
----------- -----------
<S> <C> <C>
Unaudited pro forma data
Historical income before income taxes................. $ 68,010 $ 44,799
Pro forma interest adjustment for debt repayment...... 9,658 5,000
Pro forma income taxes................................ 37,514 21,231
----------- -----------
Pro forma net income.................................. $ 40,154 $ 28,568
=========== ===========
Unaudited pro forma net income per share (2)
Basic............................................... .75 .52
Diluted............................................. .75 .52
Unaudited pro forma weighted average shares
outstanding
Basic............................................... 53,507,051 54,807,482
Diluted............................................. 53,682,203 54,982,635
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
At December 31, At June 30,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- -------- --------
(unaudited) (unaudited)
($ in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance sheet data
Goodwill................ $ -- $232,100 $223,216 $213,563 $203,910 $208,737 $199,084
Total assets............ 15,039 293,270 332,719 335,507 440,784 314,947 403,252
Long-term debt.......... -- 149,754 234,255 206,432 178,200 146,761 125,000
Total liabilities....... 3,904 270,481 300,047 290,544 334,593 232,516 271,174
Stockholders' equity.... 11,135 22,789 32,672 44,963 106,191 82,431 132,078

<CAPTION>
At December 31, At June 30,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- -------- --------
(unaudited)
($ in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Other financial data (3)
Assets under management
Separate accounts:
Fixed income*......... $13,848 $ 23,345 $ 28,958 $ 39,261 $ 52,869 $ 46,664 $ 68,286
Liquidity............. 3,269 5,556 7,430 10,019 13,826 12,738 12,362
Equity................ 540 700 1,204 1,763 2,417 2,095 2,353
------- -------- -------- -------- -------- -------- --------
Subtotal.............. 17,657 29,601 37,592 51,043 69,112 61,497 83,001
Mutual funds:
Fixed income.......... 10,021 11,969 12,546 13,714 13,888 14,172 13,617
Liquidity............. 20,398 21,183 23,933 29,827 35,555 28,958 31,921
Equity................ 4,615 6,306 8,643 10,829 12,087 12,055 13,262
------- -------- -------- -------- -------- -------- --------
Subtotal.............. 35,034 39,458 45,122 54,370 61,530 55,185 58,800
------- -------- -------- -------- -------- -------- --------
Total................... $52,691 $ 69,059 $ 82,714 $105,413 $130,642 $116,682 $141,801
======= ======== ======== ======== ======== ======== ========
<CAPTION>
For Six Months
For the Year Ended December 31, Ended June 30,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------- -------- -------- -------- -------- -------- --------
(unaudited)
($ in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA
Net income.............. $ 5,564 $ 5,086 $ 8,963 $ 22,086 $ 35,615 $ 13,848 $ 25,986
Depreciation expense.... 292 1,531 2,097 2,498 3,199 1,391 4,629
Amortization of
goodwill............... -- 8,002 9,603 9,653 9,653 4,826 4,826
------- -------- -------- -------- -------- -------- --------
EBITDA as adjusted (4).. $ 5,856 $ 14,619 $ 20,663 $ 34,237 $ 48,467 $ 20,065 $ 35,441
======= ======== ======== ======== ======== ======== ========
Interest expense........ -- 14,253 19,975 20,249 13,347 7,582 7,121
Income taxes............ 2,753 4,785 8,475 16,655 32,395 12,596 18,813
------- -------- -------- -------- -------- -------- --------
EBITDA (5).............. $ 8,609 $ 33,657 $ 49,113 $ 71,141 $ 94,209 $ 40,243 $ 61,375
======= ======== ======== ======== ======== ======== ========
</TABLE>
- --------
* including alternative investment products.

(footnotes continued on next page)

21
<PAGE>

(footnotes continued from previous page)

(3) For comparative purposes, "assets under management" at December 31, 1994
includes BFM.

22
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BlackRock was formed in 1998 as a result of PNC's decision to
substantially consolidate its asset management businesses under the BlackRock
brand name and management team. Prior to this consolidation, PNC provided the
fixed income, liquidity and equity advisory services now under BlackRock
through various legal entities utilizing separate brand names. Through PNC Bank
and other PNC affiliates, PNC continues to provide asset management services as
part of its personal trust activities and otherwise to individual and
institutional clients.

General

BlackRock derives a substantial portion of its revenues from investment
advisory and administration fees, which are recognized as the services are
performed. Such fees are primarily based on predetermined percentages of the
market value of assets under management and are affected by changes in assets
under management, including market appreciation or depreciation and net
subscriptions or redemptions. Net subscriptions or redemptions represent the
sum of new client assets, additional fundings from existing clients,
withdrawals of assets from and termination of client accounts and purchases and
redemptions of mutual fund shares.

The following table presents the component changes in BlackRock's assets
under management for the years ended December 31, 1996, 1997 and 1998, and for
the six months ended June 30, 1999. The $3.8 billion in net mutual fund
redemptions for the six months ended June 30, 1999 was almost entirely due to
$3.7 billion in net redemptions in our institutional money market fund family,
Provident Institutional Funds. These funds experience high levels of
subscriptions and redemptions on a daily basis which can result in volatile
period-to-period changes in assets under management.

<TABLE>
<CAPTION>
For the
Six Months
For the Year Ended ended June
December 31, 30,
--------------------------- ----------
1996 1997 1998 1999
------- -------- -------- ----------
($ in millions)
<S> <C> <C> <C> <C>
Separate Accounts
Beginning assets under management..... $29,601 $ 37,592 $ 51,043 $ 69,112
Net subscriptions..................... 6,616 11,301 15,166 15,505
Market appreciation (depreciation).... 1,375 2,150 2,903 (1,616)
------- -------- -------- --------
Ending assets under management........ 37,592 51,043 69,112 83,001

Mutual Funds
Beginning assets under management..... 39,458 45,122 54,370 61,530
Net subscriptions (redemptions)....... 4,551 7,221 5,674 (3,844)
Market appreciation................... 1,113 2,027 1,486 1,114
------- -------- -------- --------
Ending assets under management........ 45,122 54,370 61,530 58,800
------- -------- -------- --------
Total Assets Under Management ("AUM").. 82,714 105,413 130,642 141,801
======= ======== ======== ========
Net subscriptions..................... $11,167 $ 18,522 $ 20,840 $ 11,661
% of Change in AUM from net
subscriptions........................ 81.8% 81.6% 82.6% 104.5%
</TABLE>

Investment advisory agreements for certain separate accounts and
BlackRock's alternative products provide for performance fees in addition to
fees based on assets under management. Performance fees are earned when
investment performance exceeds a contractual threshold and, accordingly, may
increase the volatility of BlackRock's revenues and earnings. Other income
primarily reflects fees earned on risk management advisory engagements. See
"Business--Risk Management Products."

23
<PAGE>

BAI, one of our alternative investment products, was created in 1994 in
response to the opportunity we perceived in commercial real estate debt arising
from the dislocation of traditional lenders that had occurred and the resulting
lack of capital in the sector. We believed that BAI would capture equity-like
returns as an early market participant able to invest in these types of assets.
As the commercial real estate markets recovered and capital market
participation in commercial mortgage securities expanded, further opportunities
to generate equity-like returns diminished. As a result, BAI's Board of
Trustees and shareholders decided to adopt management's recommendation to
liquidate the fund. For the years ended December 31, 1996, 1997 and 1998, BAI
generated operating income (advisory and performance fees, net of expenses) of
$2.5 million, $4.2 million and $16.4 million, respectively. As a result of the
liquidation, which involved the sale of BAI's assets, BlackRock has realized an
operating loss of $0.6 million for the six months ended June 30, 1999. We do
not believe that the liquidation of the remaining assets and distributions to
shareholders will have a material impact on future operations. We expect the
liquidation of BAI will be completed by the fourth quarter of 1999.

Operating expenses primarily consist of employee compensation and benefit
expense, BAI incentive compensation expense, fund administration and servicing
expense, general and administrative expense and goodwill amortization. Employee
compensation and benefit expense reflects salaries, deferred and incentive
compensation, and related benefit costs. BAI incentive compensation expense
reflects compensation payable in accordance with various agreements to
investment advisory and other employees of BlackRock. Fund administration and
servicing expenses reflect payments made to PNC affiliated entities (see
"Certain Relationships and Related Transactions" and Note 7 of "Notes to
BlackRock's Consolidated Financial Statements") associated with the
administration and servicing of BlackRock's mutual funds. Goodwill at December
31, 1998 was $203.9 million with annual amortization expense of approximately
$9.7 million. Substantially all of the goodwill resulted from PNC's acquisition
of BFM on February 28, 1995.

Operating Results for Six Months Ended June 30, 1999 as Compared to Six Months
Ended June 30, 1998

Assets Under Management

Assets under management rose $25.1 billion, or 21.5%, to $141.8 billion
at June 30, 1999, as compared to $116.7 billion at June 30, 1998. The increase
was largely driven by a 35.0% growth in separate account assets, primarily
reflecting new fixed income advisory business. Net subscriptions totaled $24.4
billion, or 97.2% of the $25.1 billion increase in assets under management,
with the remaining $0.7 billion (2.8%) reflecting market appreciation.

<TABLE>
<CAPTION>
For the Six
Months Ended June
30, Period-to-Period
----------------- ------------------
1998 1999 $ Change % Change
-------- -------- -------- --------
($ in millions) ($ in millions)
<S> <C> <C> <C> <C>
Separate Accounts
Fixed income*.......................... $ 46,664 $ 68,286 $21,622 46.3%
Liquidity.............................. 12,738 12,362 (376) (3.0)%
Equity................................. 2,095 2,353 258 12.3%
-------- -------- -------
Subtotal............................... 61,497 83,001 21,504 35.0%
-------- -------- -------
Mutual Funds
Fixed income........................... 14,172 13,617 (555) (3.9)%
Liquidity.............................. 28,958 31,921 2,963 10.2%
Equity................................. 12,055 13,262 1,207 10.0%
-------- -------- -------
Subtotal............................... 55,185 58,800 3,615 6.6%
-------- -------- -------
Total.................................... $116,682 $141,801 $25,119 21.5%
======== ======== =======
</TABLE>
- --------
* including alternative investment products.

24
<PAGE>

Revenues

Investment advisory and administration fees increased $43.6 million, from
$125.5 million for the six months ended June 30, 1998 to $169.1 million for the
six months ended June 30, 1999. The growth in investment advisory and
administration fees was due to increases in assets under management for
separate accounts and mutual funds and was partially offset by reductions in
BAI-related performance fees as a result of the planned liquidation of the fund
by the fourth quarter of 1999.

<TABLE>
<CAPTION>
For the Six
Months Ended June
30, Period-to-Period
----------------- ------------------
1998 1999 $ Change % Change
-------- -------- -------- --------
($ in thousands) ($ in thousands)
<S> <C> <C> <C> <C>
Investment advisory and
administration fees:
Mutual funds...................... $ 67,403 $ 99,637 $32,234 47.8%
Separate accounts................. 42,376 71,569 29,193 68.9%
BAI............................... 15,761 (2,054) (17,815) (113.0)%
-------- -------- -------
Total investment advisory and
administration fees................ 125,540 169,152 43,612 34.7%
Other income........................ 5,713 10,941 5,228 91.5%
-------- -------- -------
Total revenue..................... $131,253 $180,093 $48,840 37.2%
======== ======== =======

Mutual fund advisory and administration fees increased $32.2 million for
the six months ended June 30, 1999 due to a $3.6 billion increase in mutual
fund assets under management and the May 1998 conversion of $8.2 billion of PNC
common trust funds into the BlackRock Funds, which earn higher advisory fees.
Separate account advisory fees rose $29.2 million largely as a result of a
$21.5 billion increase in separate account assets under management as well as
increased performance fees earned on BlackRock's domestic and off-shore fixed
income hedge funds. BAI advisory fees decreased $17.8 million due to the
discontinuance of any further business activity other than asset sales
associated with the fund's liquidation. Other income increased $5.2 million
primarily from new risk management advisory engagements and includes a $1.0
million increase for additional services provided to PNC. See "Certain
Relationships and Related Transactions--Transactions with PNC and Its
Subsidiaries."

Expenses

Operating expenses increased by $31.2 million, from $98.3 million for the
six months ended June 30, 1998 to $129.5 million for the six months ended June
30, 1999. The change was primarily the result of increases in employee
compensation and benefits, fund administration and servicing costs-affiliates
due to higher levels of PNC client assets under management in the BlackRock
Funds and general and administration expenses. The increases were partially
offset by lower incentive compensation in 1999 related to the liquidation of
BAI.

<CAPTION>
For the Six
Months Ended June
30, Period-to-Period
----------------- ------------------
1998 1999 $ Change % Change
-------- -------- -------- --------
($ in thousands) ($ in thousands)
<S> <C> <C> <C> <C>
Employee compensation and benefits.. $ 50,845 $ 65,964 $15,119 29.7%
BAI incentive compensation.......... 10,332 (1,494) (11,826) (114.5)%
Fund administration and servicing
costs-affiliates................... 15,656 36,334 20,678 132.1%
Amortization of goodwill............ 4,826 4,826 -- 0.0%
General and administration.......... 16,634 23,836 7,202 43.3%
-------- -------- -------
Total Operating Expenses.......... $ 98,293 $129,466 $31,173 31.7%
======== ======== =======
</TABLE>

25
<PAGE>

Employee compensation and benefits rose $15.1 million due to additional
expenses of $3.7 million related to salary and benefits and $11.4 million for
incentive compensation based primarily on operating profit growth. Salary and
benefit cost increases were the result of a 20.7% increase in full-time
employees to support business growth and enhancements to the company's 401(k)
plan which were partially offset by the adoption of SOP 98-1 (Accounting for
the Cost of Computer Software Developed or Obtained for Internal Use). BAI
incentive compensation decreased by $11.8 million due to the discontinuance of
any further business activity other than asset sales associated with the fund's
liquidation. Fund administration and servicing costs-affiliates increased $20.7
million primarily due to the May 1998 conversion of $8.2 billion of PNC common
trust funds into the BlackRock Funds, on which BlackRock pays higher service
fees. General and administration expenses increased $7.2 million primarily
attributable to additional expenditures of $1.6 million related to occupancy
and office services, $1.9 million related to marketing and promotional costs
and $2.1 million related to systems and communications. These increases
resulted from the substantial business growth experienced during the period as
well as management's decision to adjust the depreciable life on equipment from
five years to three years, which increased depreciation expense by $1.6
million.

Operating Income and Net Income

Operating income was $50.6 million for the six months ended June 30,
1999, representing a $17.7 million or 53.6% increase from the same period in
1998. Net interest expense decreased $0.7 million or 10.6% to $5.8 million for
the six months ended June 30, 1999 as compared to $6.5 million for the six
months ended June 30, 1998, due to the repayment of debt. Income tax expense
was $18.8 million and $12.6 million for the six months ended June 30, 1999 and
1998, respectively, representing effective tax rates of 42.0% and 47.6%. The
difference in the effective tax rates resulted from various permanent
differences and variations caused by state and local income tax accruals
pursuant to the PNC tax sharing policy which BlackRock is subject to prior to
the Tax Disaffiliation Agreement taking effect. Net income totaled $26.0
million for the six months ended June 30, 1999 as compared to $13.8 million for
the six months ended June 30, 1998, an increase of 87.7%.

Operating Results for 1998 as Compared to 1997

Assets Under Management

Assets under management rose $25.2 billion in 1998, propelled by a 35.4%
growth in separate account assets, primarily reflecting new fixed income
advisory business. Net subscriptions totaled $20.8 billion, or 83% of the $25.2
billion increase in assets under management, with the remaining $4.4 billion
(17%) reflecting market appreciation.

<TABLE>
<CAPTION>
At December 31, Year-to-Year
----------------- -----------------
1997 1998 $ Change % Change
-------- -------- -------- --------
($ in millions) ($ in millions)
<S> <C> <C> <C> <C>
Separate Accounts
Fixed income*.......................... $ 39,261 $ 52,869 $13,608 34.7%
Liquidity.............................. 10,019 13,826 3,807 38.0%
Equity................................. 1,763 2,417 654 37.1%
-------- -------- -------
Subtotal............................... 51,043 69,112 18,069 35.4%
-------- -------- -------
Mutual Funds
Fixed income........................... 13,714 13,888 174 1.3%
Liquidity.............................. 29,827 35,555 5,728 19.2%
Equity................................. 10,829 12,087 1,258 11.6%
-------- -------- -------
Subtotal............................... 54,370 61,530 7,160 13.2%
-------- -------- -------
Total.................................... $105,413 $130,642 $25,229 23.9%
======== ======== =======
</TABLE>
- --------
* including alternative investment products.

26
<PAGE>

Revenues

Investment advisory and administration fees increased $130.2 million,
from $194.8 million in 1997 to $325.0 million in 1998. The growth in investment
advisory and administration fees for 1998 was due to increases in assets under
management for separate accounts and mutual funds as well as an increase in
BAI- related performance fees.
<TABLE>
<CAPTION>
Year Ended December 31, Year-to-Year
----------------------- -------------------------
1997 1998 $ Change % Change
----------- ----------- ---------------- --------
($ in thousands) ($ in thousands)
<S> <C> <C> <C> <C>
Investment advisory and
administration fees:
Mutual funds............ $ 117,977 $ 162,487 $ 44,510 37.7%
Separate accounts....... 62,985 101,352 38,367 60.9%
BAI..................... 13,867 61,199 47,332 341.3%
----------- ----------- --------
Total investment advisory
and administration
fees.................... 194,829 325,038 130,209 66.8%
Other income............. 10,644 14,444 3,800 35.7%
----------- ----------- --------
Total revenue........... $ 205,473 $ 339,482 $134,009 65.2%
=========== =========== ========
</TABLE>

Mutual funds advisory and administration fees increased $44.5 million due
to a $7.2 billion increase in mutual fund assets under management and the May
1998 conversion of $8.2 billion of PNC common trust funds into the BlackRock
Funds which earn higher advisory fees. Separate account advisory fees rose
$38.4 million largely as a result of an $18.1 billion increase in separate
account assets under management as well as increased performance fees earned on
BlackRock's domestic and off-shore fixed income hedge funds. BAI advisory fees
increased $47.3 million primarily due to increased performance fees based on
the market value of fund assets to be liquidated and projected fund returns.
Other income increased $3.8 million primarily from new risk management advisory
engagements.

Expenses

Operating expenses increased by $110.5 million, from $149.6 million in
1997 to $260.1 million in 1998. The change was primarily the result of
increases in employee compensation and benefits, incentive compensation related
to the liquidation of BAI, and fund administration and servicing costs due to
higher levels of PNC client assets under management in the BlackRock Funds.

<TABLE>
<CAPTION>
Year Ended December 31, Year-to-Year
----------------------- -------------------------
1997 1998 $ Change % Change
----------- ----------- ---------------- --------
($ in thousands) ($ in thousands)
<S> <C> <C> <C> <C>
Employee compensation and
benefits................... $ 73,217 $ 109,741 $ 36,524 49.9%
BAI incentive compensation.. 9,688 44,806 35,118 362.5%
Fund administration and
servicing costs-
affiliates................. 27,278 52,972 25,694 94.2%
Amortization of goodwill.... 9,653 9,653 -- 0.0%
General and administration.. 29,764 38,696 8,932 30.0%
Mutual fund offering costs.. -- 4,252 4,252 NA
----------- ----------- --------
Total operating expenses.... $ 149,600 $ 260,120 $110,520 73.9%
=========== =========== ========
</TABLE>

Employee compensation and benefits rose $36.5 million due to additional
expenses of $16.1 million related to salary and benefits, $16.0 million for
incentive compensation based primarily on operating profit growth and $4.4
million associated with the establishment of a deferred compensation program to
retain key executives and employees. Salary and benefit cost increases largely
resulted from a 25% rise in full time employees to support business growth and
enhance infrastructure. BAI incentive compensation increased $35.1 million
based on the substantial increase in BAI performance fee revenues. Fund
administration and

27
<PAGE>

servicing costs-affiliates increased $25.7 million primarily due to the May
1998 conversion of $8.2 billion of PNC common trust funds into the BlackRock
Funds on which BlackRock pays higher service fees. General and administration
expenses increased $8.9 million, primarily attributable to additional
expenditures of $1.8 million related to occupancy and office services, $1.8
million related to marketing and promotion and $1.3 million related to systems
and communications. These increases resulted from the substantial business
growth experienced in 1998 as well as from BlackRock's formation, which
required significant staff increases and included sizable new investments in
technology and leased premises as compared to the prior year. BlackRock also
launched a new high yield mutual fund in December 1998, which resulted in the
immediate recognition of $4.3 million of expense for broker-related sales
commissions.

Operating Income and Net Income

Operating income was $79.4 million for 1998, representing a $23.5 million
or 42.0% increase from the prior year. Net interest expense decreased to $11.4
million for 1998 as compared to $17.1 million for 1997, a 33.7% decrease due to
the continuing reduction of debt. Income tax expense was $32.4 million and
$16.7 million for 1998 and 1997, respectively, representing effective tax rates
of 47.6% and 43.0%. The increase in the effective tax rate from the prior year
is attributable to increased state and local taxes. Net income totaled $35.6
million for 1998 as compared to $22.1 million for 1997, an increase of 61.3%.

Operating Results for 1997 as Compared to 1996

Assets Under Management

Total assets under management increased by 27.4% in 1997, reflecting
strong growth in both separate account and mutual fund assets under management.
Separate account assets under management rose $13.5 billion due to continued
strong growth in new fixed income clients while mutual fund assets under
management increased $9.2 billion, primarily due to $7.2 billion in net
subscriptions.

<TABLE>
<CAPTION>
At December 31, Year-to-Year
---------------- ------------------------
1996 1997 $ Change % Change
------- -------- --------------- --------
($ in millions) ($ in millions)
<S> <C> <C> <C> <C>
Separate Accounts
Fixed income*.................... $28,958 $ 39,261 $10,303 35.6%
Liquidity........................ 7,430 10,019 2,589 34.8%
Equity........................... 1,204 1,763 559 46.4%
------- -------- -------
Subtotal......................... 37,592 51,043 13,451 35.8%
------- -------- -------
Mutual Funds
Fixed income..................... 12,546 13,714 1,168 9.3%
Liquidity........................ 23,933 29,827 5,894 24.6%
Equity........................... 8,643 10,829 2,186 25.3%
------- -------- -------
Subtotal......................... 45,122 54,370 9,248 20.5%
------- -------- -------
Total.............................. $82,714 $105,413 $22,699 27.4%
======= ======== =======
</TABLE>
- --------
* including alternative investment products.

Revenues

Investment advisory and administration fees totaled $194.8 million in
1997, which represented a $58.5 million or 42.9% increase from 1996. The
increase in investment advisory and administration fees was primarily
attributable to a $22.7 billion rise in mutual fund and separate account assets
under management.

28
<PAGE>

Mutual fund advisory and administration fees for 1997 of $118.0 million
increased $30.8 million from 1996 or 35.3% as mutual fund assets under
management increased $9.2 billion or 20.5%. Separate account advisory fees were
$63.0 million in 1997, an increase of $19.9 million or 46.2% reflecting a $13.5
billion or 35.8% increase in separate account assets under management. BAI
advisory fees increased $7.8 million to $13.9 million in 1997, primarily as a
result of higher performance fees. Other income increased by $0.5 million to
$10.6 million in 1997.

Expenses

Operating expenses increased $38.7 million or 34.8% from $110.9 million
in 1996 to $149.6 million in 1997. The increase was primarily due to
significant business growth, which resulted in higher employee compensation and
benefit costs and increased marketing expenses.

Employee compensation and benefits of $73.2 million were up $19.5 million
or 36.3% compared with 1996. The increase was attributable to additional
expenses of $8.0 million related to salary and benefits and $11.5 million for
incentive compensation based on operating profit growth. Salary and benefit
cost increases were largely due to higher staffing levels to support new
business growth together with normal merit pay raises and escalations in
benefit costs. BAI incentive compensation of $9.7 million was up $6.2 million
from the prior year. The rise was largely attributable to the rise in earned
performance fees. Fund administration and servicing costs were $27.3 million in
1997, an increase of $7.7 million or 39.1% from the prior year. The increase
was attributable to increases in PNC private banking client assets in the
BlackRock Funds as well as higher assets under management in the Provident
Institutional Funds on which BlackRock pays administration fees to a PNC mutual
fund processing subsidiary. General and administration expenses were $29.8
million in 1997, a $5.3 million or 21.5% increase over 1996. The increase was
primarily attributable to a $4.1 million rise in marketing and promotional
costs associated with increased mutual fund and institutional separate account
sales.

Operating Income and Net Income

Operating income was $55.9 million for 1997, representing a $20.3 million
increase or 57.2% from the prior year. Net interest expense declined to $17.1
million in 1997 from $18.1 million in 1996. Income tax expense was $16.7
million and $8.5 million for 1997 and 1996, respectively, representing
effective tax rates of 43.0% and 48.6%. Net income totaled $22.1 million for
1997 as compared to $9.0 million for 1996, an increase of 146.4%.

Liquidity and Capital Resources

BlackRock's business is not capital intensive. BlackRock has historically
met its working capital requirements through cash generated by its operating
activities and borrowings with PNC Bank under a $175 million revolving credit
facility. Cash provided by operating activities totaled $17.9 million, $47.2
million and $53.7 million for the years ended December 31, 1996, 1997 and 1998
respectively, and $15.6 million for the first six months of 1999. BlackRock
expects that such cash flows will continue to serve as the principal source of
working capital for the near future.

Net cash flow used in investing activities was $3.7 million, $3.0 million
and $5.0 million for the years ended December 31, 1996, 1997 and 1998
respectively, and $9.0 million for the first six months of 1999. Capital
expenditures for computer hardware, furniture and equipment and leasehold
improvements were $4.2 million, $2.2 million and $8.4 million for the years
ended December 31, 1996, 1997 and 1998 respectively, and $9.1 million for the
first six months of 1999.

Total capital at December 31, 1998, was $303.2 million and was comprised
of $106.2 million of stockholders' equity and $197.0 million of debt. Debt at
December 31, 1998 included $150.0 million outstanding on a $175.0 million
revolving credit facility with PNC Bank due December 31, 2002, and a $47.0
million unsecured note due through February 28, 2000 with B.P. Partners, L.P.,
an entity comprised of former partners of BFM who received deferred notes as
part of the purchase price for BFM. The $197.0 million in

29
<PAGE>

outstanding debt as of December 31, 1998 represents amounts remaining from
PNC's $240.0 million acquisition of BFM on February 28, 1995, which was
recorded on BFM's books. The revolving credit facility with PNC Bank, dated
February 28, 1996, as amended, bears interest at PNC Bank's "prime rate" and is
not terminable by the bank except in the event of a default. The unsecured note
bears interest at a fixed rate of 7.5% and is unconditionally guaranteed by
PNC. BlackRock repaid $18.8 million on February 28, 1999, and $28.2 million is
due on February 28, 2000. Total capital at June 30, 1999 was $285.3 million and
was comprised of $132.1 million of stockholders' equity and $153.2 million of
debt. Debt at June 30, 1999 included $125.0 million outstanding on the $175.0
million revolving credit facility with PNC Bank due December 31, 2002, and
$28.2 million on the unsecured note due February 28, 2000 with B. P. Partners,
L.P.

BlackRock intends that the net proceeds from the offerings will be used
to repay a portion of the outstanding indebtedness under our $175 million
revolving credit facility with PNC Bank.

Net cash flow used in financing activities was $4.4 million and $40.4
million for 1998 and 1997, respectively, and $43.8 million for the six months
ended June 30, 1999, while such activities provided approximately $20.8 million
of cash flow in 1996. During 1998, BlackRock received $34.2 million in net
proceeds from the sale of restricted stock to employees. On the March 31, 1998
formation date, $12.3 million in dividends were paid to PNC in order to
establish an appropriate exchange ratio for PNC and employee ownership
interests based on the fair market value of the combined businesses. Debt
payments totaled $28.2 million and $30.6 million for 1998 and 1997,
respectively, and $43.8 million for the six months ended June 30, 1999, with
outstanding debt increasing in 1996 by approximately $19.9 million.

Recent Accounting Developments

In 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133 ("Accounting for
Derivative Instruments and Hedging Activities"). SFAS No. 133 establishes
standards for recognizing and establishing fair value for derivative financial
instruments. SFAS No. 133, as amended by SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date
of FASB Statement No. 133," is required to be adopted for fiscal years
beginning after June 15, 2000. BlackRock does not expect implementation to have
any significant effect on BlackRock's reported financial position or results of
operations.

Seasonality

BlackRock does not believe its operations are subject to significant
seasonal fluctuations.

Interest Rates

The value of assets under management is affected by changes in interest
rates. Since BlackRock derives the majority of its revenues from investment
advisory fees based on assets under management, BlackRock's revenues may be
adversely affected by changing interest rates. In a period of rapidly rising
interest rates, BlackRock's assets under management would likely be negatively
affected by reduced asset values and increased redemptions. See "Risk Factors--
Risk factors affecting our business--Decline in the securities markets could
lead to a decline in our revenues."

Inflation

The majority of BlackRock's revenues are based on the value of assets
under management. There is no predictable relationship between the rate of
inflation and the value of assets under management by BlackRock, except as
inflation may affect interest rates. BlackRock does not believe inflation will
significantly affect its compensation costs as they are substantially variable
in nature. However, the rate of inflation may affect BlackRock expenses such as
information technology and occupancy costs. To the extent inflation results in
rising interest rates and has other effects upon the securities markets, it may
adversely affect BlackRock's results of operations by reducing BlackRock's
assets under management, revenues or otherwise. See "Risk Factors--Risk factors
affecting our business--Decline in the securities markets could lead to a
decline in our revenues."

30
<PAGE>

Year 2000 Readiness

BlackRock has been working since 1997 to prepare its computer systems to
meet the Year 2000 challenge. This process involves reviewing, modifying and
replacing existing software, hardware and other equipment, as necessary, and
communicating with counterparties, external service providers and customers
regarding their responses to Year 2000 issues.

As of December 31, 1998, substantially all of BlackRock's internally
developed software had been tested and remediated where necessary. We had
substantially completed an organization-wide assessment of Year 2000 issues
relating to our critical system equipment as well as an assessment of the Year
2000 preparedness of our identified critical service providers.

The Year 2000 issue may have an adverse impact on the operations and
financial condition of the issuers of the securities in which the firm invests.
Before purchasing securities, BlackRock considers the Year 2000 readiness of
issuers. The depth of the review depends on the issuers' industry. BlackRock
will continue to review and assess the Year 2000 preparedness of issuers
throughout 1999.

During the third quarter of 1999, BlackRock plans to conduct tests of its
networking and telecommunications systems in an attempt to verify vendor
representations of Year 2000 readiness. We currently estimate that the total
cost of implementing our Year 2000 programs will not have a material impact on
our results of operations, liquidity or capital resources. No significant
expenditures have been made to replace existing systems solely for Year 2000
readiness reasons. The costs and timetable in which BlackRock plans to complete
its Year 2000 readiness activities are based on management's best estimates,
which were derived using numerous assumptions of future events including the
continued availability of certain resources, third party preparedness and other
factors. We have incurred approximately $800,000 in Year 2000 readiness
expenses through June 30, 1999 and we expect to spend an additional $200,000 to
fully implement our program. BlackRock can make no guarantee that these
estimates will prove correct, and actual results could differ from such plans.

BlackRock has reviewed and strengthened its business continuity plans to
address Year 2000 implications. We have written business continuity plans in
place for each of our four offices, including recovery strategies for data,
communications and personnel, designed to achieve the goal of resuming critical
business functions at an alternate site within 24 hours of an emergency. We
update and test these plans at least once a year to reflect changes in our
business and our systems. We also have written contingency plans for all of our
critical business systems at each office site which outline alternative
business procedures in the event of minor disruptions.

We are working with our critical service providers to provide alternate
service to our disaster recovery sites. We expect to have backup communications
lines in place, where appropriate, by December 31, 1999.

BlackRock's Year 2000 readiness efforts and contingency plans are also
subject to oversight and regulation by the SEC, the OCC, the Federal Reserve
and other regulatory bodies. As a registered investment adviser, we were
required to file a disclosure document with the SEC regarding our preparation
for Year 2000 complications. We have also responded to specific inquiries from,
and provided information to, the SEC, the OCC and the Federal Reserve regarding
the potential adverse implications to our business from Year 2000 consequences
and our plans for addressing them.

It is not possible to predict with certainty all of the adverse effects
that could result from a failure of BlackRock or of third parties to become
fully Year 2000 ready or whether such effects could have a material adverse
impact on BlackRock. However, if BlackRock were to fail to correct internal
Year 2000 problems or if BlackRock's contingency plans fail to mitigate any
such problems, or if one or more third parties is unable, due

31
<PAGE>

to Year 2000 issues, to provide services required by BlackRock, a disruption of
operations resulting in increased operating costs, loss of revenues and other
adverse effects could occur. A disruption of operations might include a
temporary inability to process transactions and delays in providing services.
In addition, to the extent that the issuers of securities are weakened due to
Year 2000 issues, the value and liquidity of client portfolios could be
adversely affected. Disruption or suspension of activity in the world's
financial markets is also possible as a result of Year 2000 issues. See "Risk
Factors--Risk factors affecting our business--Failure to achieve Year 2000
readiness could disrupt operations and cause financial losses which could
decrease our stock price."

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<PAGE>

BUSINESS

We differentiate ourselves from our competitors through our investment
process, the risk management software we have developed, the quality of our
client service and the stability of our management team. Together, these have
helped us deliver investment returns that have consistently met or exceeded our
clients' targets while assuming equal or lower levels of risk than performance
benchmarks. They also have enabled our experienced professionals to serve the
varying needs of our clients with customized products and services. We believe
that these factors, as well as the quality and depth of our employees, have
been critical to achieving growth in assets under management and will continue
to be of primary importance to our future success. We also believe that these
offerings will enhance stockholder value by furthering our ability to attract
and retain talented professionals, permitting strategic investments in our
existing business and improving our ability to participate in future industry
consolidation.

Assets Under Management

<TABLE>
<CAPTION>
At December 31, At June 30, Compound
----------------------------------------- ----------- Annual
1994 1995 1996 1997 1998 1999 Growth Rate
------- ------- ------- -------- -------- ----------- -----------
($ in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Separate Accounts
Fixed income*......... $13,848 $23,345 $28,958 $ 39,261 $ 52,869 $ 68,286 43%
Liquidity............. 3,269 5,556 7,430 10,019 13,826 12,362 34%
Equity................ 540 700 1,204 1,763 2,417 2,353 39%
------- ------- ------- -------- -------- --------
Subtotal.............. 17,657 29,601 37,592 51,043 69,112 83,001 41%
<CAPTION>
Mutual Funds
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed income.......... 10,021 11,969 12,546 13,714 13,888 13,617 7%
Liquidity............. 20,398 21,183 23,933 29,827 35,555 31,921 10%
Equity................ 4,615 6,306 8,643 10,829 12,087 13,262 26%
------- ------- ------- -------- -------- --------
Subtotal.............. 35,034 39,458 45,122 54,370 61,530 58,800 12%
------- ------- ------- -------- -------- --------
Total................. $52,691 $69,059 $82,714 $105,413 $130,642 $141,801 25%
======= ======= ======= ======== ======== ========
</TABLE>
- --------
* including alternative investment products.

Background

In 1995, PNC acquired BFM, then a $25 billion fixed income manager, to
complement existing capabilities in liquidity and equities. Since the
acquisition, all of BFM's senior management team have remained with the firm.
During the same period fixed income assets have nearly tripled. As highlighted
below, the BFM management team has assumed increasing responsibility for a
substantial portion of PNC's other asset management activities over time.

. Mutual Funds. PNC has been actively involved in the mutual funds
management business for over 40 years, having offered its first
common trust fund in 1956. In January 1996, the BFM management
team merged several of PNC's mutual fund families and assumed
responsibility for related marketing and product management
efforts. We have continually worked to enhance service to PNC and
its customers, which represent the funds' largest investor base.
In addition, we sought to build on the relationships developed
through BFM's mutual fund business by targeting distribution
through broker-dealers and other intermediaries. Assets have grown
by more than $11 billion, or 85%, since BFM's management team
assumed responsibility for the fund family, which we renamed
BlackRock Funds in 1998. We have also established more than 200
broker agreements and as of June 30, 1999, BlackRock Funds ranked
as the 14th largest wholesale fund family in the United States.

. Liquidity. PNC entered the liquidity management business in 1973
with the introduction of TempFund, the first institutional money
market fund. At year-end 1996, BFM's management

33
<PAGE>

team was charged with overseeing PNC's liquidity management
business. We restructured sales and marketing to enhance our
ability to grow our institutional money market fund family,
Provident Institutional Funds, and to build a separate account
business in this product area. We also transitioned PNC's
liquidity portfolios to BlackRock's fixed income system to enhance
capacity and operating efficiency. Liquidity assets have increased
by $13 billion, or more than 40%, since BFM assumed responsibility
for the business.

. Equities. PNC's involvement in equity funds extends back to 1958
when it introduced the PNC Common Stock Fund, a common trust fund
that was merged into the BlackRock Funds Select Equity Portfolio
in 1998. The BFM management team assumed responsibility for a
substantial portion of PNC's equity investment management
businesses in the first quarter of 1998. Our initial efforts have
focused on maintaining continuity with our equity professionals
and on building the foundation for future growth by making
critical infrastructure investments, pursuing selected
enhancements to our investment process and integrating equity
expertise with our marketing and client service capabilities.

We believe that the PNC/BFM affiliation has been and will continue to be
successful in large measure because of our shared commitment to attracting and
retaining talented professionals, developing and delivering highly
sophisticated investment management services and systems and finding ways to
jointly pursue distribution of our products.

Asset Management Products

Today, we offer a wide variety of fixed income, liquidity, equity and
alternative investment products. Revenue from these products consists of
advisory fees typically structured as a percentage of assets managed and, in
some instances, a performance fee expressed as a percentage of returns
realized in excess of agreed-upon targets.

. Fixed Income. At June 30, 1999, fixed income assets under
management, excluding alternative investment products, were $80
billion. Since 1994, fixed income assets have grown by 31% on a
compound annual basis despite the fact that investors have been
shifting money out of bonds and into stocks to participate in the
equity bull market of the past decade.

Over time we have introduced new fixed income products to better
meet investor needs. Our product development efforts emphasize
meeting client needs by using existing capabilities and by adding
professional expertise that can be fully integrated with our
existing operations. The two capabilities we introduced in 1998,
BlackRock's Equity PLUS product and high yield bond management,
exemplify our deliberate approach to product line expansion.
Specifically, BlackRock's Equity PLUS product utilizes existing
fixed income and derivatives expertise to meet client demand for
new ways to participate in the equity markets, while development
of our high yield capability was deferred until we identified high
caliber professionals who would become integrated members of our
portfolio management team and complement existing fixed income
capabilities. Our fixed income products, excluding alternative
products, can be broadly grouped into three categories, as
described below.

Fixed Income Products*

<TABLE>
<CAPTION>
At December 31, At June 30,
--------------------------------------- -----------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -----------
($ in millions)
<S> <C> <C> <C> <C> <C> <C>
Core........................ $ 5,061 $ 9,817 $14,175 $21,050 $28,310 $32,936
Sector specialty............ 7,143 11,044 11,136 12,771 16,838 19,214
Targeted duration........... 11,665 14,352 15,790 18,665 19,673 27,656
------- ------- ------- ------- ------- -------
Total....................... $23,869 $35,213 $41,101 $52,486 $64,821 $79,806
======= ======= ======= ======= ======= =======
</TABLE>
- --------
* excluding alternative investment products.

34
<PAGE>

Core. Core products represented 41% of our fixed income assets
at June 30, 1999, and have increased at a compound annual growth
rate of 52% since 1994. All of these accounts seek to achieve
superior returns while assuming equal or lower levels of risk
than the Lehman Brothers Aggregate Index or other broad market
indices. Traditional core accounts invest in all asset classes
represented in the index while maintaining portfolio duration
close to that of the securities in the index. Enhanced index
core accounts more tightly constrain portfolio risk parameters
relative to the benchmark, while core plus accounts are
permitted to invest in assets not included in the index, such as
high yield and non-dollar debt.

Sector specialty. Sector specialty accounts represented 24% of
our fixed income assets at June 30, 1999, and have grown at a
25% compound annual rate since 1994. This product line includes
all accounts that seek to outperform a subset of the broad fixed
income market. Examples include mortgage, corporate, U.S.
Treasury and high yield mandates. The investment objective is
typically total return based, although clients may specify
income, tax or other constraints to be observed in the
management of their portfolios.

Targeted duration. Targeted duration products represented 35% of
our fixed income assets at June 30, 1999, and have experienced
compound annual growth in excess of 21% since 1994. These
accounts are designed to achieve returns in excess of the
duration of specified liabilities or of indices consisting of
U.S. Treasury securities or other obligations maturing within
defined time parameters. These products are often used by
investors seeking to earn a spread relative to their financing
costs or to fund other liabilities.

. Liquidity. At June 30, 1999, liquidity assets under management
were $44 billion. Products are designed to meet the needs of
domestic corporations and their foreign subsidiaries, municipal
treasurers, banks, bank trust departments and other
intermediaries. We seek to achieve attractive yields, subject to
stringent safety and liquidity guidelines, which are implemented
by a dedicated team of portfolio managers who are based in
Wilmington, Delaware and are supported by our fixed income credit
analyst team as well as our risk management systems. In general,
clients use our liquidity products to invest money that they
expect to need in the short-term. As a result, our money market
portfolios experience a high level of subscriptions and
redemptions on a daily basis, and liquidity assets under
management can be quite volatile. For example, at June 30, 1999,
liquidity assets were more than $5 billion less than at year-end
1998, although they were nearly $3 billion higher than they were
at June 30, 1998. As highlighted below, we offer three basic types
of liquidity products.

Liquidity Products

<TABLE>
<CAPTION>
At December 31, At June 30,
--------------------------------------- -----------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -----------
($ in millions)
<S> <C> <C> <C> <C> <C> <C>
Prime....................... $12,874 $13,187 $16,103 $23,279 $32,479 $28,082
Government.................. 7,518 8,954 10,211 11,384 12,677 12,254
Tax-exempt.................. 3,275 4,598 5,049 5,183 4,225 3,947
------- ------- ------- ------- ------- -------
Total....................... $23,667 $26,739 $31,363 $39,846 $49,381 $44,283
======= ======= ======= ======= ======= =======
</TABLE>

Prime. Prime products are designed to utilize a wide variety of
liquidity instruments to achieve enhanced money market returns.
These portfolios invest in "prime" or short-term corporate and
bank debt, as well as U.S. Treasury and agency obligations.
Customized versions include our offshore liquidity funds, which
are subject to investment constraints based on tax
considerations, and separate accounts that permit broader
investment flexibility than money market funds.

35
<PAGE>

Government. Government products are designed to meet the needs
of investors who cannot assume credit risk of any kind or
otherwise prefer highly conservative products for their
liquidity investments. These products include all portfolios
that invest solely in U.S. Treasuries, agency securities and/or
obligations backed by U.S. Treasuries or agencies.

Tax-exempt. Tax-exempt products are designed for investors
seeking to optimize after-tax returns. These products include
national funds investing in securities that are exempt from
federal taxation, as well as state-specific funds that invest
solely in securities exempt from both federal and state
taxation.

. Equity. Our equity business represents the smallest of our primary
products lines, with assets under management of approximately $16
billion at June 30, 1999. Over 80% of these assets are in mutual
funds, all of which emphasize long-term capital appreciation and
strict adherence to investment discipline and market
capitalization guidelines. We have expanded our capacity in this
business and we intend to pursue separate accounts for
institutional investors, particularly as longer term investment
performance track records are established. Strategies are
developed and implemented by dedicated portfolio managers and
research analysts based in Philadelphia, Pennsylvania, and
Edinburgh, Scotland. Our equity products can be classified as
discussed below.

Equity Products

<TABLE>
<CAPTION>
At December 31, At June 30,
------------------------------------ -----------
1994 1995 1996 1997 1998 1999
------ ------ ------ ------- ------- -----------
($ in millions)
<S> <C> <C> <C> <C> <C> <C>
U.S. growth.................... $ 841 $1,576 $2,676 $ 3,542 $ 4,447 $ 4,881
U.S. value..................... 1,729 2,185 2,990 3,989 4,144 4,110
International.................. 846 1,056 1,676 1,926 2,084 1,984
Other.......................... 1,739 2,189 2,505 3,135 3,829 4,640
------ ------ ------ ------- ------- -------
Total.......................... $5,155 $7,006 $9,847 $12,592 $14,504 $15,615
====== ====== ====== ======= ======= =======
</TABLE>

U.S. growth. U.S. growth equity products seek to achieve returns
by investing in companies that are expected to realize
significant earnings growth and price appreciation. Products are
differentiated by the market capitalization of the companies in
which they invest, and include large-, mid-, small- and micro-
cap portfolios.

U.S. value. U.S. value equity products seek to achieve returns
versus market indices by investing in companies that are
undervalued relative to industry peers and/or historical trading
ratios. These products also vary according to the size of the
market capitalization of the underlying stocks in the portfolio,
and include large-, mid- and small-cap portfolios.

International. International equity products are designed to
deliver returns by investing in a variety of foreign stock
markets. These products are typically differentiated by
geographic markets and include Europe, Pacific Basin and
emerging market portfolios, as well as Europe, Australia and Far
East (EAFE) combined portfolios.

Other. Other equity products that we offer include balanced
funds, which invest in both equities and fixed income
securities, as well as index and enhanced index funds.

. Alternative Investment Products. At June 30, 1999, we managed $2.1
billion in alternative investment products. We have created these
products to take advantage of unique market opportunities or to
meet specific client interests. These products usually involve a
higher level of investment risk and offer the potential for
significantly greater absolute returns than our traditional
investment products. We generally structure these products as
commingled investment vehicles and limit the amount of capital we
will accept from investors. To date, we have created four
alternative investment products.

36
<PAGE>

Alternative Investment Products

<TABLE>
<CAPTION>
At December 31, At June 30,
---------------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1994 1995 1996 1997 1998 1999
------ ---- ---- ---- ------ ------
($ in millions)
BAI.................................... $ -- $101 $359 $243 $ 173 $ 159
Obsidian............................... -- -- 44 246 582 760
Anthracite............................. -- -- -- -- 181 178
Magnetite.............................. -- -- -- -- 1,000 1,000
------ ---- ---- ---- ------ ------
Total.................................. $ -- $101 $403 $489 $1,936 $2,097
====== ==== ==== ==== ====== ======
</TABLE>

BlackRock Asset Investors. BAI was created in 1994 to target
opportunities in the rapidly changing real estate financing
markets. We structured BAI as a mutual fund to address unique
regulatory restrictions applicable to our pension clients. BAI
is currently in liquidation, which we expect to complete by the
fourth quarter of 1999. We expect to realize returns
substantially in excess of our original targets.

Obsidian Funds. The Obsidian Funds, our domestic and offshore
fixed income hedge funds, were introduced in 1996 in direct
response to client interest. These products implement the
strategies of our fixed income portfolio management team on a
more leveraged or more concentrated basis.

Anthracite Capital. Anthracite Capital Inc. (NYSE: AHR) was
offered in early 1998 to focus on continuing investment
opportunities in the real estate debt markets. Anthracite is a
mortgage REIT that brings together our capital markets expertise
with PNC's commercial mortgage loan origination and servicing
capabilities. We aggressively restructured Anthracite's
asset/liability structure last fall to strengthen its balance
sheet. We continue to seek ways to enhance Anthracite's
performance.

Magnetite Asset Investors. Late last year, we created Magnetite
Asset Investors, LLC to pursue investment opportunities in the
high yield market. Specifically, Magnetite invests in a variety
of high yield securities using our disciplined investment
process and the sub-advisory services of Kelso & Co., a
leveraged buyout firm, to enhance Magnetite's access to certain
types of high yield investments. Magnetite was privately offered
to institutional and high net worth investors, from whom we
raised debt and equity capital of $1 billion.

Investment Process

Our investment process emphasizes a highly disciplined team approach,
rather than depending upon a few "star" managers, use of our extensive
proprietary risk management software, and intensive credit and fundamental
research. Multiple checks and balances are incorporated in the process,
including automated compliance monitoring. The formal components of our
investment process include new account meetings prior to funding, daily
portfolio management meetings, weekly investment strategy group meetings and
monthly account review meetings. Other groups that support the investment
process, such as the credit committee and product specialist teams, also meet
regularly. All of these efforts are designed to help us achieve our clients'
objectives, while adhering to their investment guidelines and regulatory
requirements and conducting our operations efficiently.

. Investment Strategy. Our fixed income strategies seek to achieve
consistent returns in excess of client benchmarks with equal or
lower levels of risk. Our liquidity strategies concentrate on
enhancing yield, subject to safety and liquidity guidelines.
Although interest rates are a critical factor in determining bond
values, we do not emphasize strategies that involve speculating on
the level or direction of interest rates. Instead, we seek to add
value relative to client benchmarks principally by choosing the
types of bonds and the individual securities in which to invest.
The judgment of our portfolio managers, as well as quantitative

37
<PAGE>

and credit research, are fundamental to our investment process.
Broad strategies are set by our investment strategy group, which
considers macroeconomic and market conditions, as well as credit
and liquidity trends, to determine appropriate portfolio
positioning. The investment strategy group's conclusions are
implemented across all portfolios by product specialists, subject
to each client's investment guidelines.

Similarly, our equity strategies seek to achieve returns in excess
of market indices. We seek to add value through a disciplined
stock selection process that uses inputs from proprietary
quantitative analysis, fundamental research provided by our equity
analysts and market flow information supplied by our equity
traders. Strategies are developed by portfolio management teams
dedicated to each of our equity specialties.

. Risk Management. We look at investment risk across all of our
products in an asset/liability management framework. We believe
that in order to achieve long-term investment performance
consistent with clients' expectations, we must have a
comprehensive understanding of the investment risks taken, or
proposed to be taken, in each portfolio relative to the
corresponding liability, as well as those risks inherent in the
increasingly complex global capital markets. Our risk analyses are
customized as necessary to address unique regulatory, accounting
and tax considerations applicable to individual client portfolios.
We produce risk management reports daily and provide on-line
access to analyses that our portfolio managers use to evaluate and
monitor risks and refine investment strategy.

Credit and fundamental research are also critical components of
our investment process. Fixed income analysts evaluate industry
conditions, the creditworthiness of individual issuers and the
features of individual securities in order to recommend relative
industry weightings, establish our approved credit list and
provide ongoing surveillance throughout the holding period. Equity
analysts review company filings and research reports and visit
companies to assess numerous factors, including the quality of a
company's management team, its cash flows, the diversity of its
products and customers, its balance sheet strength and financial
condition, and both the company's and the industry's stage in the
business life cycle.

. Compliance. Our proprietary risk management system, used in our
fixed income and liquidity businesses, provides a high degree of
automation in trade processing and compliance. Trades are entered
electronically by our portfolio managers. Compliance criteria are
built into our system to provide efficient checks and balances.
Our system is designed to prevent execution of non-compliant
trades and to alert portfolio compliance personnel, who consult
investment guidelines and regulations, as well as portfolio and
account managers, to determine further action. Compliant trades
are forwarded to operations and administration personnel and to
clients' custodians, who work together to process each trade from
confirmation through settlement. Similar, though more manual,
processes are applied in our equity business and opportunities
will be pursued to achieve greater automation in these activities
over time.

. Interdisciplinary Account Teams. All account team members,
including marketing and client service, portfolio and risk
management, administration, operations and compliance personnel,
attend formal monthly account review meetings. These meetings are
organized by product type, so that deviations in performance among
accounts with comparable objectives and guidelines can be quickly
identified. In addition, investment performance, guideline
changes, and custody and trade operations issues are reviewed for
each account. To facilitate ongoing communication and senior
management oversight, up-to-date guidelines, portfolio holdings,
risk analyses and credit research are published on our intranet.

. Investment Performance. Separate account returns are aggregated
into composites in accordance with industry standards and reported
to pension consultants, who track and report performance (as
measured by gross returns) relative to market indices and manager
universes. Similarly, independent third parties, such as Lipper
Inc. and others, maintain mutual fund data and report performance
relative to indices and peers.

38
<PAGE>

. Fixed income performance is illustrated below for our core fixed
income product, which represents over 40% of our total fixed
income assets under management. Specifically, over the past 7
years we have consistently achieved higher returns and lower risk
than both the Lehman Brothers Aggregate Index, the most
frequently used benchmark, and a group of 51 managers reporting
core composite returns to Frank Russell Company.

. Liquidity performance is illustrated below for our TempFund,
which represents more than 50% of the assets managed in our
Provident Institutional Funds. Specifically, over the past 10
years, we have delivered higher yields and lower risk than the
universe of first tier, institutions-only money market funds as
reported by IBC Financial.

[LOGO--Composite and TempFund]

39
<PAGE>

. Equity performance is illustrated with the Lipper quartile
rankings of the BlackRock Funds equity portfolios, which represent
more than 80% of our equity assets under management. For the 1-
year period ended June 30, 1999, six of our equity funds ranked in
the first quartile.

BlackRock Funds Portfolios
Lipper Quartile Ranking* as of June 30, 1999

<TABLE>
<CAPTION>
1-Year 3-Year 5-Year
------ ------ ------
<S> <C> <C> <C>
U.S. growth
Large-cap growth......................................... 1 1 1
Mid-cap growth........................................... 1 NA NA
Small-cap growth......................................... 1 3 1
Micro-cap................................................ 1 NA NA
U.S. value
Large-cap value.......................................... 3 2 2
Mid-cap value............................................ 4 NA NA
Small-cap value.......................................... 4 2 3
International
International equity..................................... 2 3 3
International small cap.................................. 3 NA NA
International emerging markets........................... 3 4 4
Other
Index equity............................................. 2 2 3
Select equity............................................ 1 1 1
Balanced................................................. 1 1 1
</TABLE>
- --------
* The Lipper rankings and percentiles are from Lipper Inc. Lipper is a mutual
fund performance monitor. Lipper rankings are based on total returns with
dividends and distributions reinvested and do not reflect sales charges.
Funds with returns among the top 25% of a peer group of portfolios with
comparable objectives are in the first quartile, 25% to 50% are in the
second quartile and 50% to 75% are in the third quartile. Funds with returns
among the bottom 25% of returns are in the fourth quartile.

Distribution

Our investment products are offered to individual and institutional
investors worldwide through separate accounts and a variety of mutual funds.
Senior professionals work closely with our clients, consultants and
distributors to better understand investor needs. We tailor our products and
services to meet differing return objectives and risk tolerances, as well as
regulatory, tax, accounting and credit constraints. We use our technology
capabilities to develop products, to enhance client service by customizing
reports and, in the case of institutional clients, to deliver them efficiently
over the Internet.

. Separate Accounts. We have increased separate account assets under
management from $18 billion at year-end 1994 to $83 billion at
June 30, 1999, which represents compound annual growth of 41%.
Asset growth reflects additional assets from existing clients and
new client assignments. We distribute separate accounts and
alternative investment products principally through the direct
marketing efforts of our account management group, which included
36 professionals as of June 30, 1999. These employees focus
primarily on three client bases: tax-exempt, taxable and
international institutions. Alternative investment products are
used to expand investment options offered to existing clients and
to gain access to relatively untapped segments of the investor
universe.

40
<PAGE>

Separate Account Clients

<TABLE>
<CAPTION>
At December 31, At June 30,
--------------------------------------- -----------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -----------
($ in millions)
<S> <C> <C> <C> <C> <C> <C>
Tax-exempt.................. $ 4,444 $ 7,502 $12,068 $18,856 $25,181 $30,897
Taxable..................... 12,382 20,679 24,356 28,571 37,592 43,089
International............... 831 1,420 1,168 3,616 6,339 9,015
------- ------- ------- ------- ------- -------
Total....................... $17,657 $29,601 $37,592 $51,043 $69,112 $83,001
======= ======= ======= ======= ======= =======
</TABLE>

Tax-exempt. Our tax-exempt clients consist primarily of defined
benefit and defined contribution pension plans. As of June 30,
1999, 133 pension plans maintained $29 billion in separate
accounts with us. During 1998, assets managed for tax-exempt
investors increased by over $6 billion, or 34%. Our growth in
pension assets last year resulted in our being ranked as the
10th fastest growing pension asset manager across all products
and the 7th fastest growing among active domestic fixed income
advisers. Although the market for investment management services
in this channel remains highly fragmented, industry data
suggests that tax-exempt investors are increasingly
consolidating their manager universes, resulting in above
average growth for the largest and best performing managers. We
have been benefiting from this trend and we believe that we can
further develop this distribution channel with direct calling
and cross-selling efforts, as well as by introducing new
products and capabilities over time that enable us to meet the
needs of a broader universe of tax-exempt investors.

Taxable. Our taxable clients include insurance companies,
corporations, banks, third party mutual fund sponsors and other
financial services companies. As of June 30, 1999, we managed
$43 billion in assets for taxable clients. During 1998, separate
account assets managed for taxable clients increased by over $9
billion, or 32%. We are one of the largest independent managers
of insurance company assets with more than $28 billion under
management as of June 30, 1999. We offer a comprehensive range
of services to our insurance clients, many of which seek to
outsource some or all of their investment functions and retain
us to manage multiple portfolios, to serve as a manager of
managers and to deliver consolidated risk management reports
through password-protected sites on the World Wide Web.
Liquidity, short term and other portfolios are managed for a
variety of other taxable investors seeking to maximize income
relative to their funding costs. In addition, BlackRock manages
mutual funds for third party sponsors who wish to obtain
investment management services, while retaining marketing and
distribution consistent with their internal branding strategies.

International. Our international clients include mutual fund
sponsors, insurance companies, banks, corporations and
supranationals located in 16 countries. We have been active in
these markets since BFM was formed and, as of June 30, 1999, we
managed over $9.0 billion of assets on behalf of international
clients. Products include separate accounts and offshore funds
for both institutional and retail investors. In 1998, we raised
more than $1 billion of new assets in Japan through three
investment trusts created with Nomura Asset Management Co., Ltd.
(NAM), the largest money manager in Japan. Since year-end, we
have entered into a formal relationship with NAM by establishing
Nomura BlackRock Asset Management Co., Ltd., a joint venture
that will initially focus on offering BlackRock's fixed income
products in the Japanese institutional and investment trust
markets. To further promote our international business, we will
consider establishing additional strategic affiliations and
foreign business development offices in the future.

. Mutual Funds. We have increased mutual fund assets under
management from $35 billion at year-end 1994 to $59 billion at
June 30, 1999, which represents compound annual growth

41
<PAGE>

of more than 12%. Approximately $47 billion, or nearly 80%, of our
mutual fund assets are managed in our two open-end fund families,
BlackRock Funds and Provident Institutional Funds. We also manage
21 publicly-traded closed-end funds and several short-term
investment funds ("STIFs"). Our funds group is responsible for
wholesaling to PNC, third party broker-dealers and other
intermediaries. The funds group also conducts direct calling
efforts for our institutional funds and develops and implements
marketing, product management, branding and media relations
strategies designed to enhance client service and distribution
across all channels.

Mutual Fund Assets

<TABLE>
<CAPTION>
At December 31, At June 30,
--------------------------------------- -----------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
($ in millions)
BlackRock Funds........... $10,038 $13,670 $17,846 $22,129 $24,231 $25,255
Provident Institutional
Funds.................... 16,421 15,496 16,230 20,278 25,368 21,578
Closed-end funds.......... 7,080 7,953 7,881 8,114 7,756 7,507
STIFs..................... 1,495 2,339 3,165 3,849 4,175 4,460
------- ------- ------- ------- ------- -------
Total..................... $35,034 $39,458 $45,122 $54,370 $61,530 $58,800
======= ======= ======= ======= ======= =======
</TABLE>

BlackRock Funds. The BlackRock Funds family consists of 36
portfolios, including 13 equity, 15 fixed income and eight
liquidity funds. In May 1998, PNC converted $8.2 billion of PNC
common trust funds into the BlackRock Funds. For comparative
purposes in the table above, assets in the BlackRock Funds have
been restated to include the PNC common trust fund assets as if
such assets were part of the BlackRock Funds. Prior to 1996,
assets were gathered almost exclusively through PNC channels and
by acquisition. In addition to working closely with the PNC
channels, we have pursued marketing opportunities with third
party intermediaries by building a staff of 26 wholesalers and
securing more than 200 broker agreements. Through these efforts,
we have established BlackRock Funds as the 14th largest
wholesale fund family in the United States. We intend to
continue to pursue distribution within both PNC and wholesale
channels. We also plan to pursue opportunities with fund
supermarkets, financial planners and other distributors to
expand market penetration in the future.

Provident Institutional Funds. Provident Institutional Funds is
our institutional money market fund family and consists of 11
prime, government and tax-exempt funds. As mentioned earlier,
money market assets are subject to substantial volatility. We
market these funds through the direct calling efforts of a
dedicated sales force consisting of 12 regional salespeople. A
limited number of additional professionals are responsible for
wholesaling Provident Institutional Funds through the PNC
channels. In addition, we develop and deliver software,
including cash sweep and Web-based order entry capabilities,
that enhance clients' ability to efficiently invest in Provident
Institutional Funds. Our marketing strategies have focused on
diversifying our client base in light of consolidation and
internalization trends in the banking industry. We will continue
to closely observe industry trends and develop marketing
strategies to further diversify our client base.

Closed-end funds. Closed-end funds represent approximately 13%
of our mutual fund assets, with $8 billion managed at June 30,
1999 in 21 funds listed on the New York or American stock
exchanges. All of these funds are fixed income products,
including 13 target term trusts, a product that we introduced to
the industry in 1988. When the BlackRock 1998 Term Trust matured
at the end of last year at $10.02 per share, we became the first
and only term trust manager to meet or exceed the fund's
targeted

42
<PAGE>

terminal value. Unlike open-end funds, closed-end funds are
generally underwritten and sold exclusively through broker-
dealers. Although we maintain very close relationships with
brokerage firms, access to distribution is highly competitive
and increasingly expensive. In 1998, we raised $95 million in
the BlackRock High Yield Trust (NYSE: BHY), our first public
closed-end fund offering since 1993. We will continue to create
and offer closed-end funds as market opportunities permit.

STIFs. Short-term investment funds are also offered to
institutional clients through PNC. At June 30, 1999, we managed
over $4 billion of assets in several STIFs, which are structured
as open-end commingled investment trusts, rather than as
registered mutual funds.

Risk Management Products

Since the formation of BFM in 1988, we have made substantial investments
in developing sophisticated, risk management and analytic software. Today, the
risk management staff represents more than 25% of our total employees.
Professionals include quantitative and credit analysts, financial model and
software developers, and management information systems and technology
personnel. These professionals support our investment process, client service
efforts, computing environment and the growing number of clients who separately
purchase our risk management services.

Our investment technology has evolved over the years into a comprehensive
information processing capability fully integrated with sophisticated analytics
that support risk assessment and investment decision-making. We believe that
our combination of integrated front-to-back office automation and professional
expertise resulted in an increasing number of requests for our technology
products by large institutional clients. As a result, in 1995, we began
offering high value-added risk management systems and advisory services
separate from our asset management products. As of June 30, 1999, we provided
these services to 13 clients, including three relationships that we added in
the first six months of 1999. In total, we provide analyses with respect to
more than $500 billion of assets managed by these clients.

. Analytics Service Bureau. We offer daily, weekly or monthly
production of risk management reports to a variety of clients,
including insurance companies, banks and pension plans. Portfolio
transactions executed by the client's investment staff or other
asset managers on the client's behalf are transmitted to us. Asset
and liability positions are modeled and risk parameters are
measured for each position, for the corresponding portfolio and/or
for the balance sheet as a whole. We then generate risk management
reports and provide them through password-protected sites on the
Internet or through dedicated lines to the client's in-house
systems. Service bureau contracts are typically multi-year
arrangements in which we are paid a set-up fee at the outset and
an ongoing service fee based on the number of positions processed.

. Advisory Services. We also offer a range of advisory services in
conjunction with risk management reporting to enhance clients'
development of a variety of asset/liability management strategies.
Over time, these services have included asset disposition,
portfolio restructuring and hedging advice provided to service
bureau clients, broker-dealers, REITs and mortgage banks. Our
senior risk management professionals provide a highly customized
consulting service, working closely with clients to evaluate their
risk positions relative to their liabilities, market conditions
and regulatory, accounting and tax considerations. Hedging and
other risk management strategies are jointly developed for
implementation by the client or, at the client's direction, by us.
Assignments can be project-oriented or ongoing in nature, and
contracts provide fixed advisory fees and, occasionally,
performance fees based on the client's determination of overall
value-added.

43
<PAGE>

. Trading Systems Services. In 1998, we entered into our first
contract to provide trading system outsourcing. BlackRock's system
was chosen following a search by a large institutional client that
included well-established industry competitors, evidencing our
strong capabilities in investment technology. A long lead-time was
necessary to complete hardware upgrades, further software
development and user documentation. The multi-year contract
provides set-up fees, annual service fees and consulting fees for
client-specified customization. Revenues, particularly in the
early years, will be substantially reinvested in order to satisfy
our obligations under the contract and to build our ability to
provide this service more efficiently in the future. We have
chosen to limit marketing of this product until this first
installation has been made and tested, but potential clients
include banks, insurance companies, brokerage firms and other
substantial fixed income investors.

We view these risk management activities as a start-up technology service
venture. By first establishing an analytics service bureau and providing risk
management advisory services, we have been able to attract or expand
relationships with a variety of sophisticated institutional investors, many of
which are leaders in their industries. At the same time, we are building the
capability to provide trading system outsourcing or to license our trading
system to others, which should provide substantially greater scale in the risk
management business over time.

Facilities

BlackRock's principal executive offices are located at 345 Park Avenue,
New York, New York 10154, where it occupies approximately 65,000 square feet of
space under various leases expiring through 2005. BlackRock also has office
space at 1600 Market Street, Philadelphia, Pennsylvania 19103 and 400 Bellevue
Parkway, Wilmington, Delaware 19805 where it occupies a total of approximately
46,500 square feet of space under a lease arrangement with PNC. See "Certain
Relationships and Related Transactions" and Note 7 of "Notes to BlackRock's
Consolidated Financial Statements."

Competition

BlackRock competes with investment management firms, mutual fund
complexes, insurance companies, banks, brokerage firms and other financial
institutions that offer products that are similar to, or alternatives to, those
offered by BlackRock. In order to grow our business, BlackRock must be able to
compete effectively for assets under management. Key competitive factors
include investment performance track records, investment style and discipline,
quality of client service and brand name recognition. We have historically
competed principally on the basis of our long-term investment performance track
record, our investment process, our risk management and analytic capabilities
and our approach to client service. Over the past five years, we have succeeded
in growing aggregate assets under management, and we believe that we will
continue to be able to do so by maintaining strong investment performance and
client service, building longer-term track records in our equity products, and
developing new products and new distribution capabilities. Many of our
competitors, however, have greater financial or marketing resources and better
brand name recognition than BlackRock. These factors and others identified
elsewhere in this prospectus may place BlackRock at a competitive disadvantage,
and there can be no assurance that our strategies and efforts to maintain our
existing assets and attract new business will be successful.

Employees

At June 30, 1999, BlackRock had 551 full-time employees, including 95
professionals in the portfolio management group, 154 professionals in risk
management and analytics, 108 professionals in the separate account and funds
marketing and client service areas and 90 professionals in administrative and
support departments.

44
<PAGE>

Legal Proceedings

On or about August 30, 1999, a purported shareholder of the BlackRock New
York Term Trust commenced a purported class action lawsuit in the United States
District Court for the Southern District of New York against BFM, certain of
its officers and directors, and certain of the municipal term trusts managed by
BFM. The complaint alleges violations of the Investment Advisers Act of 1940,
Sections 20(a), 36(b) and 48(a) of the Investment Company Act of 1940, as well
as breaches of fiduciary duty and contract in connection with the proposed
mergers of the defendant municipal term trusts into certain municipal perpetual
funds also managed by BFM. The complaint seeks, among other things, unspecified
damages and equitable relief enjoining consummation of the mergers. Although
the lawsuit is in its preliminary stages and, accordingly, the ultimate outcome
cannot be predicted at this time, BlackRock presently believes that this
lawsuit will not have a material adverse effect on BlackRock's consolidated
financial position or results of operations.

In September 1999, BlackRock was notified by the civil division of the
United States Attorney's Office for the District of Columbia that BlackRock
Capital Finance, L.P., has been named as a defendant, along with other
unidentified entities, in a civil lawsuit brought by a private party pursuant
to the federal False Claims Act. Under the False Claims Act, the existence of
the lawsuit, the identities of the parties and the complaint filed by the
private party remain under seal for the 60-day period in which the U.S.
Department of Justice may elect to intervene and assume primary responsibility
for litigating the case. At this time, according to the U.S. Attorney's Office,
the Department of Justice has not determined whether to intervene in this case.
According to the U.S. Attorney's Office, the complaint alleges that BlackRock
Capital Finance entered into a financial advisory subcontract with an advisor
to the U.S. Department of Housing and Urban Development in connection with its
auctioning of notes. The complaint alleges that approximately $4.7 billion of
government-owned notes were improperly directed to BlackRock Capital Finance
and its various bidding partners for prices that were below those which could
have been obtained for the notes in a full and fair competition. The complaint
further alleges that BlackRock Capital Finance was given inside information
relating to certain of the note sales in which BlackRock Capital Finance was
bidding. As a result of this alleged scheme, BlackRock Capital Finance and its
bidding partners purportedly were awarded 62% of the loans purchased and 96% of
the $1.98 billion in non-performing single family notes sold in the auctions.
The complaint does not state a monetary amount of damages. Under the False
Claims Act, any damage award could be trebled. Although BlackRock has not had
access to the complaint, which is under seal, and cannot predict with certainty
the ultimate outcome of the litigation at this time, BlackRock believes that
the allegations, as summarized by the U.S. Attorney's Office, are without
merit.

From time to time, we may be a defendant in various other lawsuits
incidental to our business. We do not believe the outcome of any such
litigation currently pending will have a material adverse effect on BlackRock's
financial condition or results of operations.

Regulation

Virtually all aspects of BlackRock's business are subject to various
federal and state laws and regulations. These laws and regulations are
primarily intended to protect investment advisory clients, stockholders of
registered investment companies, PNC's bank subsidiaries and bank customers of
PNC Bank. Under these laws and regulations, agencies that regulate investment
advisers and bank subsidiaries such as BlackRock and its subsidiaries have
broad administrative powers, including the power to limit, restrict or prohibit
it from carrying on business if it fails to comply with such laws and
regulations. Possible sanctions for significant compliance failures include the
suspension of individual employees, limitations on engaging in certain lines of
business for specified periods of time, revocation of investment adviser and
other registrations, censures and fines.

45
<PAGE>

BlackRock's subsidiaries are subject to regulation, primarily at the
federal level, by the SEC, the Department of Labor, the OCC, the Federal
Reserve, the Commodity Futures Trading Commission and other regulatory bodies.

The Investment Advisers Act imposes numerous obligations on registered
investment advisers, including record keeping requirements, operational
requirements, marketing requirements, disclosure obligations and prohibitions
on fraudulent activities. The Investment Company Act imposes similar
obligations, as well as detailed operational requirements, on investment
advisers to registered investment companies and other managed accounts. The SEC
is authorized to institute proceedings and impose sanctions for violations of
the Investment Advisers Act and the Investment Company Act, ranging from fine
and censure to termination of an investment adviser's registration.

BlackRock derives a substantial majority of its revenues from investment
advisory services through its investment management agreements. Under the
Investment Advisers Act, BlackRock's investment management agreements may not
be assigned without the client's consent. Under the Investment Company Act,
advisory agreements with registered investment companies terminate
automatically upon assignment. The term "assignment" is broadly defined and may
include direct assignments as well as assignments that may be deemed to occur
upon the transfer, directly or indirectly, of a controlling interest in
BlackRock or any of its parent companies. The offerings will not constitute an
assignment for these purposes. Accordingly, BlackRock does not intend to seek
client consents or approvals of new investment advisory agreements in
connection with these transactions.

BlackRock's subsidiaries are subject to ERISA and to regulations
promulgated thereunder, insofar as they act as a "fiduciary" under ERISA with
respect to benefit plan clients. ERISA and applicable provisions of the
Internal Revenue Code impose certain duties on persons who are fiduciaries
under ERISA, prohibit certain transactions involving ERISA plan clients and
provide monetary penalties for violations of these prohibitions. One of
BlackRock's subsidiaries is registered as a commodity pool operator and
commodity trading adviser with the CFTC and the National Futures Association.
The CFTC and NFA administer a comparable regulatory system covering futures
contracts and various other financial instruments in which BlackRock clients
may invest. Another subsidiary is registered with the SEC as a broker-dealer
and is a member of the National Association of Securities Dealers. Although
this entity's NASD membership agreement limits its permitted activities to the
sale of investment company securities and annuities and certain private
placement and financial consulting activities, it is subject to the customer
dealing, reporting and other requirements of the NASD as well as the net
capital and other requirements of the SEC.

PNC is a bank holding company regulated by the Federal Reserve under the
Bank Holding Company Act. PNC Bank, the indirect parent of BlackRock, is a
national bank subsidiary of PNC. As the subsidiary of PNC Bank, a national
bank, BlackRock is subject to most banking laws, regulations, and orders that
are applicable to PNC Bank, and therefore to the supervision, regulation, and
examination of the OCC. The OCC and the FDIC also have broad enforcement
authority over PNC Bank and its subsidiaries, including the power to prohibit
PNC or any subsidiary from engaging in any activity that, in the OCC's opinion,
constitutes an unsafe or unsound practice in conducting its business, to
terminate deposit insurance, to appoint the FDIC as conservator or receiver of
PNC Bank if any of a number of conditions are met, and to impose substantial
fines and other penalties. Supervision and regulation of PNC and its
subsidiaries is intended primarily for the protection of depositors, the
deposit insurance funds of the FDIC, and the banking system as a whole, not for
the protection of stockholders or creditors of national banks or their
subsidiaries. The Federal Reserve has regulatory and supervisory authority with
respect to PNC's non-U.S. activities and investments as well as with respect to
its non-bank subsidiaries; the OCC, the FDIC, and the Office of Thrift
Supervision have regulatory and supervisory authority with respect to PNC's
bank and thrift subsidiaries and subsidiaries of such banks and thrifts.

Because BlackRock is a consolidated subsidiary of PNC Bank, federal
restrictions on payments of dividends by PNC Bank might be applied to
BlackRock. Under federal law, OCC approval is needed before PNC Bank may pay
dividends in any year in which the total of all dividends paid would exceed the
total of

46
<PAGE>

PNC Bank's net profits for that year combined with its retained net profits
from the prior two years. PNC Bank also may not pay dividends exceeding its
capital surplus.

As a subsidiary of a national bank, BlackRock may not conduct new
activities, establish a subsidiary, or acquire the stock or assets of another
company unless it first obtains the written approval of the OCC and, with
respect to most non-U.S. activities or investments, the Federal Reserve. The
OCC will only approve activities and investments that are legally permissible
for a national bank, and consistent with prudent banking principles and
regulatory policy. The Federal Reserve will approve only those activities that
are usual in connection with the transaction of the business of banking or
other financial operations outside of the United States. BlackRock is not
permitted to act as a distributor of any fund, the shares of which are offered
more often than four times a year or to control any open-end fund or any
closed-end fund that invests in assets of a type or quantity not permitted to
be held by a bank holding company. Investment management firms with which
BlackRock competes commonly invest in investment companies and private
investment funds to which they provide services. BlackRock may invest in
investment companies and private investment funds to which it provides
advisory, administrative or other services, to the extent consistent with
applicable law and regulatory interpretations, including applicable banking
laws. BlackRock's current domestic and overseas activities are permissible for
a national bank.

Under federal law, PNC Bank and its subsidiaries, including BlackRock,
generally may not engage in transactions with PNC or its non-bank subsidiaries,
except on terms and under circumstances that are substantially the same as
those prevailing for comparable transactions involving nonaffiliated companies,
or, in the absence of comparable transactions, that in good faith would be
offered to or would apply to nonaffiliated companies. In addition, certain
transactions, including loans and other extensions of credit, guarantees,
investments, and asset purchases between PNC Bank and its subsidiaries,
including BlackRock, on the one hand, and PNC and its nonbank subsidiaries on
the other hand, are limited to 10% of PNC Bank's capital and loan loss reserve
allowance for transactions with a single company and to 20% of PNC Bank's
capital and loan loss reserve allowance for aggregate transactions with PNC and
all of its nonbank subsidiaries and other affiliates. In certain circumstances,
federal regulatory authorities may impose more restrictive limitations. Such
extensions of credit, with limited exceptions, must be fully collateralized.

The FDIC could be appointed as conservator or receiver of PNC Bank if the
bank were to become insolvent or if other conditions or events were to occur.
As conservator or receiver, the FDIC could exercise all rights of PNC Bank as
stockholder of BlackRock. The FDIC would also have the authority to repudiate
contracts by PNC Bank, including servicing or other contracts with BlackRock,
at any time within 180 days of its appointment as conservator or receiver, and
would be obligated to pay BlackRock only "actual direct compensatory damages,"
not including damages for lost profits or opportunity, as of the date of
conservatorship or receivership as a result of such repudiation. The FDIC could
also disregard, without paying damages, any contract that tended to diminish or
defeat the FDIC's interest in any PNC Bank asset if the contract were not:

. in writing;

. executed by PNC Bank and BlackRock contemporaneously with the
acquisition of the asset by PNC Bank;

. approved by the board of directors of PNC Bank or its loan
committee with the approval reflected in the minutes of the board
or committee; and

. continuously, from the time of its execution, an official record
of PNC Bank.

In addition, the FDIC could obtain a stay of up to 90 days of any
judicial action or proceeding involving PNC Bank, and could require BlackRock
to exhaust its remedies under FDIC claims procedures before pursuing any
available judicial remedy.

47
<PAGE>

PNC's bank and thrift subsidiaries are subject to "cross-guarantee"
provisions under federal law that provide if one of these banks or thrifts
fails or requires FDIC assistance, the FDIC may assess a "commonly controlled"
bank or thrift, such as PNC Bank, for the estimated losses suffered by the
FDIC. The FDIC's claim is superior to the claims of affiliates, such as
BlackRock, and of stockholders of the banks. At December 31, 1998, all of PNC's
bank and thrift subsidiaries exceeded the required ratios for classification as
"well capitalized" under statutory and regulatory standards.

BlackRock's international operations are subject to the laws of non-U.S.
jurisdictions and non-U.S. regulatory agencies or bodies. As BlackRock expands
its international business its internal operations may become subject to
requirements in numerous jurisdictions regarding reporting of beneficial
ownership positions in securities issued by companies whose securities are
publicly traded in those countries. BlackRock's subsidiaries are subject to
periodic examination by these regulatory agencies. BlackRock's international
subsidiaries have developed comprehensive compliance systems in order to
satisfy applicable regulatory requirements. The failure of BlackRock's internal
operations to comply with the applicable regulatory frameworks could have a
material adverse effect on BlackRock.

PNC currently holds its ownership interest in BlackRock through a
subsidiary of PNC Bank. As such, BlackRock currently is not subject to
regulation under the nonbanking provisions of the Bank Holding Company Act. If
PNC were to hold its ownership interest in BlackRock at the holding company
level as a nonbank subsidiary, BlackRock would no longer be subject to OCC
supervision and regulation, but would instead become subject to Federal Reserve
supervision and regulation as a nonbank subsidiary of a bank holding company.

48
<PAGE>

MANAGEMENT

Directors and Executive Officers of BlackRock

The following table sets forth certain information concerning the
directors and executive officers of BlackRock. Our board currently has six
members. Four of our directors, Thomas H. O'Brien, James E. Rohr, Walter E.
Gregg, Jr., and Helen P. Pudlin are currently executive officers and/or
directors of PNC and various PNC subsidiaries. We expect to add four board
members in the several months following the offerings, all of whom will be
independent. The ages listed below are as of January 1, 1999.

Our board will be divided into three classes (I, II, and III) serving
staggered terms. After an initial transition period following the offerings,
directors in each class will be elected to serve for three-year terms and will
serve until their successors are elected and qualified. Each year, the
directors of one class will stand for election as their terms of office expire.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Laurence D. Fink........ 46 Director, Chairman and Chief Executive Officer
Ralph L. Schlosstein.... 47 Director and President
Thomas H. O'Brien....... 61 Director
James E. Rohr........... 50 Director
Walter E. Gregg, Jr..... 57 Director
Helen P. Pudlin......... 49 Director
Robert S. Kapito........ 41 Vice Chairman
Paul L. Audet........... 45 Managing Director and Chief Financial Officer
Robert P. Connolly...... 44 Managing Director and General Counsel
</TABLE>

Laurence D. Fink, director, chairman and chief executive officer of
BlackRock, is chairman of the management committee and co-chair of the
investment strategy group. He is also chairman of the board of BlackRock's
family of closed-end mutual funds, a director of BlackRock's offshore funds and
alternative investment vehicles, and chairman of the board of Nomura BlackRock
Asset Management Co., Ltd. Mr. Fink serves on the asset liability committee of
PNC Bank. Prior to founding BFM in 1988, Mr. Fink was a managing director and
member of the management committee of The First Boston Corporation.

Ralph L. Schlosstein, director and president of BlackRock, is a member of
the management committee and the investment strategy group. Mr. Schlosstein is
president and a director of BlackRock's family of closed-end mutual funds and a
director and officer of BlackRock's alternative investment vehicles. Prior to
founding BFM in 1988, Mr. Schlosstein was a managing director of Lehman
Brothers Inc. Mr. Schlosstein is a director of Pulte Corporation.

Thomas H. O'Brien, director, is chairman and chief executive officer of
PNC and PNC Bank and a member of PNC's Office of the Chairman. Mr. O'Brien was
appointed to the board of directors and elected vice chairman of PNC in 1983,
president and chief executive officer in 1985, and chairman in June 1988. Prior
to his election as president and chief executive officer in 1985, he was
chairman and chief executive officer of Pittsburgh National Bank (predecessor
of PNC Bank). He joined Pittsburgh National Bank in 1962, was elected vice
president in 1967, senior vice president in 1973, executive vice president in
1980, vice chairman of PNC Bank in 1983, and chairman of PNC Bank in 1993. Mr.
O'Brien is a director of Bell Atlantic Corp., US Airways Inc., and Hilb, Rogal
& Hamilton Co.

49
<PAGE>

James E. Rohr, director, is president and chief operating officer of PNC
and PNC Bank and a member of PNC's Office of the Chairman. Mr. Rohr joined PNC
through its Management Development Program in 1972. In 1990, Mr. Rohr was
elected chairman and chief executive officer of Pittsburgh National Bank. He
was elected a vice chairman of PNC in 1989, named a director in 1990, elected
president in 1992 and named chief operating officer in 1998. Mr. Rohr is a
director of Allegheny Teledyne Incorporated and Equitable Resources, Inc.

Walter E. Gregg, Jr., director, is vice chairman of PNC and a member of
PNC's Office of the Chairman. He also is a director of PFPC Worldwide, PNC's
mutual fund servicing arm. Mr. Gregg joined Pittsburgh National Bank in 1974 as
resident attorney. He was elected senior vice president, treasurer and chief
counsel-regulatory reporting/acquisitions in 1983, executive vice president-
finance and administration for PNC in 1989, senior executive vice president in
1997, a director in 1998 and vice chairman in 1999.

Helen P. Pudlin, director, is senior vice president and general counsel
of PNC and PNC Bank. Ms. Pudlin joined PNC in 1989 as general counsel of
Provident National Bank (predecessor of PNC Bank) from the law firm of Ballard,
Spahr, Andrews & Ingersoll in Philadelphia, where she was a partner. She was
elected senior vice president and deputy general counsel for PNC in 1992,
became a managing general counsel in 1993, was named senior vice president and
general counsel of PNC later in 1993, and became senior vice president and
general counsel of PNC Bank in 1998.

Robert S. Kapito, vice chairman, is head of the portfolio management
group, co-head of the equity operating committee, a member of the investment
strategy group and a member of the management committee. Mr. Kapito serves as a
vice president of BlackRock's family of closed-end mutual funds and of the
Smith Barney Adjustable Rate Government Income Fund. Prior to founding BFM in
1988, Mr. Kapito was a vice president in the mortgage products group at The
First Boston Corporation.

Paul L. Audet, managing director, is chief financial officer and a member
of the management committee and co-head of the infrastructure operating
committee. Prior to joining BlackRock in 1998, Mr. Audet was a senior vice
president at PNC, responsible for mergers and acquisitions and for finance at
PNC Asset Management Group, Inc. He joined PNC in 1991 as chief financial
officer of PNC's eastern operations, which included Provident National Bank in
Philadelphia and PFPC Worldwide in Wilmington, Delaware.

Robert P. Connolly, managing director, is general counsel of BlackRock
and a member of the management committee. Mr. Connolly is responsible for all
legal affairs of BlackRock. Prior to joining PNC Asset Management Group, Inc.
in 1997, Mr. Connolly was managing director and general counsel of New England
Funds, L.P. beginning in April 1995. From March 1993 through April 1995, Mr.
Connolly was managing director and general counsel of Kroll Associates, Inc.,
and prior to March 1993, he was managing director and general counsel of
Equitable Capital Management Corporation.

Committees of the Board of Directors

BlackRock has established an audit committee and a compensation
committee. An executive committee, investment committee and a nominating
committee will be established after the offerings. As additional persons join
our board in connection with and following the offerings, we expect that
membership on some of these committees will be modified and that we will
appoint other members to some of these committees. Our bylaws provide that, so
long as PNC owns a majority of the voting power of our outstanding common
stock, the majority of the members of each committee will be directors who are
also directors and/or officers of PNC to the extent permitted by applicable law
or stock exchange policy.

The executive committee will be authorized to exercise, between meetings
of our board, all of the powers and authority of the board in the direction and
management of BlackRock, except as prohibited by applicable law and except to
the extent another committee has been accorded authority over the matter. The

50
<PAGE>

audit committee will recommend the annual appointment of BlackRock's auditors,
with whom the audit committee will review the scope of audit and non-audit
assignments and related fees, accounting principles used by BlackRock in
financial reporting, internal auditing procedures and the adequacy of
BlackRock's risk management, compliance and internal control procedures. The
compensation committee will administer BlackRock's stock award and incentive
plans and will establish the compensation for BlackRock's executive officers.
The investment committee will review and make recommendations to the board of
directors regarding investments by BlackRock, including investments in our
alternative investment products. The nominating committee will review the
qualifications of potential candidates for the board of directors, report its
findings to the board of directors and propose nominations for board
memberships for approval by the board of directors and submission to the
stockholders of BlackRock for elections. Our board may alter the duties of
these committees and may establish other committees from time to time to
facilitate the management of the business and affairs of BlackRock.

Compensation of Directors

Directors who are also employees of BlackRock or PNC will receive no
compensation for serving as directors or committee members. Non-employee
directors will receive total compensation of $50,000 per year, and may elect to
receive common stock in lieu of all or a portion of this compensation. See
"Executive Compensation--Non-employee Directors Stock Compensation Plan."

Key Employees

The following table sets forth certain information concerning key
employees of BlackRock. The ages listed below are as of January 1, 1999.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Keith T. Anderson................................. 39 Managing Director
Rosemarie F. Bruno................................ 39 Managing Director
Daniel B. Eagan................................... 36 Managing Director
Hugh R. Frater.................................... 43 Managing Director
Henry Gabbay...................................... 51 Managing Director
Bennett W. Golub.................................. 41 Managing Director
Charles S. Hallac................................. 34 Managing Director
Barbara G. Novick................................. 38 Managing Director
Karen H. Sabath................................... 33 Managing Director
Susan L. Wagner................................... 37 Managing Director
William J. Wykle.................................. 61 Managing Director
</TABLE>

Keith T. Anderson, managing director, is chief investment officer, fixed
income and co-chair of the investment strategy group, as well as co-head of the
fixed income operating committee and a member of BlackRock's management
committee. Mr. Anderson also serves as a vice president of BlackRock's family
of closed-end mutual funds. Prior to founding BFM in 1988, Mr. Anderson was a
vice president in fixed income research at The First Boston Corporation.

Rosemarie F. Bruno, managing director, is director of human resources and
a member of the management committee. Ms. Bruno is responsible for the firm's
human resources strategy, programs and policies. Prior to joining BlackRock in
1998, Ms. Bruno was the New York Metro Region Human Resources Director for
Kwasha HR Solutions of PricewaterhouseCoopers.

Daniel B. Eagan, managing director, is a senior portfolio manager,
equities, a member of the equity operating committee and a member of the
management committee. His primary responsibility is as lead manager for large-
cap value and enhanced core equity portfolios. He is also the co-manager for
small-cap value products. Before joining PNC Asset Management Group in 1994,
Mr. Eagan was a senior research consultant for William M. Mercer Asset
Planning, Inc.

51
<PAGE>

Hugh R. Frater, managing director, is president and director of
Anthracite Capital, Inc., head of the real estate operating committee and a
member of the management committee. Anthracite Capital, Inc. is a REIT that was
created by BlackRock in 1998. Prior to forming the REIT, Mr. Frater co-headed
BlackRock's account management group. Before joining BFM in 1988, Mr. Frater
was a vice president in investment banking at Lehman Brothers Inc.

Henry Gabbay, Ph.D., managing director, is the head of the fund
administration and operations group and is a member of the management
committee. Dr. Gabbay also serves as treasurer for BlackRock's family of
closed-end mutual funds. Prior to joining BFM in 1989, Dr. Gabbay was a vice
president in the finance department at The First Boston Corporation.

Bennett W. Golub, Ph.D., managing director, is co-head of the risk
management and analytics group, a member of the investment strategy group and
the credit committee, and a member of the management committee. Prior to
founding BFM in 1988, Dr. Golub was a vice president at The First Boston
Corporation.

Charles S. Hallac, managing director, is co-head of the risk management
and analytics group, a member of the investment strategy group and a member of
the management committee. Prior to joining BFM in 1988, Mr. Hallac was an
associate in the mortgage products group at The First Boston Corporation.

Barbara G. Novick, managing director, is head of the account management
group, co-head of the fixed income and equity operating committees and a member
of the management committee. Prior to founding BFM in 1988, Ms Novick was a
vice president in the mortgage products group at The First Boston Corporation.

Karen H. Sabath, managing director, is head of the funds group and the
funds operating committee and a member of BlackRock's management committee. Ms.
Sabath also serves as the secretary for BlackRock's family of closed-end mutual
funds. Prior to joining BFM in 1988, Ms. Sabath was an associate in the
mortgage products group at The First Boston Corporation.

Susan L. Wagner, managing director, is head of the strategy and product
development group, co-head of the infrastructure operating committee and a
member of the management committee. Ms. Wagner serves as a director of
BlackRock's offshore funds and an officer of BlackRock's alternative investment
vehicles. Prior to founding BFM in 1988, Ms. Wagner was a vice president in the
mortgage and savings institutions group at Lehman Brothers Inc.

William J. Wykle, managing director, is a senior portfolio manager,
equities, a member of the equity operating committee and a member of the
management committee. His primary responsibility is lead manager on the mid-
small- and micro-cap growth products, for which he oversees the investment
management and research process. Before joining PNC Asset Management Group in
1986, Mr. Wykle was a senior vice president and chief investment officer at One
Valley Bancorp of West Virginia.

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<PAGE>

EXECUTIVE COMPENSATION

Summary of Compensation

The following summary compensation table sets forth information
concerning compensation earned in the fiscal year ended December 31, 1998, by
BlackRock's chief executive officer and its other four most highly compensated
executive officers (the "named executive officers").

Summary Compensation Table--1998

<TABLE>
<CAPTION>
Annual Compensation
--------------------------------------
Other
Name and Annual All Other
Principal Position Salary Bonus Compensation Compensation
------------------ -------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Laurence D. Fink......... $300,000 $5,641,855 $ -- $281,217(1)
Chairman and Chief
Executive Officer
Ralph L. Schlosstein..... $225,000 $3,435,163 $ -- $178,276(2)
President
Robert S. Kapito......... $150,000 $4,586,736 $ -- $163,068(3)
Vice Chairman
Paul L. Audet............ $257,692(4) $ 300,000(5) $1,260(6) $ 43,285(7)
Chief Financial Officer
Robert P. Connolly....... $250,000(8) $ 210,000 $ -- $ 40,338(9)
General Counsel
</TABLE>
- --------
(1) Includes $9,600 matching contribution to Incentive Savings Plan, $8,400
contributions to the non-qualified plan, $263,217 for value of discount to
fair market value of purchased stock.
(2) Includes $9,600 matching contribution to Incentive Savings Plan, $3,900
contributions to the non-qualified plan, $164,776 for value of discount to
fair market value of purchased stock.
(3) Includes $9,000 matching contributions to Incentive Savings Plan, $154,068
for value of discount to fair market value of purchased stock.
(4) $40,000 as BlackRock Executive.
(5) $200,000 as BlackRock Executive.
(6) Reimbursement from PNC for certain tax liabilities (club membership).
(7) $6,913 KEEP premium paid by PNC Bank Corp and $36,372 for relocation.
(8) $182,692 as BlackRock Executive.
(9) Includes $5,192 matching contribution to Incentive Savings Plan, $22,812
for relocation and $12,334 for value of discount to fair market value of
purchased stock.

PNC Stock Options

The following table sets forth information concerning the grant of PNC
stock options to each of BlackRock's named executive officers during the last
fiscal year.

PNC Option Grants in Last Fiscal Year

<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------
% of Total
Number of Options Grant
Securities Granted to Date
Underlying PNC Employees Exercise Present
Options in Fiscal or Base Expiration Value
Name Granted(1) Year Price ($/SH) Date ($)(2)
---- ---------- ------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C>
Laurence D. Fink..... 35,000 1.00% $57.8125 5/28/08 $335,000
Ralph L.
Schlosstein......... 25,000 0.72% $57.8125 5/28/08 $239,500
Robert S. Kapito..... 10,000 0.29% $57.8125 5/28/08 $ 95,800
Paul L. Audet........ 15,000 0.43% $54.7188 2/19/08 $134,400
Robert P. Connolly... 7,400 0.21% $54.7188 2/19/08 $ 66,304
</TABLE>
- --------
(1) The options granted to Messrs. Fink, Schlosstein and Kapito have a grant
date of May 28, 1998, and became exercisable on May 28, 1999. The options
granted to Messrs. Audet and Connolly have a grant date of February 19,
1998, and became exercisable on February 19, 1999.

53
<PAGE>

(2) The chart below shows, by option grant date, the assumptions used to
determine the grant date present value per option. BlackRock or PNC Bank in
no way intends to provide any predictions or assurances with respect to
option or common stock values, as some of the underlying assumptions are
highly subjective.

<TABLE>
<CAPTION>
Annualized Dollar
Risk Free Estimated Value
Grant Market Exercise Rate of Useful Dividend Of
Date Price Price Volatility Return Life Yield@ Option
----- ------ -------- ---------- ---------- --------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
2/19/98 $54.72 $54.72 0.198 5.57% 6 Years 4.40% $8.96
5/28/98 $57.81 $57.81 0.199 5.65% 6 Years 4.40% $9.58
</TABLE>

Exercise of PNC Options

The following table sets forth information concerning the exercise of PNC
stock options during the last fiscal year by each of BlackRock's named
executive officers and the fiscal year-end value of unexercised options.

Aggregated Option Exercises in Last Fiscal Year, and Fiscal Year-End Option
Values

<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Value of Unexercised
Acquired on Value Unexercised Options In-the-Money Options
Exercise Realized at FY-End at FY-End
----------- -------- ------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Laurence D. Fink........ -- $ -- 40,000 35,000 $956,250 $ --
Ralph L. Schlosstein.... 30,000 $999,376 -- 25,000 $ -- $ --
Robert S. Kapito ....... -- $ -- 9,400 10,000 $ 96,937 $ --
Paul L. Audet........... -- $ -- 12,700 15,000 $130,968 $ --
Robert P. Connolly...... -- $ -- -- 7,400 $ -- $ --
</TABLE>

PNC Defined Benefit or Actuarial Plan

Mr. Audet and Mr. Connolly are the only BlackRock executive officers who
participate in PNC's pension plan. Mr. Audet and Mr. Connolly would receive
estimated total annual benefits (including those payable by supplemental non-
qualified pension plans) upon retirement at age 65 equal to $320,939 and
$96,772, respectively. The benefits have been projected assuming that (a) Mr.
Audet's and Mr. Connolly's salary remain constant and (b) the 30-year U.S.
Treasury Bond rate until retirement is 7.0%.

Employment Agreements

BlackRock has entered into employment agreements and stock arrangements
with the named executive officers that are designed to retain their services
through compensation and equity arrangements.

BlackRock intends to enter into new employment agreements with the named
executive officers which will become effective when the offerings are
completed. The named executive officers are generally referred to as
"executives." These employment agreements will provide for compensation for
each executive in the form of an annual base salary and an annual bonus in an
amount determined by BlackRock and will provide that BlackRock's management
committee will manage the day-to-day operations of BlackRock. Generally, these
agreements will expire on December 31, 2002.

The employment agreements will provide that the employment of an
executive will terminate upon the death or disability of the executive, and may
be terminated by BlackRock for cause or good reason or by the

54
<PAGE>

executive by reason of a deficient opportunity (as defined below). Other than
Mr. Fink's employment agreement, the employment agreements will provide that
the determination as to whether an executive's termination of employment is for
cause or good reason can only be made by BlackRock's chief executive officer
and a majority of the members of its management committee, other than that
executive. Mr. Fink's employment will provide that such a determination may
only be made by BlackRock's board of directors.

The employment agreements will also provide that, following a change in
control of BlackRock (as defined below under "Certain Relationships and Related
Transactions--IPO Agreement--Change in Control of BlackRock") or a change in
control of PNC (as defined below under "Certain Relationships and Related
Transactions --IPO Agreement--Change in Control of PNC"), an executive will be
entitled to a severance payment equal to either one times or two times the
executive's total compensation upon the termination of the executive's
employment by BlackRock without cause or good reason or by the executive by
reason of a deficient opportunity, subject to the executive's compliance with
the surviving provisions of the employment agreement.

The employment agreements will also provide that, in the event that
BlackRock's management committee ceases to manage the day-to-day operations of
BlackRock without its consent, the restrictions on transferring of BlackRock
shares described under "Description of Capital Stock--Common Stock--
Stockholders Agreement" will lapse on the earlier of (i) the date or dates such
restrictions would otherwise have lapsed or (ii) the first anniversary of the
date on which BlackRock's chief executive officer and its management committee
ceased managing the day-to-day operations of BlackRock.

The employment agreements will also contain various restrictive covenants
applicable to the executive during his employment and upon the termination of
the executive's employment, including provisions relating to non-disparagement,
non-solicitation of clients, non-hiring of employees and non-disclosure of
confidential information and, for some executives, non-competition.

For purposes of some of the employment agreements, "deficient
opportunity" occurs if (i) the executive does not have duties, authority and
reporting responsibilities in BlackRock which are substantially equivalent to
or greater than those as of the beginning of his or her term of employment,
unless otherwise mutually agreed upon, (ii) the executive's principal work
location is relocated beyond a specified geographic area, unless otherwise
mutually agreed upon or at the direction of the chief executive officer or
(iii) there occurs a change in control of BlackRock or a change in control of
PNC and, at the direction of the entity causing such change in control and
without the consent of the chief executive officer, the sum of (1) the
aggregate annual salary and bonus earned by the executive with respect to the
fiscal year in which the change in control occurs or with respect to either of
the two succeeding fiscal years and (2) the value of other incentive awards
granted to the executive in the applicable fiscal year, is less than the sum of
(x) the average annual salary and bonus paid to or earned by the executive with
respect to the two fiscal years immediately preceding the year in which such
change in control occurs and (y) the average value of other incentive awards
granted to the executive in the two fiscal years immediately preceding the year
in which such change in control occurs, unless the reason that the sum of (1)
and (2) is less than the sum of (x) and (y) is because of the adverse financial
performance of BlackRock during the applicable fiscal year.

For other employment agreements, "deficient opportunity" (as described
above) only occurs following a change in control of BlackRock or a change in
control of PNC.

BlackRock, Inc. 1999 Stock Award and Incentive Plan

Prior to the completion of the offerings, the board of directors of
BlackRock will adopt and the stockholders will approve the BlackRock, Inc. 1999
Stock Award and Incentive Plan (the "Award Plan"). A maximum of six percent of
the total shares of common stock outstanding have been reserved for issuance
under the Award Plan. The number of shares authorized is generally subject to
equitable adjustment upon the occurrence of any stock dividend or other
distribution, recapitalization, stock split, reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or share exchange, or
other similar corporate transaction or event.

55
<PAGE>

Pursuant to the Award Plan, BlackRock may grant awards which may consist
of:

. stock options, including incentive stock options and nonqualified
stock options;

. stock appreciation rights, either in connection with stock options
granted under the Award Plan or independently of options;

. restricted stock;

. restricted stock units; and/or

. dividend equivalents and other stock or cash-based awards.

The Award Plan will be administered by the compensation committee
established by the board of directors, and the compensation committee will make
awards in a manner that satisfies Rule 16b-3 under the Exchange Act. The
compensation committee shall have full authority, subject to the provisions of
the Award Plan, to, among other things, determine the persons to whom awards
will be granted, determine the terms and conditions (including any applicable
performance criteria) of the awards, and prescribe, amend and rescind rules and
regulations relating to the Award Plan.

Grants of awards may be made under the Award Plan to selected employees
and independent contractors of BlackRock and its present or future affiliates,
at the discretion of the compensation committee.

Stock options and appreciation rights

Stock options may be either "incentive stock options," as such term is
defined in Section 422 of the Internal Revenue Code, or nonqualified stock
options. The exercise price of a nonqualified stock option may be above, at or
below the fair market value per share of common stock on the date of grant; the
exercise price of an incentive stock option may not be less than the fair
market value per share of common stock on the date of grant. The exercise price
may be paid in cash or by the surrender or withholding of common stock.

Stock appreciation rights may be granted alone or together with stock
options. A stock appreciation right is a right to be paid an amount equal to
the excess of the fair market value of a share of common stock on the date the
stock appreciation right is exercised over either the fair market value of a
share of common stock on the date of grant (in case of a free standing stock
appreciation right) or the exercise price of the related stock option (in case
of a tandem stock appreciation right). Payment can be made in cash, common
stock or both, as specified in the award agreement or as determined by the
compensation committee.

Stock options and stock appreciation rights will be exercisable at such
times and upon such conditions as the compensation committee may determine, as
reflected in the applicable award agreement. The exercise period shall be
determined by the compensation committee except that, in the case of an
incentive stock option, the exercise period shall not exceed ten years from the
date of grant of the incentive stock option.

Except to the extent that the applicable award agreement provides
otherwise, in the event of the termination of employment of an employee or
termination of the independent contractor relationship, the right to exercise
stock options and stock appreciation rights held by such employee or
independent contractor will cease.

56
<PAGE>

Restricted stock and restricted stock units

A restricted stock award is an award of common stock and a restricted
stock unit award is an award of the right to receive cash or common stock at a
future date. In each case, the award is subject to restrictions on
transferability and such other restrictions, if any, as the compensation
committee may impose at the date of grant. The restrictions may lapse
separately or in combination at such times, under such circumstances,
including, without limitation, a specified period of employment or the
satisfaction of pre-established performance goals, in such installments, or
otherwise, as the compensation committee may determine. Except to the extent
restricted under the award agreement relating to the restricted stock, a
participant granted restricted stock will have all of the rights of a
stockholder, including, without limitation, the right to vote and the right to
receive dividends on the restricted stock.

Upon termination of employment or termination of the independent
contractor relationship during the applicable restriction period, shares of
restricted stock, restricted stock units and accrued but unpaid dividends or
dividend equivalents that are subject to restrictions will be forfeited unless
the compensation committee provides otherwise. The compensation committee can
determine that restrictions or forfeiture conditions relating to restricted
stock or restricted stock units will be waived in whole or in part in the event
of terminations resulting from specified causes. The compensation committee may
in other cases waive in whole or in part the forfeiture of restricted stock.

Other awards

The compensation committee may grant to a participant the right to
receive cash or common stock, in each case equal in value to dividends paid
with respect to a specified number of shares of common stock. Dividend
equivalents may be awarded on a free-standing basis or in connection with
another award, and may be paid currently or on a deferred basis. The
compensation committee is also authorized to grant common stock as a bonus or
to grant other cash awards.

Transferability

Except as otherwise determined by the compensation committee, awards
granted under the Award Plan may be transferred only by will or by the laws of
descent and distribution.

Amendment and termination

The Award Plan may be altered, amended, suspended, or terminated by the
board of directors or the compensation committee, in whole or in part, except
that no amendment that requires stockholder approval in order for the Award
Plan to continue to comply with state law, stock exchange requirements or other
applicable law will be effective unless the amendment has received the required
stockholder approval. In addition, no amendment may be made which adversely
affects any of the rights of any award holder previously granted an award,
without the holder's consent.

57
<PAGE>

Outstanding awards

On , 1999, BlackRock granted the following stock options to
the following named executive officers:

<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------
Number of % of Total Grant
Securities Options Date
Underlying Granted to Exercise Present
Options Employees in or Base Expiration Value
Name Granted Fiscal Year Price ($/SH) Date ($)
---- ---------- ------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C>
Laurence D. Fink..... 12,500 1.18% $ $
Ralph L.
Schlosstein......... 12,500 1.18%
Robert S. Kapito..... 12,500 1.18%
Paul L. Audet........ 12,500 1.18%
Robert P. Connolly... 12,500 1.18%
</TABLE>

BlackRock, Inc. 1999 Annual Incentive Performance Plan

Prior to the completion of the offerings, the board of directors of
BlackRock will adopt and the stockholders will approve the BlackRock, Inc. 1999
Annual Incentive Performance Plan ("Annual Incentive Plan").

The purpose of the Annual Incentive Plan is to encourage behavior by
Annual Incentive Plan participants that create superior financial performance
and strengthen the commonality of interests between the participants and
stockholders in creating superior stockholder value.

The Annual Incentive Plan will be administered by the compensation
committee.

The Annual Incentive Plan provides that any employee who is selected by
the compensation committee is eligible to participate in the Annual Incentive
Plan. Payment of awards to participants are permitted if, and only to the
extent that, performance goals established by the compensation committee are
met for the applicable performance period. The performance goals may relate to
the performance of BlackRock, a business unit, product line, territory or any
combination thereof. Performance goals may also include such objective or
subjective performance goals as the compensation committee may, from time to
time, establish. Performance goals may include a threshold level of performance
below which no award payment will be made and levels of performance at which
specified percentages of the target award will be paid, and may also include a
maximum level of performance above which no additional award will be paid. The
performance measure or measures and the performance goals established by the
compensation committee may be different for different performance periods and
different goals may be applicable to different divisions or other operational
segments.

A participant's award with respect to a performance period will be paid
in cash, but only if the participant is employed by BlackRock on the last day
of the applicable performance period. If a participant is terminated by
BlackRock for cause prior to the date on which the payment of awards is made,
the participant will forfeit all claims to unpaid amounts earned or otherwise
due under the Annual Incentive Plan.

The board or the compensation committee may from time to time amend,
suspend or discontinue the Annual Incentive Plan. No amendment, however, shall
affect adversely any of the rights of any participant under any award following
the end of the applicable performance period.

Since benefits under the Incentive Bonus Plan will be determined by the
compensation committee and performance goal criteria may vary from performance
period to performance period and from participant to participant, benefits to
be paid under the Incentive Bonus Plan are not determinable at this time.

58
<PAGE>

Non-employee Directors Stock Compensation Plan

Prior to the completion of the offerings, the board of directors of
BlackRock will adopt and the stockholders will approve the Non employee
Directors Stock Compensation Plan. The purpose of the director plan is to
encourage members of the board of directors who are not also employees of
BlackRock or any of its subsidiaries and who receive fees for their services to
acquire additional stock ownership interests in BlackRock. The following is a
description of the material terms of the director plan, and as such is
qualified in its entirety by the actual terms of the director plan.

Only outside directors are eligible to participate in the director plan.
The director plan will be administered by the compensation committee. The board
of directors may at any time alter, amend, suspend or terminate the director
plan.

Each outside director may elect that a specified percentage of his or her
future compensation as a director be paid in shares of common stock rather than
in cash. Shares of common stock issuable to an outside director under the
director plan will be transferred to the outside director as soon as
practicable following the end of each calendar quarter.

The total number of shares of common stock to be transferred on each such
date will be determined by dividing:

(a)the product of (1) the percentage of compensation elected by
the outside directors and (2) the outside director's compensation
payable for services rendered in the calendar quarter with respect to
which such transfer is being made; by

(b)the fair market value (as defined in the director plan) of a
share of class A common stock on the last day of such calendar quarter.
Cash will be paid in lieu of any fractional shares of class A common
stock.

Because awards under the director plan depend on elections by outside
directors, and no elections have been made, the awards to be made in 1999 have
not been determined.

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OWNERSHIP OF THE COMMON STOCK

The following table sets forth certain information with respect to the
beneficial ownership of the common stock as of June 30, 1999 by:

. Each person who is known by us to own beneficially more than 5% of
the outstanding shares of common stock;

. Each of our directors;

. Our executive officers named in the "Summary Compensation Table"
on page 52 of this prospectus; and

. All of our directors and executive officers as a group.

Except as otherwise noted, the beneficial owners named in the table have
sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them.

<TABLE>
<CAPTION>
Beneficial Ownership Prior to Beneficial Ownership After
Offerings Offerings
------------------------------------ --------------------------------
Percent of Percent of Percent of Percent of
class A class B class A class B
common stock common stock common stock common stock
Number outstanding outstanding Number outstanding outstanding
---------- ------------ ------------ ------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PNC Asset Management
Inc.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222... 44,935,000 0.00% 81.73%
Laurence D. Fink........ 1,867,189 0.00% 3.40%
Ralph L. Schlosstein.... 1,168,899 0.00% 2.13%
Robert S. Kapito........ 1,092,978 0.00% 1.99%
Thomas H. O'Brien....... -- 0.00% 0.00%
James E. Rohr........... -- 0.00% 0.00%
Walter E. Gregg, Jr..... -- 0.00% 0.00%
Helen P. Pudlin......... -- 0.00% 0.00%
Paul L. Audet........... 165,000 0.00% 0.30%
Robert P. Connolly...... 28,468 0.00% 0.05%
All directors and
executive officers as a
group (9 persons)...... 4,322,534 0.00% 7.86%
</TABLE>

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Background

BFM was acquired by PNC on February 28, 1995 for total consideration of
$240 million. PNC accounted for the acquisition by contributing $10 million of
equity capital and utilized "push down" accounting to record approximately $230
million of debt and approximately $240 million of goodwill on the books of BFM.
Outstanding debt included a $94 million unsecured note payable to certain
partners of BFM through February 2000 with the balance ultimately representing
amounts borrowed from PNC Bank under a $175 million revolving credit facility.

Equity Offering to Employees of BFM

In July 1997, PNC retained an independent investment bank to assist in
the valuation of PNC's investment management business, including a fair market
valuation of BFM in connection with a proposed sale of equity to employees.
PNC's objectives were to establish a long-term retention program for key
employees and to more closely align PNC and employee interests in generating
stockholder value growth. On January 31, 1998, PNC sold 30,000 shares of BFM
restricted stock with a fair value of $999.36 per share to key employees at a
purchase price of $966.00 per share. PNC retained 70,000 shares or a 70%
ownership interest in BFM. BFM received $29.0 million in proceeds from the sale
and recorded compensation expense of $1.0 million reflecting the purchase price
discount from fair value.

In connection with these offerings, BFM, PNC and certain employees of BFM
entered into a stockholders agreement. The stockholders agreement restricts
transfer of BFM employee shares until restrictions are ratably removed on
December 31, 2000, 2001 and 2002, as applicable, or earlier in certain
situations. The stockholders agreement, among other things, also requires
holders of restricted stock who voluntarily terminate their employment with BFM
to sell their shares back to BFM at the lower of cost or fair market value and
provides a right of first refusal in the favor of PNC and BFM employee
stockholders before any sale of BFM stock to a third party. See "Description of
Capital Stock--Common Stock--Stockholders Agreement" for a more complete
description of these terms.

Formation Transactions

On March 31, 1998, PNC contributed BFM and certain of its other
investment management subsidiaries into a new holding company. The contribution
was recorded at historical book value as a combination of entities under common
control. On the formation date, BFM's employee stockholders and PNC exchanged
their shares in BFM for an equal number of shares in BlackRock with PNC
receiving $12.3 million in cash dividends and an additional 94,000 shares of
stock representing the value of PNC's other contributed investment management
businesses. As part of the formation, BlackRock also offered to sell an
additional 5,507 shares of restricted stock with a market value of $1,085.15
per share to key employees of PNC's other contributed businesses at a per share
price of $966.00. These stock transactions were completed in May 1998 with all
employee stockholders, including BFM employees, required to execute a new
stockholders agreement with BlackRock and PNC containing the same provisions
previously outlined in the sale of stock to employees of BFM. Proceeds from the
second sale of stock were $5.3 million with BlackRock recording an additional
$0.7 million in compensation expense. At December 31, 1998, there were five
forward sale agreements to purchase restricted stock outstanding with certain
key employees. These agreements totaled 637 additional shares at an initial
price per share of $966.00 plus an imputed annual financing charge of 12%. Each
of the shares of BlackRock stock owned by PNC and BlackRock employees were
reclassified into approximately 275 shares of class B common stock on September
, 1999.

Transactions with PNC and Its Subsidiaries

After completion of the offerings, PNC will beneficially own
approximately % of the combined voting power and % of the equity of
BlackRock's outstanding common stock (approximately % of the voting power and
%, of the equity, if the underwriters over-allotment options are exercised in
full).

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BlackRock provides risk management advisory services to PNC's corporate
and line of business asset/liability management committees ("ALCO") for which
it received an annual fee of $3.0 million for 1996, 1997 and 1998 and $2.5
million for the six months ended June 30, 1999. Effective June 1, 1998,
BlackRock entered into an agreement with PNC's private banking group to provide
model portfolio and investment research services for $4.4 million per year.
Total fees earned in 1998 were $2.6 million and total fees earned through June
30, 1999 were $2.2 million.

BlackRock acts as the investment adviser for certain commingled funds or
separate accounts which are either sponsored by PNC affiliated entities or are
PNC clients. In most instances, these advisory and administration services are
provided in accordance with formal advisory agreements. BlackRock is generally
compensated on the basis of fees calculated as a percentage of the market value
of the assets under management. Investment advisory and administration fees
associated with PNC affiliated entities for the years ended December 31, 1996,
1997 and 1998 amounted to $10.3 million, $13.1 million and $11.0 million,
respectively. The decrease in 1998 was attributable to the May 1998 conversion
of $8.2 billion in PNC commingled common trust fund assets into the BlackRock
Funds.

At June 30, 1999, clients of PNC affiliated entities maintained
approximately $19.9 billion of investments in the BlackRock Funds, which
represents approximately 80% of the assets in the BlackRock Funds. For the year
ended December 31, 1998, BlackRock earned approximately $69 million in
investment advisory and administrative fees on PNC client investments in the
BlackRock Funds and for the six months ended June 30, 1999 earned approximately
$50.0 million. As a result of the formation and the common trust fund
conversion, BlackRock and PNC entered into a memorandum of understanding in
1998 establishing the services to be provided and fees to be paid to PNC
affiliated entities associated with maintaining their client investments in the
BlackRock Funds. BlackRock also pays co-administration fees to a PNC mutual
fund servicing affiliate for administrative services provided to the Provident
Institutional Funds. Costs for these services are based on a percentage of the
market value of assets under management. Fund administration and servicing
costs-affiliates for the years ended December 31, 1996, 1997 and 1998 were
$19.6 million, $27.3 million and $53.0 million, respectively, and were $36.3
million for the six months ended June 30, 1999. The increase in expense for
1998 and the six months ended June 30, 1999, was largely due to the May 1998
common trust fund conversion.

Pursuant to an administrative services agreement, PNC provides BlackRock
with certain management and administrative services. The services include
legal, audit, employee benefit, payroll and information services. As
consideration for these services, BlackRock pays PNC a monthly fee based on
actual usage of the services or on defined formulas which, in management's
view, result in reasonable charges. Total expense for these services was $6.9
million, $3.0 million and $3.3 million for the years ended December 31, 1996,
1997 and 1998 respectively, and was $2.0 million for the six months ended June
30, 1999.

Pursuant to a master lease agreement with an affiliate of PNC, BlackRock
currently leases approximately 22,500 square feet of office space at 400
Bellevue Parkway, Wilmington, Delaware 19805 and 24,000 square feet of office
space at 1600 Market Street, Philadelphia, Pennsylvania 19103. The lease is
subject to annual renewal and calls for annual lease payments of approximately
$1.4 million. BlackRock believes that the price and other terms under the lease
are at least as favorable as prices and terms being offered generally in the
same marketplaces by unrelated parties for comparable space.

Debt of $153 million at June 30, 1999 included $125 million outstanding
on a $175 million revolving line of credit facility with PNC Bank and a $28
million unsecured note due February 28, 2000 with B.P. Partners, L.P.
BlackRock's outstanding debt largely reflects amounts remaining from PNC's
acquisition of BFM on February 28, 1995. B.P. Partners, L.P. is a limited
partnership comprised of former partners of BFM who received notes as part of
the purchase price for BFM. The revolving credit facility dated February 28,
1996, as amended, bears interest at PNC Bank's prime rate and is not terminable
by the bank except in the event of a default. The unsecured note bears interest
at a fixed rate of 7.5% and is unconditionally guaranteed

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<PAGE>

by PNC. BlackRock repaid $18.8 million on February 28, 1999 and $28.2 million
is due on February 28, 2000. Interest expense paid by BlackRock for the years
ended December 31, 1996, 1997 and 1998 was $20.0 million, $20.2 million and
$13.3 million, respectively, and was $7.1 million for the six months ended June
30, 1999. BlackRock intends that net proceeds from the offerings will be used
to repay a portion of the outstanding indebtedness under the revolving credit
facility with PNC Bank.

Tax Sharing Policy and Tax Disaffiliation Agreement

BlackRock will participate in the PNC and PNC Asset Management, Inc. tax
sharing policies through the completion of the offerings. The PNC tax sharing
policy provides, among other things, that the consolidated federal income tax
liability for all 80% or more owned subsidiaries of PNC included in the PNC
consolidated federal income tax return will generally be allocated to each
subsidiary based on their separately calculated liability. Because BlackRock
and its subsidiaries were not eligible to join PNC's consolidated federal
income tax return after March 31, 1998, the provisions of such policy related
to federal income taxes were not applicable to BlackRock for federal income tax
periods beginning after that date. BlackRock has, however, participated in the
PNC Asset Management, Inc. tax sharing policy, the provisions of which are
generally identical to those of the PNC tax sharing policy, with respect to PNC
Asset Management, Inc. consolidated federal income tax returns for taxable
periods beginning after March 31, 1998. BlackRock will be subject to the state
and municipal provisions of the PNC tax sharing policy through the completion
of the offerings. The PNC tax sharing policy generally provides that state and
municipal income tax liabilities are determined as if each PNC subsidiary has
filed a separate return. In the event that a state or municipality imposes
income and/or franchise taxes on two or more individual PNC subsidiaries, on a
consolidated, combined or unitary basis, the income tax liability is allocated
to those subsidiaries whose business operations generated the liability.

Prior to the completion of the offerings, PNC and BlackRock will enter
into a tax disaffiliation agreement (the "Tax Disaffiliation Agreement") that
will set forth each party's rights and obligations with respect to income tax
payments and refunds for taxable periods before and after the completion of the
offerings and will also address related matters such as the filing of tax
returns and the conduct of audits or other proceedings involving claims made by
taxing authorities.

As described above, prior to the completion of the offerings, BlackRock
and its subsidiaries will be included in consolidated, combined and unitary
income and franchise tax returns with PNC and/or certain of its subsidiaries,
including PNC Asset Management, Inc. Under the Tax Disaffiliation Agreement,
PNC or PNC Asset Management, Inc. will be responsible for preparing and filing
all of such consolidated, combined and unitary income tax returns. In addition,
BlackRock will generally agree to indemnify PNC and PNC Asset Management, Inc.
for income taxes relating to the taxable period, or portion thereof, beginning
before the completion of the offerings to the extent such income taxes are
attributable to BlackRock. BlackRock's share of the income tax liability with
respect to federal consolidated income tax returns including PNC and/or PNC
Asset Management, Inc. generally will be based upon the tax liability that
would have been incurred by BlackRock and its subsidiaries if such group had
filed its own federal consolidated income tax return and with respect to state
or municipal combined or unitary income or franchise tax returns including PNC
and/or certain of its subsidiaries will generally be based upon an allocation
to BlackRock of a percentage of the total tax liability based upon BlackRock's
level of activity in such state or municipality. PNC and PNC Asset Management,
Inc. will agree to indemnify BlackRock for all other income and franchise taxes
relating to the taxable period, or portion thereof, ending on or before the
completion of the offerings. PNC and PNC Asset Management, Inc. also will have
exclusive control over any audits or other proceedings involving claims made by
taxing authorities with respect to such consolidated, combined or unitary tax
returns, notwithstanding that such audits or proceedings may result in a
liability to BlackRock under the Tax Disaffiliation Agreement. PNC is obligated
to consult with BlackRock and take the best interests of all parties into
account in the conduct of such audits or proceedings.

Upon completion of the offerings, BlackRock will begin filing its own
separate consolidated federal income tax return for taxable periods beginning
after the date of the offerings. BlackRock will file separate

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<PAGE>

state and municipal income and franchise tax returns or may be included in
state and municipal income and franchise tax returns with one or more PNC
subsidiaries on a combined or unitary basis. If BlackRock is included in a
group's combined or unitary state or municipal income tax filing with other PNC
subsidiaries, BlackRock's share of the group's liability will generally be
based upon an allocation to BlackRock of a percentage of the total tax
liability based upon BlackRock's level of activity in such state or
municipality.

IPO Agreement

General

We have entered into an Initial Public Offering Agreement with PNC and
PNC Asset Management, Inc. which governs our respective rights and duties with
respect to the offerings, and sets forth covenants we and PNC have agreed to
for various periods following the offerings.

Subsequent issuances of common stock and additional purchases of common stock
by PNC

The IPO Agreement provides that at any time following the offerings until
the date on which PNC or another person (a "PNC transferee") beneficially owns
less than a majority of the voting power of our capital stock (the "Trigger
Date"), we will not, without PNC's prior written consent, issue any shares of
capital stock or any rights, warrants or options to acquire our capital stock
except pursuant to employee benefit plans. The IPO Agreement further provides
that until the Trigger Date, if we issue capital stock, PNC will be entitled,
but not required, to purchase from BlackRock a number of shares of capital
stock when it is issued so that PNC would continue to maintain the same
proportionate economic and voting rights after the issuance as it had before
the issuance of capital stock. If we issue capital stock for cash, PNC must pay
the same per share price to purchase additional shares. In all other cases, the
price that PNC must pay to purchase the additional shares of capital stock
shall be the fair value of the class of capital stock and, with respect to
class A common stock and class B common stock, shall be equal to the average of
the closing prices of the class A common stock reported on the NYSE for the ten
trading days prior to the completion of the issuance giving rise to PNC's
additional purchase right.

Change in control of PNC or BlackRock

The IPO Agreement provides that if there is a change in control of PNC or
BlackRock at any time following the offerings until the Trigger Date, PNC or
its successor must offer to purchase all of our outstanding capital stock not
held by PNC or its successor (i.e., stock held by public stockholders and
employee stockholders) at a "fair value" if, within 12 months following the
anniversary of the effective date of change in control of PNC or BlackRock, a
committee consisting of all of our independent directors immediately prior to
such a change in control determines that the fundamental economics and
prospects of our business have been materially and adversely affected as a
result of the change in control of PNC or BlackRock.

The "fair value" of our capital stock would be determined through good
faith negotiation by a special committee of our board of directors and PNC or
its successor. However, if we were unable to agree on a fair value, then the
fair value would be determined by two nationally recognized investment banking
or business appraisal firms--one selected by PNC or its successor and one
selected by the special committee. If these two firms were unable to agree on
the fair value of our capital stock, they would jointly select a third
nationally recognized investment banking or business appraisal firm which would
resolve any disputes between the two original firms and conclusively determine
the fair value of our capital stock. Fair value of our capital stock will be
determined by reference to, among other factors, the trading value of our class
A common stock prior to the announcement of the change in control of PNC or
BlackRock.

A "change in control of PNC" will be deemed to occur if, whether by an
actual or threatened proxy contest, including a consent solicitation, or any
merger, reorganization, consolidation or similar transaction, persons who are
directors of PNC immediately prior to the proxy contest or execution of the
agreement

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<PAGE>

pursuant to which the transaction is consummated cease to constitute a majority
of the board of directors of PNC or any successor entity immediately following
the proxy contest or the consummation of the transaction. In making the
determination as to whether a majority of the board of directors consists of
persons who served as directors prior to the proxy contest or other
transaction, any director whose initial assumption of office was in connection
with a prior actual or threatened proxy contest will not be deemed to be a
prior director regardless of when the individual took office.

A "change in control of BlackRock" will be deemed to have occurred if (i)
due to a transfer of voting stock, a person other than PNC or its affiliates
holds a majority of the voting power of the voting stock of BlackRock or (ii)
whether by virtue of an actual or threatened proxy contest (including a consent
solicitation) or any merger, reorganization, consolidation or similar
transaction, persons who are directors of BlackRock immediately prior to such
proxy contest or the execution of the agreement pursuant to which such
transaction is consummated (other than a director whose initial assumption of
office was in connection with a prior actual or threatened proxy contest) cease
to constitute a majority of the board of directors of BlackRock or any
successor entity immediately following such proxy contest or the consummation
of such transaction.

Other BlackRock Covenants

After the offerings, PNC will continue to own a significant portion of
our outstanding voting stock. As a result, PNC will continue to include us as a
"subsidiary" for various financial reporting, accounting and other purposes.
Accordingly, we have agreed to certain covenants in the IPO Agreement. Certain
of these covenants are described below:

Financial information. We have agreed that, for so long as PNC is
required to consolidate our results of operations and financial position or
account for its investment in BlackRock using the equity method of accounting
or for such longer time as may be required by applicable banking laws as a
result of PNC's investment in BlackRock, and subject to appropriate
confidentiality provisions to protect the confidentiality commitments we have
made to our customers, we will:

. provide PNC full access to our books and records, including
budgets and financial projections;

. present our financial information in a manner consistent with
PNC's accounting policies and procedures; and

. cooperate fully with PNC in connection with public disclosures and
regulatory reporting.

We have generally agreed to indemnify PNC and its affiliates against all
liabilities arising out of any incorrect, inaccurate or incomplete financial
and other information we provide to PNC pursuant to the terms of the IPO
Agreement.

Other covenants. Until the Trigger Date, we have agreed that:

. we will not, without PNC's prior written consent, which it may
withhold in its sole and absolute discretion, take any action
which limits PNC's ability to freely sell, pledge or otherwise
dispose of shares of our capital stock or limits the legal rights
of or denies any benefit to PNC as a BlackRock stockholder in a
manner not applicable to BlackRock stockholders generally; and

. to the extent that PNC is a party to, or enters into, any
agreements that provide that certain actions of PNC's subsidiaries
may result in PNC being in breach or default under such

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agreements, and we have been advised of the existence of such
agreements, we will not take any actions that may result in PNC
being in breach or default under any such agreement. PNC will not,
however, enter into any agreements that would materially restrict
BlackRock's business as currently conducted.

Expenses

In general, unless otherwise provided for in the IPO Agreement or any
other agreement, we and PNC will pay our respective costs and expenses
incurred in connection with the offerings.

Registration Rights Agreement

PNC and our employees who hold shares of class B common stock cannot
freely sell such shares without registration under the Securities Act.
Accordingly, we have entered into a Registration Rights Agreement with PNC
Asset Management, Inc. and our employee stockholders to provide them with
registration rights relating to shares of our class A common stock into which
their shares of class B common stock are convertible. No shares may be sold
under the Registration Rights Agreement until the expiration of the 180-day
lock-up period. See "Shares Eligible for Future Sale."

Shares covered. The Registration Rights Agreement covers the shares of
our common stock that are held by PNC and our employee stockholders or that
PNC or our employee stockholders may acquire in the future.

Demand Registrations. PNC or employee stockholders holding a majority
interest of the class B common stock held by all employee stockholders may
request registration under the Securities Act of all or any portion of our
shares covered by the Registration Rights Agreement.

. Terms of each offering. PNC or the employee stockholders will
designate the terms of each offering effected pursuant to a Demand
Registration, which may take any form, including an underwritten
public offering or a shelf registration.

. Timing of demand registration. We are not required to undertake a
Demand Registration within 90 days of the effective date of a
previous Demand Registration. Also, we have the right to postpone the
filing or effectiveness of any Demand Registration for up to 90 days
if in our reasonable judgment such registration would interfere with
any existing proposal or plans by our company to engage in certain
material transactions, provided, however, that we may exercise this
right only for a total of 90 days in any 12-month period.

Piggyback registrations. The Registration Rights Agreement also provides
for certain "piggyback" registration rights for PNC and our employee
stockholders. Whenever we propose to register any of our securities under the
Securities Act for ourselves or others, subject to certain customary
exceptions, we must provide prompt notice to PNC and our employee stockholders
and use our reasonable best efforts to include in such registration all shares
of our stock which PNC or our employee stockholders request to be included.

Registration procedures and expenses. The Registration Rights Agreement
sets forth customary registration procedures, including a covenant by us to
use our reasonable best efforts to make available our senior management for
road show presentations. All registration expenses incurred in connection with
the Registration Rights Agreement, including all filing fees, fees and
expenses of compliance with securities and/or

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<PAGE>

blue sky laws, financial printing expenses, fees and disbursements of
custodians, transfer agents, exchange agents and/or information agents, and
fees and disbursements of counsel for our company and all independent certified
public accountants, underwriters, excluding discounts and commissions, and
other persons retained by us will be paid by us.

Indemnification. The Registration Rights Agreement contains customary
indemnification and contribution provisions by us for the benefit of PNC, our
employee stockholders and any underwriters and by PNC and our employee
stockholders for the benefit of us and any underwriters with respect to
information provided by PNC or our employee stockholders.

Transfer. PNC and our employee stockholders may transfer shares covered
by the Registration Rights Agreement and the holders of such transferred shares
will be entitled to the benefits of the Registration Rights Agreement, provided
that each such transferee agrees to be bound by the terms of the Registration
Rights Agreement. Such transferees will be entitled to the rights available to
PNC or our employee stockholders described above. Any successor entities to our
company will be bound by the terms of the Registration Rights Agreement.

Duration. The registration rights under the Registration Rights Agreement
will remain in effect with respect to any shares of our common stock until:

. such shares have been sold pursuant to an effective registration
statement under the Securities Act;

. such shares have been sold to the public pursuant to Rule 144
under the Securities Act, or any successor provision;

. such shares have been otherwise transferred to a person who is not
PNC or an employee stockholder; and

. such shares have ceased to be outstanding.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

Our authorized equity capital consists of shares of class A
common stock, $.01 par value per share, shares of class B common
stock, $.01 par value per share, (the class A common stock and class B common
stock, together, the "common stock"), and shares of preferred stock,
$.01 par value per share. No preferred stock is outstanding as of the date of
this prospectus. Of the class A common stock authorized, 9,000,000 shares are
being offered in the offerings (10,350,000 shares if the underwriters' over-
allotment options are exercised in full). class A common shares have
been reserved for issuance pursuant to certain of our employee benefit plans.
See "Management" and "Executive Compensation." Of the class B common stock
authorized, 54,982,635 will be outstanding and held by PNC (or its affiliates)
and certain employee stockholders. The following summary description of our
capital stock is qualified by reference to our certificate of incorporation and
bylaws, copies of which are filed as exhibits to the registration statement,
and to Delaware corporate law.

Common Stock

Voting rights

The holders of class A common stock and class B common stock generally
have identical rights. The one exception is that, on all matters to be voted on
by stockholders, holders of class A common stock are entitled to one vote per
share, whereas holders of class B common stock are entitled to five votes per
share. Holders of shares of class A common stock and class B common stock are
not entitled to cumulate their votes in the election of directors. Generally,
all matters to be voted on by stockholders must be approved by a majority (or,
in the case of election of directors, by a plurality) of the votes entitled to
be cast by all shares of class A common stock and class B common stock present
in person or represented by proxy, voting together as a single class, subject
to any voting rights granted to holders of any outstanding preferred stock.

Except as otherwise provided by law or in our certificate of
incorporation or bylaws, and subject to any voting rights granted to holders of
any outstanding preferred stock, amendments to our certificate of incorporation
generally must be approved by a majority of the combined voting power of all
class A common stock and class B common stock voting together as a single
class. Amendments to our certificate of incorporation that would alter or
change the powers, preferences, or special rights of the class A common stock
or the class B common stock so as to affect them adversely also must be
approved by a majority of the votes entitled to be cast by the holders of the
shares adversely affected by the amendment, voting as a separate class. Holders
of class A common stock are not eligible to vote on any change in the powers,
preferences, or special rights of the class B common stock that would not
adversely affect the rights of the class A common stock (and vice versa). For
the foregoing purposes, any provisions for the voluntary, mandatory or other
conversion of class B common stock into or for class A common stock on a one-
for-one basis are deemed not to adversely affect the rights of the class A
common stock. Any amendment to our certificate of incorporation to increase the
authorized shares of any class or classes of capital stock will be deemed not
to affect adversely the powers, preferences, or special rights of the class A
common stock or class B common stock.

Dividends

Holders of class A common stock and class B common stock will receive an
equal amount per share in any dividend declared by the board of directors.
Dividends to any holders of common stock are subject to any preferential rights
of any outstanding preferred stock. In addition, because BlackRock is a
consolidated subsidiary of PNC Bank, federal restrictions on payment of
dividends by PNC Bank may apply to BlackRock. See "Business --Regulation."
Dividends consisting of shares of class A common stock and class B common stock
may be paid only as follows:

. shares of class A common stock may be paid only to holders of class A
common stock and shares of class B common stock may be paid only to
holders of class B common stock; and

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. shares will be paid proportionally with respect to each
outstanding share of class A common stock and class B common
stock.

We may not reclassify, subdivide or combine the shares of either class of
common stock without at the same time proportionally reclassifying, subdividing
or combining shares of the other class.

Conversion

Subject to the transfer and other restrictions in the Amended
Stockholders Agreement, holders of class B common stock may, at their option,
convert their shares of class B common stock into shares of class A common
stock at anytime. Each share of class B common stock is convertible into one
share of class A common stock. Any unrestricted shares of class B common stock
held by employee stockholders will automatically convert into shares of class A
common stock upon the termination of their employment with BlackRock.

Other rights

In the event of any reorganization or consolidation of BlackRock with one
or more corporations or a merger of BlackRock with another corporation in which
shares of common stock are converted into or exchangeable for shares of stock,
other securities or property, including cash, all holders of common stock,
regardless of class, will be entitled to receive the same kind and amount of
shares of stock and other securities and property, including cash, unless
otherwise approved by a majority of the votes entitled to be cast by the
holders of each class of common stock, voting separately as a class.

On liquidation, dissolution, or winding up of BlackRock, after payment in
full of any amounts required to be paid to holders of preferred stock, all
holders of common stock, regardless of class, are entitled to share ratably in
any assets available for distribution to holders of shares of common stock. No
shares of common stock are subject to redemption or have preemptive rights to
purchase additional shares of common stock, except as provided under the terms
of the IPO Agreement and the Amended Stockholders Agreement. Under the IPO
Agreement, PNC has the right, at its option, any time we issue additional
shares of capital stock, to purchase a sufficient number of shares of capital
stock so that PNC maintains its proportionate economic and voting rights after
the issuance as it had before the issuance of capital stock. See "Certain
Relationships and Related Transactions--IPO Agreement--Subsequent issuances of
common stock and additional purchases of common stock by PNC." Upon
consummation of the offerings, all the outstanding shares of class A common
stock and class B common stock will be validly issued, fully paid, and
nonassessable.

Stockholders Agreement

BlackRock, PNC Asset Management, Inc., the indirect, wholly owned
subsidiary of PNC that holds PNC's shares of class B common stock, and certain
employees of BlackRock, or its affiliates, who will hold shares of class B
common stock, have been parties to a stockholders agreement since April 30,
1998. These parties will enter into an Amended Stockholders Agreement which
will become effective when the offerings are completed.

For so long as PNC owns voting stock representing at least 25% of the
voting power of the capital stock of BlackRock, subject to applicable law, (i)
the employee stockholders agree to vote their shares for the election of the
four director candidates nominated by PNC and (ii) PNC agrees to vote its
shares of Class B common stock for the two director candidates nominated by the
BlackRock management committee. From and after the time PNC owns voting stock
representing less than 25% but more than 10% of the voting power of BlackRock,
subject to applicable law, (x) the employee stockholders agree to vote their
PNC shares for the election of two director candidates nominated by PNC and (y)
PNC agrees to vote its shares of class B common stock for two director
candidates nominated by the BlackRock management committee.

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Under the terms of the Amended Stockholders Agreement, one-third of the
class B shares held by the employee stockholders may not be transferred,
except for estate planning purposes, until December 31, 2000; one third until
December 31, 2001; and one third until December 31, 2002 with respect to
shares issued prior to September 1999; and one third on each of the third,
fourth and fifth anniversary dates of the closing of the offerings with
respect to shares issued in September 1999. If a holder of class B common
stock attempts to transfer restricted shares of class B common stock in a
transfer that is not permitted under, or would violate, the Amended
Stockholders Agreement, then that transfer will not be registered by
BlackRock.

The Amended Stockholders Agreement will provide that any restrictions on
shares held by an employee stockholder or permitted transferee will
immediately lapse upon the termination of the employee's employment by
BlackRock without cause or good reason, or upon termination of the employee's
employment by reason of a deficient opportunity (as defined above under
"Management--Employment Agreements") or as a result of death or disability.
Immediately following the termination of an employee stockholder's employment,
all shares of unrestricted class B common stock then held by that employee
will convert into shares of class A common stock.

The Amended Stockholders Agreement will provide that upon a termination
of an employee's employment by BlackRock for cause or good reason or by the
employee for any reason other than a deficient opportunity, death or
disability, BlackRock must purchase all remaining restricted shares then held
by the employee or valid transferee of the employee at the lower of:

. the market value of the shares, which will be equal to the market
value of shares of class A common stock, or

. the cost at which the shares were originally acquired by the
employee.

The Amended Stockholders Agreement will provide that any proposed
transfer of class B common stock will be subject to a right of first refusal
and, in certain circumstances, rights to participate in the proposed transfer
by the other holders of class B common stock as follows:

. The right of first refusal means that before a holder of class B
common stock can sell any of its shares of class B common stock to
a third party, it must first offer the shares on the same
terms as offered to the third party to the other holders of class
B common stock for purchase in proportion to their respective
ownership interests. Any shares which are not claimed under the
right of first refusal within 30 days may then be sold to the
third party at a price that is at least as high as was originally
proposed.

. The rights to participate in the proposed transfer apply if a
holder of class B common stock proposes to transfer to a third
party shares constituting more than 5% of the then outstanding
class B common stock. In that event, any other holder of class B
common stock who does not exercise the right to purchase the
shares pursuant to the right of first refusal described above may
instead require the transferring stockholder to include a portion
of the holder's unrestricted shares in the block of shares being
sold to the third party.

The right of first refusal and rights to participate in the proposed
transfer are not applicable to transfers of shares of class B common stock
among PNC affiliates, to transfers of shares by an employee stockholder to the
estate, personal representative or certain family members of employee
stockholders, or to certain entities which hold an economic interest for the
benefit of any such persons or to BlackRock and to the transfer of shares
registered in accordance with the terms of the Registration Rights Agreement.
Any PNC transferee will be bound by the Amended Stockholders Agreement and
have the rights and obligations of PNC under the Amended Stockholders
Agreement.

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If PNC or its affiliates or, following a change in control of PNC or
BlackRock, any successor offers to purchase or purchases all outstanding shares
of class A common stock or class B common stock or purchases sufficient shares
of class A common stock to cause such stock to be delisted, it must also offer
to purchase all outstanding shares of class B common stock or other capital
stock held by employee stockholders at fair value, which, with respect to both
class A common stock and class B common stock, shall be the highest price paid
for class A common stock or class B common stock as applicable, and offer to
cancel all BlackRock stock options held by each employee stockholder, if any,
for a cash payment in an amount based upon the excess of the price offered to
other stockholders over the exercise price of such stock options.

Preferred Stock

At the date of this prospectus, no shares of preferred stock are
outstanding. The board of directors may authorize the issuance of preferred
stock in one or more classes or series and may determine, with respect to any
class or series, the designations, powers, preferences, and rights of the class
or series, and its qualifications, limitations, and restrictions, including,
without limitation:

. the designation of the class or series;

. the number of shares of the class or series, which number the
board of directors may later increase or decrease, unless
otherwise provided in the designations for the class or series;
however, the number of shares cannot be decreased below the number
of shares of the class or series then outstanding;

. whether dividends, if any, will be cumulative or noncumulative and
the dividend rate of the series; the conditions upon which and the
dates at which dividends, if any, will be payable, and the
relation that those dividends, if any, will bear to the dividends
payable on any other class or classes of stock;

. the redemption rights and price or prices, if any, for shares of
the class or series;

. the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the class or series;

. the amounts payable on shares of the class or series and the
preferences, if any, of shares of the class or series in the event
of any voluntary or involuntary liquidation, dissolution, or
winding up of BlackRock;

. whether the shares of the class or series will be convertible into
shares of any other class or series, or any other security, of
BlackRock or any other corporation; if the shares will be
convertible, the specification of the other class or series or the
other security, the conversion price or prices or rate or rates,
any applicable adjustments, the date or dates at which the shares
will be convertible and all other terms and conditions upon which
the conversion may be made;

. restrictions, if any, on the issuance of shares of the same class
or series or of any other class or series of BlackRock capital
stock; and

. the voting rights, if any, of the holders of shares of the class
or series.

We believe that the ability of the board of directors to issue one or
more classes or series of preferred stock will provide us with flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs that might arise. The authorized shares of preferred stock will
be available for issuance without further action by our stockholders, unless
action is required by applicable law or by the rules of any stock exchange on
which our securities may be listed or traded. The NYSE, on which BlackRock
expects to list the class A common stock, currently requires stockholder
approval as a prerequisite to listing shares in several instances, including
where the present or potential issuance of shares could result in an increase
of at least 20% in the number of shares of common stock outstanding or in the
amount of voting securities outstanding.

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Although the board of directors has no current intention of doing so, it
could issue a class or series of preferred stock that could, depending on the
terms of the class or series, impede the completion of a merger, tender offer,
or other takeover attempt. The board of directors will make any determination
to issue shares based on its judgment as to the best interests of BlackRock and
our stockholders. In making its determination, the board of directors could
issue preferred stock having terms that could discourage a potential acquirer
from making an acquisition attempt that may change the composition of the board
of directors, without first negotiating with the board of directors. The
transactions that might be discouraged could include a tender offer or other
transaction that some, or a majority, of our stockholders might believe to be
in their best interests or in which stockholders might receive a premium for
their stock over the then current market price of the stock.

Delaware Business Combination Statute

Our amended and restated certificate of incorporation provides that
Section 203 of the Delaware General Corporation Law, which restricts certain
business combinations between a corporation and certain interested stockholders
of that corporation, is not applicable to us. However, our amended and restated
certificate of incorporation contains provisions that as of and following the
Trigger Date will restrict transactions between us and interested stockholders,
other than PNC or its successors, in the same manner such transactions would be
restricted if we were subject to Section 203. See "Certificate of Incorporation
and Bylaw Provisions-- Business combination transaction restrictions."

Certificate of Incorporation and Bylaw Provisions

The summary set forth below describes material provisions of the
certificate of incorporation and bylaws. The summary is qualified in its
entirety by reference to the provisions of the certificate of incorporation and
bylaws, copies of which were filed as exhibits to the registration statement of
which this prospectus forms a part.

Certain of the provisions of the certificate of incorporation or the
bylaws discussed below may, following the Trigger Date, either alone or in
combination with the provisions of the Delaware General Corporation Law
discussed above, make more difficult or discourage a tender offer, proxy
contest or other takeover attempt that is opposed by the board of directors but
that a stockholder might consider to be in such stockholder's best interest.
Those provisions include restrictions on the rights of stockholders to remove
or elect directors and prohibitions against stockholders calling a special
meeting of stockholders. Prior to the Trigger Date, these provisions either
will not apply or will have little practical significance in terms of
discouraging takeover attempts because such attempts cannot succeed without the
consent of PNC or a PNC transferee so long as PNC or a PNC transferee owns more
than 50% of our voting power. In addition, the certificate of incorporation
contains provisions relating to the allocation of certain corporate
opportunities and resolution of certain conflicts of interest.

Staggered board

The certificate of incorporation and the bylaws divide the board of
directors into three classes of directors, each class constituting
approximately one-third of the total number of directors. One class will be
originally elected for a term expiring at the annual meeting of stockholders to
be held in 2000, another will be originally elected for a term expiring at the
annual meeting of stockholders to be held in 2001 and another will be
originally elected for a term expiring at the annual meeting of stockholders to
be held in 2002. Each director is to hold office until his or her successor is
duly elected and qualified. Commencing with the 2000 annual meeting of
stockholders, directors elected to succeed directors whose terms then expire
will be elected for a term of office to expire at the third succeeding annual
meeting of stockholders after their election, with each director to hold office
until such person's successor is duly elected and qualified.

The classification of the board of directors will make it more difficult
for stockholders to change the composition of the board of directors because
only a minority of the directors can be elected at once. The classification
provisions could also discourage a third party from accumulating BlackRock's
stock or attempting

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to obtain control of BlackRock, even though such an attempt might be beneficial
to BlackRock and some, or a majority, of its stockholders. Accordingly, under
certain circumstances stockholders could be deprived of opportunities to sell
their shares of common stock at a higher price than might otherwise be
available.

Number and composition of directors; filling vacancies; removal

The certificate of incorporation and bylaws provide that the board of
directors will consist of a number of directors as may be fixed from time to
time pursuant to a resolution adopted by directors constituting, prior to the
Trigger Date, at least 80% of the directors on the board of directors, and as
of and following the Trigger Date, a majority of the board of directors. The
bylaws provide that unless the board of directors otherwise determines, any
vacancies on the board of directors will be filled by the affirmative vote of
80% of the remaining directors, prior to the Trigger Date, or as of or
following the Trigger Date, by a majority of the directors then in office, or
by a sole remaining director or by the stockholders if such vacancies resulted
from the action of the stockholders. These provisions would be subject to any
rights of holders of preferred stock to elect directors under specified
circumstances. Accordingly, absent an amendment to the certificate of
incorporation or the bylaws, the board of directors could prevent any
stockholder from enlarging the board of directors and filling the new
directorships with such stockholder's own nominees.

The certificate of incorporation and the bylaws provide that as of and
following the Trigger Date, a director may be removed only for cause and only
upon the affirmative vote of holders of at least 80% of the voting power of the
then outstanding shares of common stock entitled to vote generally in the
election of directors, voting together as a single class. Prior to the Trigger
Date, directors may be removed, with or without cause, with the affirmative
vote of the holders of at least a majority of the voting power of the then
outstanding voting stock, voting together as a single class. Prior to the
Trigger Date, PNC or a PNC transferee will always have the power to remove any
director, subject to its obligations under the Amended Stockholders Agreement.
See "--Stockholders Agreement."

The bylaws also provide that, prior to the Trigger Date, to the extent
permitted by applicable law:

. a majority of all of the directors on the committees of the board
of directors will be directors designated by PNC or its
affiliates, and

. at least one director on each committee of the board of directors
will be a director designated by our management committee.

Quorum; certain board voting requirements

The bylaws provide that a quorum for the transaction of business by the
board of directors at a meeting will only be constituted if a majority of the
board of the directors, and, until the Trigger Date, including the chairman of
the board of directors and two directors designated by PNC, are present at the
meeting; provided, that the board of directors will be entitled to take any
action at any meeting if a quorum is otherwise present if the meeting is a
regularly scheduled meeting or, if the meeting is not a regularly scheduled
meeting, after having been sent required notice of the meeting, either two of
the directors designated by PNC or the chairman of the board are absent from
the meeting and, the absent PNC designated directors or chairman of the board
will have failed to communicate in writing to the secretary of BlackRock good
reason for such absence in advance of the relevant meeting. The bylaws also
provide that, prior to the Trigger Date, except as otherwise provided by
applicable law, certain bylaw amendments including but not limited to those
relating to: changes in the size and composition of the board of directors,
mergers, acquisitions and certain other significant transactions, issuance of
additional stock, incurrence of indebtedness, engaging in new types of business
activities, proposed changes in auditors and dividend declarations and matters
which may materially affect the economic interests of PNC, may only be acted
upon or put into effect by the affirmative vote of 80% of the board of
directors. Based on the expected composition of the board of directors
following the offerings, an affirmative vote of 80% of the board of directors
would require the affirmative vote of at least two directors who are designated
to be directors by PNC.

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Certain business activities

The bylaws provide that so long as PNC or any of PNC's subsidiaries
directly or indirectly owns at least 10% of the capital stock or 5% of any
"class" of "voting securities" (as those terms are defined for purposes of the
Federal Reserve Board's Regulation Y) of BlackRock, BlackRock or any successor
entity to it may not, without PNC's consent, directly or indirectly own any
asset or engage in any activity if to do so would cause BlackRock or any of its
subsidiaries or the PNC entity that owns capital stock of BlackRock or any
successor to such PNC entity, to be in violation of any applicable federal
banking law or any rule, regulation, policy or order of any federal banking
regulator with jurisdiction over BlackRock or the PNC entity. The bylaws
further provide that BlackRock will, and will cause its subsidiaries to, take
any necessary action to ensure compliance with the foregoing provision,
including, without limitation, obtaining any required approval from, or filing
any required notice or application with, any applicable federal banking agency.
The bylaws also provide that if PNC owns less than 10% of the capital stock and
less than 5% of any class of voting securities of BlackRock, BlackRock or a
successor will provide PNC with written notice before engaging in new
activities or investing in assets not permitted by applicable banking laws, in
order to allow PNC sufficient time after such notice to restructure PNC's
investment so as to free BlackRock from the applicable activities restrictions.
References to PNC in this provision include references to any successor company
to PNC.

No stockholder action by written consent

The certificate of incorporation and bylaws provide that, subject to the
rights of any holders of preferred stock to elect additional directors under
specified circumstances,

. effective as of the Trigger Date, stockholder action can be taken
only at an annual or special meeting of stockholders and
stockholder action may not be taken by written consent in lieu of
a meeting; and

. prior to the Trigger Date, any stockholder action can be taken by
written consent in lieu of an annual or special meeting of
stockholders as permitted by law.

Advance notice procedures

The bylaws provide for an advance notice procedure for the nomination,
other than by or at the direction of the board of directors or by a Controlling
Stockholder prior to the Trigger Date, of candidates for election as directors,
as well as for other stockholder proposals to be considered at annual meetings
of stockholders. In general, notice of intent to nominate a director or raise
matters at meetings will have to be received in writing by BlackRock not less
than 120 nor more than 150 days prior to the anniversary of the mailing date of
proxy materials for the previous year's annual meeting of stockholders. The
notice must contain certain information concerning the person to be nominated
or the matters to be brought before the meeting and concerning the stockholder
submitting the proposal.

Special meetings

The certificate of incorporation and bylaws provide that special meetings
of stockholders can be called only by BlackRock's chairman or president or a
majority of the board of directors. Prior to the Trigger Date, special meetings
can also be called at the request of PNC. Effective as of the Trigger Date, the
power of any stockholder to call a special meeting is specifically denied. This
provision is subject to the rights of holders of any series of preferred stock
to elect additional directors under specified circumstances. The business
permitted to be conducted at any special meeting of stockholders is limited to
the business brought before the meeting pursuant to the notice of meeting.

The provisions of the bylaws permitting special meetings to be called
only by BlackRock's chairman or president or at the request of a majority of
the board of directors may have the effect, after the Trigger Date, of delaying
consideration of a stockholder proposal until the next annual meeting.
Moreover, a stockholder could not force stockholder consideration of a proposal
over the opposition of BlackRock's chairman or president or a majority of the
board of directors by calling a special meeting of stockholders prior to the
time they believe stockholder consideration to be appropriate.

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Business combination transaction restrictions

As of and following the Trigger Date, we will be subject to restrictions
on certain business combinations between us and an interested stockholder set
forth in our certificate of incorporation. These restrictions are intended to
be equivalent to the restrictions on business combinations with interested
stockholders imposed by Section 203 of the Delaware General Corporation Law.
BlackRock has elected not to be subject to Section 203 of the Delaware General
Corporation Law. The following discussion is a summary of these restrictions in
our certificate of incorporation. An "interested stockholder" is a person,
other than BlackRock, PNC, PNC's successor, or any majority-owned subsidiary of
BlackRock or PNC, that:

. owns 15% or more of the outstanding voting stock of BlackRock;

. is an affiliate or associate of BlackRock and was the owner of 15%
or more of the outstanding voting stock of BlackRock at any time
within the three year period immediately prior to the date on
which the determination of whether that person is an interested
stockholder is made; or

. is an affiliate or associate of the persons described in the
second bullet point of this sentence.

The restrictions do not apply if:

. prior to an interested stockholder becoming an interested
stockholder, the board of directors approved either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder;

. upon consummation of the transaction that resulted in any person
becoming an interested stockholder, the interested stockholder
owned at least 85% of our voting equity outstanding at the time
the transaction commenced (excluding shares owned by certain
employee equity ownership plans and persons who are both our
directors and officers); or

. at or subsequent to the time an interested stockholder becomes an
interested stockholder, the business combination is both approved
by the board of directors and authorized at an annual or special
meeting of our stockholders, not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting
equity not owned by the interested stockholder.

Under certain circumstances, these provisions will make it more difficult
for a person who would be an "interested stockholder" as of and following the
Trigger Date to effect various business combinations with us for a three-year
period. It is anticipated that these provisions may encourage companies
interested in acquiring us to negotiate in advance with the board of directors,
since the stockholder approval requirement would be avoided if a majority of
the directors then in office approves, prior to the date on which a stockholder
becomes an interested stockholder, either the business combination or the
transaction that results in the stockholder becoming an interested stockholder.

Liability of directors; indemnification

BlackRock's certificate of incorporation provides that, to the fullest
extent permitted by the Delaware General Corporation Law, no director of
BlackRock will be liable to BlackRock or its stockholders for monetary damages
for the breach of his or her fiduciary duty as a director. Under the Delaware
General Corporation Law, this provision does not eliminate or limit the
liability of any director if a judgment or other final adjudication establishes
that his or her acts or omissions constituted a breach of his or her duty of
loyalty

to BlackRock or its stockholders or were in bad faith or involved intentional
misconduct or a knowing violation of law or that he or she personally gained a
material profit or other advantage to which he or she was not legally entitled
or that his or her acts violated Section 174 of the Delaware General
Corporation Law.

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As a result of this provision, BlackRock and its stockholders may be
unable to obtain monetary damages from a director for breach of his duty of
care. Although stockholders may continue to seek injunctive or other equitable
relief for an alleged breach of fiduciary duty by a director, stockholders may
not have any effective remedy against the challenged conduct if equitable
remedies are unavailable.

The bylaws provide that BlackRock will indemnify, to the maximum extent
permitted by Delaware law, any person who was or is a party to any threatened,
pending, or completed action, suit or proceeding because he or she is or was a
director or officer of BlackRock, or is or was serving at the request of
BlackRock as a director or officer of another corporation, partnership or other
enterprise. The bylaws provide that indemnification will be from and against
expenses, liabilities, losses, judgments, fines and amounts paid in settlement
by the director or officer.

Overview of corporate opportunity and conflict of interest policies

Our certificate of incorporation sets forth provisions which regulate and
define the conduct of certain business and affairs of BlackRock relating to
corporate opportunities and conflicts of interest. These provisions serve to
address the respective rights and duties of BlackRock, PNC and certain of their
respective directors, and officers in anticipation that:

. directors, officers, and/or employees of PNC may serve as
directors of BlackRock;

. PNC engages in, is expected to continue to engage in, and in the
future may engage in lines of business that are the same as,
similar or related to, overlap or compete with the lines of
business of BlackRock; and

. PNC and BlackRock will engage in material business transactions
including, without limitation, pursuant to the agreements
described under "Certain Relationships and Related Transactions."

BlackRock may, from time to time, enter into and perform agreements with
PNC to engage in any transaction, and to agree to compete or not to compete
with each other, including to allocate, or to cause their respective directors,
officers and employees to allocate, corporate opportunities between themselves.
BlackRock may also enter into such agreements with its own or PNC's directors,
officers or employees, or with other entities in which these persons have a
financial interest.

The termination of the provisions of our certificate of incorporation
with regard to such transactions or corporate opportunities will not terminate
the effect of those provisions with respect to any agreement between BlackRock
or an affiliate and PNC that was entered into before that time or any
transaction entered into in the performance of such agreement, whether entered
into before or after that time, or any transaction entered into between
BlackRock and PNC for the allocation of any opportunity between them before
that time. These provisions do not alter the fiduciary duty of loyalty of our
directors under applicable Delaware law. Subject to applicable Delaware law, by
becoming a stockholder in BlackRock, you will be deemed to have notice of and
have consented to these provisions of our certificate of incorporation. These
provisions may be amended only with the affirmative vote of the holders of at
least 80% of the voting power of all shares of voting stock then outstanding,
voting together as a single class.

Amendment

In general, prior to the Trigger Date, our certificate of incorporation
may be altered or repealed and new provisions thereof adopted by the
affirmative vote of the holders of a majority of the outstanding voting stock
and by the affirmative vote of 80% of the board of directors. Similarly, our
bylaws may be altered or repealed and new provisions thereof adopted by the
affirmative vote of the holders of a majority of the outstanding voting stock
or by the affirmative vote of a majority of the board of directors, except that
prior to

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the Trigger Date, the board of directors will only be able to effect such an
amendment through the affirmative vote of at least 80% of the members of the
board of directors. As of and following the Trigger Date, certain provisions of
our certificate of incorporation and bylaws, including those relating to
stockholder action by written consent, the calling of special stockholder
meetings, other stockholder actions and proposals and certain matters related
to our board of directors, may be amended only by the affirmative vote of
holders of at least 80% of the voting stock.

Listing

The class A common stock has been approved for listing on the NYSE under
the symbol "BLK."

Transfer Agent and Registrar

The transfer agent and registrar for the class A common stock is
ChaseMellon Shareholders Services, L.L.C.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offerings, we will have outstanding 9,000,000
shares of class A common stock and 54,982,635 shares of class B common stock.
All of the shares of class A common stock to be sold in the offerings will be
freely tradable without restrictions or further registration under the
Securities Act, except that shares purchased by one of our affiliates will be
subject to the resale limitations of Rule 144. The shares of class A
and class B common stock owned by PNC and our other existing stockholders may
not be sold in the absence of registration under the Securities Act other than
pursuant to Rule 144 under the Securities Act or another exemption from
registration under the Securities Act.

In general, under Rule 144:

. a person (or persons whose shares are required to be aggregated)
who has beneficially owned shares of common stock as to which at
least one year has elapsed since such shares were sold by us or by
an affiliate in a transaction or chain of transactions not
involving a public offering ("restricted securities"); or

. an affiliate who holds shares of common stock that are not
restricted securities

may sell, within any three-month period, a number of shares that does not
exceed the greater of 1% of our common stock then outstanding or the average
weekly trading volume in the common stock during the four calendar weeks
preceding the date on which notice of the sale required under Rule 144 was
filed. Sales under Rule 144 are also subject to certain provisions relating to
the manner and notice of sale and availability of current public information
about us.

Affiliates must comply with the requirements of Rule 144, including the
one-year holding period requirement, to sell shares of common stock that are
restricted securities. Furthermore, if a period of at least two years has
elapsed from the date restricted securities were acquired from us or an
affiliate, a holder of restricted securities who is not an affiliate at the
time of the sale and has not been an affiliate at any time during the three
months prior to the sale would be entitled to sell the shares without regard to
the volume limitation and other conditions described above.

The shares of common stock authorized for issuance pursuant to options
that may be granted under the Award Plan may be either authorized but unissued
shares or treasury shares obtained by us through market or private purchases.
See "Executive Compensation--BlackRock, Inc. 1999 Stock Award and Incentive
Plan." We intend to register under the Securities Act the shares of common
stock issuable upon the exercise of options granted pursuant to the Award Plan.

Prior to the offerings, there has been no public market for the common
stock. Although we can make no prediction as to the effect, if any, that sales
of shares of common stock by PNC and our other existing stockholders would have
on the market price prevailing from time to time, sales of substantial amounts
of common stock or the availability of the shares for sale could adversely
affect prevailing market prices.

All of our executive officers, directors and stockholders have entered
into contractual "lock-up" agreements, providing that subject to certain
limited exceptions they will not during the period of 180 days from the date of
this prospectus, without the prior written consent of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, directly or indirectly:

. 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 for the sale of or otherwise transfer or
dispose of, any class B common stock or any securities convertible
into or exercisable or exchangeable for class B common stock,
whether now owned or subsequently acquired or to

78
<PAGE>

which officers, directors and stockholders have or later acquire
the power of disposition, or file any registration statement under
the Securities Act with respect to any of the foregoing; or

. enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the class B common stock in
each case, whether the swap or transaction is settled by delivery
of class B common stock or other securities, in cash or otherwise.

As a result of contractual restrictions, notwithstanding possible
earlier eligibility for sale under the provisions of Rule 144 promulgated
under the Securities Act, which are summarized above, shares subject to lock-
up agreements will not be saleable until the agreements expire.

We have agreed subject to certain limited exceptions not to, during the
period of 180 days from the date of this prospectus, without the prior written
consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, directly or
indirectly:

. 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 or otherwise transfer or
dispose of, any class B common stock or any securities convertible
into or exercisable or exchangeable for class B common stock or
file any registration statement under the Securities Act with
respect to any of the foregoing; or

. enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the class B common stock;

in each case, whether the swap or transaction is settled by delivery of class
B common stock or other securities, in cash or otherwise. However, we may:

. grant stock options or stock awards under our existing benefit and
compensation plans as referred to in the prospectus;

. issue shares of class B common stock upon the exercise of options,
warrants or rights or the conversion of currently outstanding
securities as referred to in the prospectus;

. issue shares of class B common stock pursuant to any non-employee
director stock plan or dividend reinvestment plan; and

. issue, offer and sell shares of class A common stock or securities
convertible, exercisable or exchangeable into shares of class B
common stock in transactions not involving a public offering in
consideration for the acquisition of stock or assets of other
companies or the services of employees newly hired by us, so long
as in each case each recipient of the securities agrees in writing
to be bound by the restrictions outlined above.

79
<PAGE>

UNDERWRITING

General

We intend to offer our common stock in the United States and Canada
through a number of U.S. underwriters as well as through international
managers. Merrill Lynch, Pierce, Fenner & Smith Incorporated , Goldman, Sachs &
Co., Lehman Brothers Inc., Prudential Securities Incorporated and Salomon Smith
Barney Inc. are acting as U.S. Representatives of each of the U.S. underwriters
named below. Subject to the terms and conditions described in a U.S. purchase
agreement among BlackRock and the U.S. underwriters, and concurrently with the
sale of shares of class A common stock to the international managers, we
have agreed to sell to the U.S. underwriters, and each of the U.S. underwriters
severally and not jointly has agreed to purchase from BlackRock, the number of
shares of class A common stock listed opposite its name below.

<TABLE>
<CAPTION>
Number of
U.S. Underwriters Shares
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................................
Goldman, Sachs & Co. ..........................................
Lehman Brothers Inc. ..........................................
Prudential Securities Incorporated.............................
Salomon Smith Barney Inc. .....................................
------
Total.................................................
======
</TABLE>

We have has also entered into an international purchase agreement with
international managers outside the United States and Canada for whom Merrill
Lynch International, Goldman Sachs International, Lehman Brothers International
(Europe), Prudential-Bache Securities (U.K.) Inc. and Salomon Brothers
International Limited are acting as lead managers. Subject to the terms and
conditions described in the international purchase agreement, and concurrently
with the sale of shares of class A common stock to the U.S. underwriters
pursuant to the U.S. purchase agreement, we have agreed to sell to the
international managers, and the international managers severally have agreed to
purchase from us, an aggregate of shares of class A common stock. The
initial public offering price per share and the total underwriting discount per
share of class A common stock are identical under the U.S. purchase agreement
and the international purchase agreement.

In the U.S. purchase agreement and the international purchase agreement,
the U.S. underwriters and the international managers have agreed, subject to
the terms and conditions in those agreements, to purchase all of the shares of
class A common stock being sold under the terms of those agreements if any of
the shares of class A common stock are purchased. In the event of a default by
an underwriter, the U.S. purchase agreement and the international purchase
agreement provide that the purchase commitments of the nondefaulting
underwriters may be increased or the purchase agreements may be terminated. The
closings with respect to the sale of shares of class A common stock to be
purchased by the U.S. underwriters and the international managers are
conditioned on one another.

We have agreed to indemnify the U.S. underwriters and the international
managers against liabilities under the securities laws arising out of or based
upon untrue statements of material facts or material omissions contained in the
registration statement or the prospectus. We have also agreed to contribute to
payments that the U.S. underwriters and the international managers may be
required to make in respect of those liabilities.

Commitments and Discounts

The U.S. representatives have advised us that the U.S. underwriters
propose initially to offer the shares of class A common stock to the public at
the initial public offering price listed on the cover page of this prospectus,
and to dealers at such price less a concession not in excess of $ per share
of class A common stock. The U.S. underwriters may allow, and such dealers may
reallow, a discount not in excess of $ per share of class A common stock to
other dealers. After the initial public offerings, the public offering price,
concession and discount may be changed.

80
<PAGE>

The following table shows the per share and total public offering price,
underwriting discount to be paid by us to the U.S. underwriters and the
international managers and the proceeds before expenses to us. This information
is presented assuming either no exercise or full exercise by the U.S.
underwriters and the international managers of their over-allotment options.

<TABLE>
<CAPTION>
Without With
Per Share Option Option
--------- ------- -------
<S> <C> <C> <C>
Public offering price........................... $ $ $
Underwriting discount........................... $ $ $
Proceeds, before expenses, to BlackRock......... $ $ $
</TABLE>

The expenses of the offerings are estimated as follows: SEC registration
fee, $51,791; NASD fee, $19,100; listing fee, $115,000; accounting fees and
expenses, $750,000; legal fees and expenses, $1,100,000; printing and engraving
fees and expenses, $375,000; transfer agent's fees, $25,000; blue sky fees and
expenses, including counsel fees, $10,000; and miscellaneous expenses, $22,989.
The total expenses, not including the underwriting discount, are estimated at
$2,468,880 and are payable by us.

Intersyndicate Agreement

The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Under the terms of the intersyndicate agreement, the U.S.
underwriters and the international managers are permitted to sell shares of our
class A common stock to each other for purposes of resale at the initial public
offering price, less an amount not greater than the selling concession. Under
the terms of the intersyndicate agreement, the U.S. underwriters and any dealer
to whom they sell shares of our class A common stock will not offer to sell or
sell shares of our class A common stock to persons who are non-U.S. or non-
Canadian persons or to persons they believe intend to resell to persons who are
non-U.S. or non-Canadian persons, except in the case of transactions under the
terms of the intersyndicate agreement. Similarly, the international managers
and any dealer to whom they sell shares of our class A common stock will not
offer to sell or sell shares of our class A common stock to U.S. persons or to
Canadian persons or to persons they believe intend to resell to U.S. or
Canadian persons, except in the case of transactions pursuant to the
intersyndicate agreement.

Over-allotment Option

We have granted an option to the U.S. underwriters, exercisable for 30
days after the date of this prospectus, to purchase up to additional shares
of class A common stock at the public offering price listed on the cover page
of this prospectus, less the underwriting discount. The U.S. underwriters may
exercise this option solely to cover over-allotments, if any, made on the sale
of the class A common stock. To the extent that the U.S. underwriters exercise
this option, each U.S. underwriter will be obligated, subject to customary
conditions, to purchase a number of additional shares of our class A common
stock proportionate to such U.S. underwriter's initial amount reflected in the
above table.

We have also granted an option to the international managers, exercisable
for 30 days after the date of this prospectus, to purchase up to additional
shares of class A common stock to cover over-allotments, if any, on terms
similar to those granted to the U.S. underwriters.

Reserved Shares

81
<PAGE>

shares which are not orally confirmed for purchase within one day of the
pricing of the offerings will be offered by the underwriters to the general
public on the same basis as the other shares offered by this prospectus.

No Sales of Similar Securities

BlackRock and its executive officers and directors and all existing
stockholders will agree prior to the offering, not to sell or transfer any of
their shares of class B common stock for 180 days after the date of the
prospectus unless they first obtain the written consent of Merrill Lynch. In
particular, BlackRock and all of these persons have agreed that they will not,
subject to limited exceptions, directly or indirectly:

. offer, pledge, sell or contract to sell any of the class B common
stock,

. sell any option or contract to purchase the class B common stock,

. purchase any option or contract to sell the class B common stock,

. grant any option, right or warrant for the sale of the class B common
stock,

. request or demand that BlackRock file a registration statement
related to the class B common stock, or

. enter into any agreement or transaction that transfers all or any
part of the ownership of the class B common stock.

This lockup provision applies to class B common stock as well as any
securities which are convertible into or exchangeable or exercisable for class
B common stock. The provision applies to class B common stock currently held as
well as class B common stock acquired in the future.

However, a stockholder may without the consent of Merrill Lynch transfer
the shares of common stock to trusts or similar entities for estate planning
purposes or to affiliates as defined in Rule 144 as long as any transferee
agrees in writing to be bound by the terms of the lockup agreement. See "Shares
Eligible for Future Sale."

New York Stock Exchange Listed

The class A common stock has been approved for listing on the New York
Stock Exchange under the symbol "BLK." In order to meet the requirements for
listing of the class A common stock on that exchange, the U.S. underwriters and
the international managers have undertaken to sell lots of 100 or more shares
to a minimum of 2,000 beneficial owners.

Initial Public Offering Price

Prior to the offerings, there has been no public market for the class A
common stock. The initial public offering price will be determined through
negotiations between BlackRock and the representatives. The factors considered
in determining the initial public offering price, in addition to prevailing
market conditions, are

. price-earnings ratios of publicly traded companies that the
representatives believe to be comparable to BlackRock,

. financial information of BlackRock,

. the history of, and the prospects for, BlackRock and the industry in
which it competes, or

. an assessment of its management, its past and present operations, the
prospects for, and timing of, future revenue of BlackRock, and the
present state of its development.

An active trading market may not develop for the class A common stock and
the class A common stock may not trade in the public market subsequent to the
offerings at or above the initial public offering price.

The underwriters do not expect sales of the class A common stock to any
accounts over which they exercise discretionary authority to exceed 5% of the
number of shares being offered in these offerings.

82
<PAGE>

NASD Regulations

Because we are an affiliate of J.J.B. Hilliard, W.L. Lyons Inc., a
participant in these offerings, and other non-participating PNC subsidiaries
that are member firms of the NASD, the offerings will be conducted in
accordance with Conduct Rule 2720 of the National Association of Securities
Dealers, Inc. This rule requires that the public offering price of an equity
security be no higher than the price recommended by a qualified independent
underwriter which has participated in the preparation of the registration
statement and performed its usual standard of due diligence. Merrill Lynch has
agreed to act as qualified independent underwriter with respect to the
offerings. The public offering price of the class A common stock will be no
higher than that recommended by Merrill Lynch.

The underwriters will not confirm sales of the class A common stock to
any account over which they exercise discretionary authority without the prior
written specific approval of the customer.

We are under common control with Hilliard Lyons which will participate as
a member of the underwriting syndicate. Hilliard Lyons may act as broker or
dealer for its customers and others and may perform other services for which it
may receive customary compensation.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of our class A common stock is completed, SEC
rules may limit the ability of the underwriters and certain selling group
members to bid for and purchase our class A common stock. As an exception to
these rules, the U.S. representatives are permitted to engage in transactions
that stabilize the price of our class A common stock. Such transactions consist
of bids or purchases for the purpose of pegging, fixing or maintaining the
price of our class A common stock.

If the underwriters create a short position in the class A common stock
in connection with the offerings, i.e., if they sell more shares of our class A
common stock than are listed on the cover page of this prospectus, the U.S.
representatives may reduce that short position by purchasing our class A common
stock in the open market. The U.S. representatives may also elect to reduce any
short position by exercising all or part of the over-allotment options
described above.

The U.S. representatives may also impose a penalty bid on underwriters
and selling group members. This means that if the U.S. representatives purchase
shares of our class A common stock in the open market to reduce the
underwriters' short position or to stabilize the price of our class A common
stock, they may reclaim the amount of the selling concession from the
underwriters and selling group members who sold those shares.

In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of the our A common stock to the
extent that it discourages resale of our class A common stock.

Neither BlackRock nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our class A common stock. In addition,
neither BlackRock nor any of the underwriters makes any representation that the
U.S. representatives or the lead manager will engage in such transactions or
that such transactions, once commenced, will not be discontinued without
notice.

Other Relationships

Certain of the underwriters and their affiliates engage in transactions
with, and perform services for, BlackRock, PNC and their affiliates in the
ordinary course of business and have engaged, and may in the future engage, in
commercial banking and investment banking transactions with BlackRock for which
they receive customary compensation. Merrill Lynch, Prudential Securities and
its affiliated parties and Salomon Smith Barney distribute BlackRock Funds and
provide stockholder services in connection with those funds in the ordinary
course of business, for which they receive customary compensation.

83
<PAGE>

MATERIAL UNITED STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-
U.S. HOLDERS OF CLASS A COMMON STOCK

The following is a general summary of the material United States federal
income and estate tax consequences of the purchase, ownership, and sale or
other taxable disposition of the class A common stock by any person or entity
(a "non-U.S. Holder") other than:

. a citizen or resident of the United States;

. a partnership, corporation or other entity created or organized
in or under the laws of the United States or of any political
subdivision thereof;

. a trust, if a court within the United States is able to
exercise primary supervision over the administration of the
trust and one or more United States persons have the authority
to control all substantial decisions of the trust or the trust
has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. Person; or

. an estate, the income of which is includible in gross income
for United States federal income tax purposes regardless of its
source.
This summary does not address all tax considerations that may be relevant to
non-U.S. Holders in light of their particular circumstances or to certain non-
U.S. Holders that may be subject to special treatment under United States
federal income or estate tax laws. This summary is based upon the Internal
Revenue Code, existing, temporary and proposed regulations promulgated
thereunder and administrative and judicial decisions, all of which are subject
to change, possibly with retroactive effect. In addition, this summary does not
address the effect of any state, local or foreign tax laws. Each prospective
purchaser of class A common stock should consult its tax advisor with respect
to the tax consequences of purchasing, owning and disposing of the class A
common stock.

Dividends

Dividends paid to a non-U.S. Holder of class A common stock generally
will be subject to a withholding of United States federal income tax at a 30
percent rate or such lower rate as may be specified by an applicable income tax
treaty unless:

. the dividend is effectively connected with the conduct of a
trade or business of the non-U.S. Holder within the United
States; or

. if a tax treaty applies, it is attributable to a United States
permanent establishment of the non-U.S. Holder,

in which cases the dividend will be taxed at ordinary federal income tax rates.
If the non-U.S. Holder is a corporation, such effectively connected income may
also be subject to an additional "branch profits tax."A non-U.S. Holder may be
required to satisfy certain certification requirements in order to claim treaty
benefits or otherwise claim a reduction of, or exemption from, the withholding
described above.

Sale or Other Disposition of Class A Common Stock

A non-U.S. Holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of class A common stock unless:

. the gain is effectively connected with the conduct of a trade
or business of the non-U.S. Holder within the United States;

. in the case of a non-U.S. Holder who is an individual and holds
the class A common stock as a capital asset, the holder is
present in the United States for 183 or more days in the
taxable year of the sale or other taxable disposition and
certain other tests are met;

84
<PAGE>

. the non-U.S. Holder is subject to tax pursuant to the
provisions of United States federal income tax law applicable
to certain United States expatriates; or

. BlackRock is or has been during certain periods preceding the
sale or other taxable disposition a United States real property
holding corporation ("USRPHC") for United States federal income
tax purposes and certain other requirements are met. BlackRock
currently believes that it is not a USRPHC and anticipates that
it will not become a USRPHC.

Estate Tax

Class A common stock owned or treated as owned by an individual non-U.S.
Holder at the time of death will be includible in the individual's gross estate
for United States federal estate tax purposes, unless an applicable treaty
provides otherwise, and may be subject to United States federal estate tax.

Backup Withholding and Information Reporting

Dividends. United States backup withholding tax generally will not apply
to dividends paid on the class A common stock that are subject to the 30
percent or reduced treaty rate of United States withholding tax previously
discussed. BlackRock must report annually to the Internal Revenue Service and
to each non-U.S. Holder the amount of dividends paid to, and the tax withheld
with respect to, such holder, regardless of whether any tax was withheld. This
information may also be made available to the tax authorities in the non-U.S.
Holder's country of residence.

Sale or Other Disposition of Common Stock. Upon the sale or other taxable
disposition of class A common stock by a non-U.S. Holder to or through a United
States office of a broker, the broker must backup withhold at a rate of 31
percent and report the sale to the Internal Revenue Service, unless the holder
certifies its non-U.S. Holder status under penalties of perjury or otherwise
establishes an exemption. Upon the sale or other taxable disposition of class A
common stock by a non-U.S. Holder to or through the foreign office of a United
States broker, or a foreign broker with a certain relationship to the United
States, the broker must report the sale to the Internal Revenue Service (but
not backup withhold) unless the broker has documentary evidence in its files
that the seller is a non-U.S. Holder and certain other conditions are met or
the holder otherwise establishes an exemption.

Backup withholding is not an additional tax. Amounts withheld under the
backup withholding rules generally are allowable as a refund or credit against
a non-U.S. Holder's United States federal income tax liability, if any,
provided that the required information is furnished to the Internal Revenue
Service on a timely basis.

The U.S. Treasury Department has issued regulations generally effective
for payments made after December 31, 2000 that will affect the procedures to be
followed by a non-U.S. Holder in establishing such holder's status as a non-
U.S. Holder for purposes of the withholding, backup withholding and information
reporting rules described herein. In general, such regulations do not
significantly alter the substantive withholding and information reporting
requirements, but unify current certification procedures and forms and clarify
reliance standards. Prospective investors should consult their tax advisors
concerning the effect of such regulations on an investment in the class A
common stock.

85
<PAGE>

LEGAL MATTERS

Legal matters with respect to the validity of the shares of the class A
common stock offered hereby will be passed upon for us by Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York. Legal matters relating to the class A
common stock will be passed upon for the underwriters by Simpson Thacher &
Bartlett, New York, New York. Simpson Thacher & Bartlett has from time to time
in the past and may in the future provide services to BlackRock and its
affiliates for which it has or will receive customary compensation.

EXPERTS

The consolidated financial statements of BlackRock at December 31, 1997
and 1998, and for each of the three years in the period ended December 31, 1998
appearing in this prospectus and registration statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing. Ernst &
Young LLP also serve as PNC's independent auditors.

WHERE YOU CAN FIND MORE INFORMATION

After the offerings, we will be subject to the reporting requirements of
the Securities Exchange Act of 1934 and as a result we will file reports, proxy
statements and other information with the SEC. Our SEC filings will be
available over the internet at the SEC's web site at http://www.sec.gov. You
may also read, without charge, or copy, at prescribed rates, any document we
file at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges. You may also
inspect our SEC reports and other information at The New York Stock Exchange,
20 Broad Street, New York, New York 10005.

We have filed a registration statement on Form S-1 with the SEC covering
the class A common stock. For further information on us and the class A common
stock, you should refer to our registration statement and its exhibits. This
prospectus summarizes material provisions of contracts and other documents to
which we refer you. Since the prospectus may not contain all the information
that you may find important, you should review the full text of these
documents. We have included copies of these documents as exhibits to our
registration statement.

We intend to furnish to our stockholders annual reports containing
audited consolidated financial statements and quarterly reports for the first
three quarters of each fiscal year containing unaudited interim financial
information.

86
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents

<TABLE>
<S> <C>
Report of Independent Auditors.............................................. F-2
Consolidated Statements of Financial Condition.............................. F-3
Consolidated Statements of Income........................................... F-4
Consolidated Statements of Changes in Stockholders' Equity.................. F-6
Consolidated Statements of Cash Flows....................................... F-7
Notes to Consolidated Financial Statements.................................. F-8
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
BlackRock, Inc.

We have audited the accompanying consolidated statements of financial
condition of BlackRock, Inc. as of December 31, 1997 and 1998, and the
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of BlackRock's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of BlackRock, Inc. at December 31, 1997 and 1998, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

New York, New York
February 26, 1999

F-2
<PAGE>

BLACKROCK, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar amounts in thousands, except share data)

<TABLE>
<CAPTION>
December 31, June 30,
------------------- -----------
1997 1998 1999
--------- --------- -----------
(unaudited)
<S> <C> <C> <C>
Assets
Cash and cash equivalents..................... $ 69,085 $ 113,450 $ 76,262
Accounts receivable
Advisory and administration fees............ 28,632 47,611 47,565
BlackRock Asset Investors (BAI)............. 7,214 58,599 54,447
Investments (cost: $5,891 in 1997, $2,349 in
1998 and $2,329 in 1999)..................... 5,915 2,515 2,306
Property and equipment, net................... 7,037 12,252 16,737
Goodwill (less accumulated amortization of
$27,309 in 1997, $36,962 in 1998 and $41,788
in 1999)..................................... 213,563 203,910 199,084
Receivable from affiliate..................... 1,868 446 1,427
Other assets.................................. 2,193 2,001 5,424
--------- --------- --------
Total assets.................................. $ 335,507 $ 440,784 $403,252
========= ========= ========
Liabilities and stockholders' equity
Note and loan payable to affiliates........... 225,232 197,000 153,200
Accrued compensation
Employees................................... 40,424 65,523 49,116
BAI incentive compensation.................. 8,308 44,806 41,349
Accounts payable and accrued liabilities
Affiliate................................... 7,926 16,478 19,079
Other....................................... 5,053 7,627 7,522
Accrued interest payable to affiliates........ 1,658 1,175 705
Other liabilities............................. 1,943 1,984 203
--------- --------- --------
Total liabilities............................. 290,544 334,593 271,174
--------- --------- --------
Stockholders' equity
Common stock, no par value, 400,000 shares
authorized; 164,000, 199,300 and 199,300
shares outstanding, respectively........... -- -- --
Additional paid--in capital................. 15,091 53,105 53,105
Retained earnings........................... 29,872 53,286 79,272
Unrealized loss on investments, net......... -- -- (99)
Treasury stock, at cost, 207 shares........... -- (200) (200)
--------- --------- --------
Total stockholders' equity.................... 44,963 106,191 132,078
--------- --------- --------
Total liabilities and stockholders' equity.... $ 335,507 $ 440,784 $403,252
========= ========= ========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>

BLACKROCK, INC.

CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except share data)

<TABLE>
<CAPTION>
Six months ended
Year Ended December 31, June 30,
---------------------------- ------------------
1996 1997 1998 1998 1999
-------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Revenue
Investment advisory and
administration fees
Mutual funds.............. $ 87,189 $117,977 $162,487 $ 67,403 $ 99,637
Separate accounts......... 43,069 62,985 101,352 42,376 71,569
BAI....................... 6,061 13,867 61,199 15,761 (2,054)
Other income
Affiliate................. 3,000 3,000 3,000 1,500 2,500
Other..................... 7,159 7,644 11,444 4,213 8,441
-------- -------- -------- -------- --------
Total revenues.............. 146,478 205,473 339,482 131,253 180,093
-------- -------- -------- -------- --------
Expenses
Employee compensation and
benefits................... 53,703 73,217 109,741 50,845 65,964
BAI incentive compensation.. 3,525 9,688 44,806 10,332 (1,494)
Fund administration and
servicing costs--
affiliates................. 19,611 27,278 52,972 15,656 36,334
General and administration
Affiliate................. 7,559 3,900 4,666 2,338 2,745
Other..................... 16,941 25,864 34,030 14,296 21,091
Amortization of goodwill.... 9,603 9,653 9,653 4,826 4,826
Closed-end fund offering
costs...................... -- -- 4,252 -- --
-------- -------- -------- -------- --------
Total expenses.............. 110,942 149,600 260,120 98,293 129,466
-------- -------- -------- -------- --------
Operating income............ 35,536 55,873 79,362 32,960 50,627
Non-operating income
(expense)
Interest and dividend
income..................... 1,877 3,117 1,995 1,066 1,293
Interest expense--
affiliates................. (19,975) (20,249) (13,347) (7,582) (7,121)
-------- -------- -------- -------- --------
(18,098) (17,132) (11,352) (6,516) (5,828)
-------- -------- -------- -------- --------
Income before income taxes.. 17,438 38,741 68,010 26,444 44,799
Income taxes................ 8,475 16,655 32,395 12,596 18,813
-------- -------- -------- -------- --------
Net income.................. $ 8,963 $ 22,086 $ 35,615 $ 13,848 $ 25,986
======== ======== ======== ======== ========
Earnings per share
Basic..................... $ 183.04 $ 130.39
======== ========
Diluted................... $ 182.44 $ 129.97
======== ========
Weighted average shares
outstanding
Basic..................... 194,578 199,300
======== ========
Diluted................... 195,215 199,937
======== ========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>

BLACKROCK, INC.

CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Dollar amounts in thousands, except share data)

<TABLE>
<CAPTION>
Year ended Six months ended
December 31, 1998 June 30, 1999
----------------- ----------------
<S> <C> <C>
Unaudited pro forma data
Income before income taxes, as reported.. $ 68,010 $ 44,799
Pro forma interest adjustment for debt
repayment............................... 9,658 5,000
Pro forma income taxes................... 37,514 21,231
----------- -----------
Pro forma net income..................... $ 40,154 $ 28,568
=========== ===========
Unaudited pro forma net income per share
Basic.................................... .75 .52
Diluted.................................. .75 .52
Unaudited pro forma weighted average shares
outstanding
Basic.................................... 53,507,051 54,807,482
Diluted.................................. 53,682,203 54,982,635
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>

BLACKROCK, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollar amounts in thousands)

<TABLE>
<CAPTION>
Additional Unrealized Total
Paid-In Retained Loss on Treasury Stockholders'
Capital Earnings Securities Stock Equity
---------- -------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
December 31, 1995....... $15,091 $ 7,698 $ -- $ -- $ 22,789
Net Income............ -- 8,963 -- -- 8,963
Forgiveness of
intercompany
allocations.......... -- 920 -- -- 920
------- -------- ----- ----- --------
December 31, 1996....... 15,091 17,581 -- -- 32,672
Net income............ -- 22,086 -- -- 22,086
Dividend of
intercompany
allocations.......... -- (9,795) -- -- (9,795)
------- -------- ----- ----- --------
December 31, 1997....... 15,091 29,872 -- -- 44,963
Net income............ -- 35,615 -- -- 35,615
Dividends to PNC...... -- (12,300) -- -- (12,300)
Issuance of restricted
stock................ 35,951 -- -- -- 35,951
Purchase of treasury
stock................ -- -- -- (200) (200)
Forgiveness of
intercompany
allocations.......... -- 99 -- -- 99
Capital contribution
from PNC............. 2,063 -- -- -- 2,063
------- -------- ----- ----- --------
December 31, 1998....... 53,105 53,286 -- (200) 106,191
Net income
(unaudited).......... -- 25,986 -- -- 25,986
Unrealized loss on
investments
(unaudited).......... -- -- (99) -- (99)
------- -------- ----- ----- --------
June 30, 1999
(unaudited)............ $53,105 $ 79,272 $ (99) $(200) $132,078
======= ======== ===== ===== ========
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>

BLACKROCK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)

<TABLE>
<CAPTION>
Six months
Year ended December 31, ended June 30,
--------------------------- ------------------
1996 1997 1998 1998 1999
------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities
Net income................... $ 8,963 $ 22,086 $ 35,615 $ 13,848 $ 25,986
Adjustments to reconcile net
income to net cash provided
from (used in) operating
activities:
Depreciation and
amortization.............. 11,700 12,151 12,852 6,217 9,455
Discount on issuance of
restricted stock.......... -- -- 1,737 1,737 --
Changes in operating assets
and liabilities:
Decrease (increase) in
accounts receivable..... (9,204) (7,484) (70,364) (19,598) 4,198
Decrease (increase) in
receivable from
affiliate............... (1,487) (325) 1,422 1,844 (981)
Decrease (increase) in
other assets............ (1,019) (358) 192 (583) (3,423)
Increase (decrease) in
accrued compensation.... 10,424 16,723 61,597 (7,322) (19,864)
Increase in accounts
payable and accrued
liabilities............. 2,282 6,516 11,126 8,891 2,496
(Decrease) in accrued
interest payable to
affiliates.............. (3,419) (536) (483) (291) (470)
Increase (decrease) in
other liabilities....... (317) (1,578) 41 365 (1,781)
------- -------- -------- -------- --------
Cash provided from operating
activities.................. 17,923 47,195 53,735 5,108 15,616
------- -------- -------- -------- --------
Cash flows from investing
activities
Purchases of property and
equipment................... (4,155) (2,165) (8,414) (2,300) (9,114)
(Purchase)/sale of
investments................. 474 (790) 3,400 2,053 110
------- -------- -------- -------- --------
Cash used by investing
activities.................. (3,681) (2,955) (5,014) (247) (9,004)
------- -------- -------- -------- --------
Cash flows from financing
activities
Net borrowings
from/(repayment of) note and
loan payable to affiliates.. 19,876 (30,627) (28,232) (59,671) (43,800)
Issuance of restricted
stock....................... -- -- 34,214 34,214 --
Capital contribution from
PNC......................... -- -- 2,063 2,063 --
Purchase of treasury stock... -- -- (200) (200) --
Forgiveness of intercompany
allocations................. 920 -- 99 -- --
Dividend of intercompany
allocations................. -- (9,795) -- (1,894) --
Dividends to PNC............. -- -- (12,300) (12,300) --
------- -------- -------- -------- --------
Cash provided by (used in)
financing activities........ 20,796 (40,422) (4,356) (37,788) (43,800)
------- -------- -------- -------- --------
Net increase (decrease) in
cash and cash equivalents... 35,038 3,818 44,365 (32,927) (37,188)
Cash and cash equivalents,
beginning of period......... 30,229 65,267 69,085 69,085 113,450
------- -------- -------- -------- --------
Cash and cash equivalents,
end of period............... $65,267 $ 69,085 $113,450 $ 36,158 $ 76,262
======= ======== ======== ======== ========
Supplemental disclosures
Cash paid for interest....... $28,239 $ 20,780 $ 13,683 $ 6,891 $ 7,591
======= ======== ======== ======== ========
Cash paid for income taxes... $ 2,759 $ 4,730 $ 25,983 $ 7,906 $ 16,889
======= ======== ======== ======== ========
</TABLE>

See notes to consolidated financial statements.

F-7
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1996, 1997 and 1998
(Dollar amounts in thousands)

1. Significant Accounting Policies

Organization and Basis of Presentation

BlackRock, Inc. ("BlackRock" or "Company") is majority owned by PNC Bank
Corp. ("PNC") through its wholly-owned subsidiary PNC Bank, N.A. The
consolidated financial statements of BlackRock include the assets, liabilities
and earnings of its wholly-owned subsidiaries BlackRock Advisors Inc. ("BA"),
BlackRock Institutional Management Corporation ("BIMC"), Provident Advisors,
Inc. ("PAI"), BlackRock Financial Management, Inc. ("BFM") and BlackRock
International, Ltd. ("BI") and their subsidiaries. BlackRock and its
consolidated subsidiaries provide diversified investment management services to
institutional clients, including certain subsidiaries and affiliates of PNC,
and to retail investors through various investment vehicles. The institutional
investment management business primarily consists of the active management of
fixed income and equity client accounts and the management of the Provident
Institutional Funds, a money market mutual fund family serving the
institutional market. The individual investor services business primarily
consists of the management of the Company's sponsored open and closed-end
mutual funds. BA, BIMC, BFM and BI are registered investment advisers under the
Investment Advisers Act of 1940 while PAI is a registered broker-dealer.

The consolidated financial statements of BlackRock reflect the "carved
out" historical financial position, results of operations, cash flows and
changes in stockholders' equity of the asset management businesses of PNC which
were consolidated under BlackRock in 1998 as if the combined operations had
been a separate entity prior to the formation of BlackRock. The consolidated
statement of operations has been adjusted to reflect an allocation of certain
expenses, primarily relating to office rent and overhead charges for various
administrative functions provided by PNC. The allocations were required to
reflect all costs of doing business and have been based on various methods
which management believes results in reasonable allocations of such costs. The
intercompany allocations and other adjustments related to the carve out which
were not paid or received by BlackRock are reflected in BlackRock's
consolidated statements of changes in stockholders' equity as dividend or
forgiveness of intercompany allocations.

The consolidated financial statements reflect the results of operations
of BlackRock Financial Management, LP and BFM Advisory LP, which were acquired
by PNC on February 28, 1995. Total consideration for the acquisition was $240
million, of which $71 million was paid in cash at closing with the remaining
$169 million comprising unsecured debt, ultimately payable to the BFM partners
and recorded on the books of BFM. Goodwill recognized at acquisition
approximated $240 million.

Significant intercompany accounts and transactions between the
consolidated entities have been eliminated.

The unaudited interim consolidated financial statements of BlackRock
included herein have been prepared in accordance with generally accepted
accounting principles for interim financial information and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the unaudited interim
consolidated financial statements reflect all adjustments, which are of a
normal recurring nature, necessary for a fair presentation of financial
position, results of operations and cash flows of BlackRock for the interim
periods presented and are not necessarily indicative of a full year's results.

In preparing the unaudited interim consolidated financial statements,
management is required to make estimates and assumptions that affect the
amounts reported in the financial statements. Actual results could differ from
those estimates.

F-8
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

1. Significant Accounting Policies (continued)

Formation Transactions

BlackRock was formed in 1998 as a result of PNC's decision to consolidate
a substantial portion of its investment management businesses under a common
management and brand (BlackRock). Prior to the formation, on January 31, 1998,
PNC sold, pursuant to a private placement under the Securities Act of 1933, as
amended (the "Securities Act"), 30,000 shares of restricted BFM stock to
certain key employees and PNC retained 70,000 shares. The purchase price for
the stock was based on an independent valuation of BFM, with the shares subject
to significant vesting and transfer restrictions.

On March 31, 1998, PNC contributed BFM and certain other investment
management subsidiaries into a new holding company, BlackRock. BFM's employee
stockholders exchanged their stock in BFM for an equal number of restricted
shares in BlackRock while PNC received 70,000 shares of BlackRock for its
ownership interest in BFM and an additional 94,000 shares representing the fair
value based on an independent valuation of PNC's other contributed investment
management businesses.

In May 1998, BlackRock sold an additional 5,507 shares of restricted
stock pursuant to a private placement under the Securities Act to key employees
of the contributed businesses. BlackRock also executed forward sales of 637
shares of Company restricted stock to key employees. During the year, one
employee stockholder terminated his employment and sold 207 shares back to
BlackRock at cost.

At December 31, 1998, there were 199,300 common shares of BlackRock
outstanding including 164,000 (82.3%) owned by PNC and 35,300 (17.7%) owned by
employees. Total proceeds from employee purchases of restricted stock amounted
to $34,214. These shares were issued at a discount to fair market value of
$1,737, which was recorded as compensation expense.

Use of Estimates

The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and short-term, highly liquid
investments with original maturities of three months or less. Cash and cash
equivalents are held at major financial institutions and in money market mutual
funds, to which BlackRock is exposed to market and credit risk.

Investments

Investments consist principally of shares of registered investment
companies and are stated at quoted market values. The resulting unrealized
gains and losses are included in the consolidated statements of income.

F-9
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

1. Significant Accounting Policies (continued)

Revenue Recognition

Investment advisory and administration fees are recognized as the
services are performed. Such fees are primarily based on predetermined
percentages of the market values of the assets under management. Investment
advisory and administration fees are shown net of fees waived pursuant to
expense limitations.

BlackRock also receives performance fees or an incentive allocation from
selected institutional and private placement portfolios based on the returns
for each portfolio taking into consideration realized and unrealized gains and
losses. These performance fees generally are subject to payment only upon
attaining specified return thresholds and may contain other restrictions.

Administration and Servicing Costs

BlackRock incurs certain administration and servicing costs, which are
expensed as incurred, related to mutual funds advised by BlackRock. Such costs
are paid to affiliated companies.

Property and Equipment

Property and equipment is recorded at cost less accumulated depreciation.
Depreciation generally is provided on the straight-line method over an
estimated useful life of five years. Leasehold improvements are amortized using
the straight-line method over their estimated useful lives or lease terms,
whichever is shorter.

Goodwill

Goodwill is amortized by the straight-line method over 25 years.
BlackRock assesses the recoverability of goodwill based on the estimated future
nondiscounted cash flows over the remaining amortization period.

Earnings Per Share

BlackRock has adopted Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share." Basic earnings per common share is calculated by dividing
net income applicable to common stockholders by the weighted average number of
shares of common stock outstanding. Diluted earnings per share is computed
using the treasury stock method. Diluted earnings per common share assumes full
dilution and is computed by dividing net income by the total of the weighted
average number of shares of common stock outstanding and common stock
equivalents.

Business Segments

BlackRock has not presented business segment data in accordance with SFAS
No. 131, "Disclosure about Segments of an Enterprise and Related Information,"
because it operates predominantly in one business segment, the investment
advisory and asset management business.

Recent Accounting Pronouncements

Comprehensive Income

BlackRock has adopted SFAS No. 130, "Reporting Comprehensive Income,"
which requires companies to report all changes in equity during a period,
except those resulting from investments by owners and distributions to owners.
BlackRock has not presented a consolidated statement of comprehensive income
because the amount of "other comprehensive income" is immaterial.

F-10
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Recent Accounting Pronouncements (continued)

Software Costs

BlackRock intends to adopt, effective January 1, 1999, Statement of
Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use." SOP 98-1 requires the capitalization of certain
costs incurred in connection with developing or obtaining software for internal
use. Qualifying software costs will be capitalized and amortized over the
estimated useful life of the software. Software costs currently are expensed as
incurred. Restatement of prior year financial statements is not permitted. The
adoption of SOP 98-1 is not expected to have a material impact on BlackRock's
results of operations or financial position.

Derivative Instruments and Hedging Activities

BlackRock intends to adopt, SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 requires BlackRock to recognize
all financial derivatives, including hedges, at fair value, and all changes in
fair value or cash flow of both the hedge and the hedged item in earnings in
the same period. SFAS 133, as amended by SFAS 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of FASB
Statement No. 133," is required to be adopted for fiscal years beginning after
June 15, 2000.

BlackRock did not enter into any derivative instruments or hedging
activities for the periods covered under the financial statements. The adoption
of SFAS 133 is not expected to have a material impact on BlackRock's results of
operations or financial position.

Disclosure of Fair Value

SFAS No. 107, "Disclosure about Fair Value of Financial Instruments,"
requires disclosure of estimated fair values of certain on- and off-balance
sheet financial instruments. The methods and assumptions are set forth below:

. Cash and cash equivalents, receivables, accounts payable and
accrued liabilities approximate fair value due to the short
maturities.

. The fair value of investments is based on quoted market price.

. The fair value of the unsecured note is based on current rates
offered to BlackRock for debt with a similar remaining maturity
(see Note 3). The revolving line of credit is stated at fair value
as its interest rate is at prime.

2. Property and Equipment

Property and equipment consists of the following:

<TABLE>
<CAPTION>
December 31,
---------------
1997 1998
------- -------
<S> <C> <C>
Office and computer equipment............................. $ 9,392 $13,472
Furniture and fixtures.................................... 4,660 5,792
Leasehold improvements.................................... 2,462 5,207
------- -------
16,514 24,471
Less accumulated depreciation............................. 9,477 12,219
------- -------
Property and equipment, net............................... $ 7,037 $12,252
======= =======
</TABLE>

Depreciation expense amounted to $2,097, $2,498 and $3,199 for the years
ended December 31, 1996, 1997 and 1998, respectively.

F-11
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

3.Note and Loan Payable to Affiliates

BlackRock had the following note and line of credit outstanding:

<TABLE>
<CAPTION>
December 31,
-----------------
1997 1998
-------- --------
<S> <C> <C>
7.5% unsecured note, with interest payable semiannually,
through February 2000.................................. $ 65,800 $ 47,000
Revolving line of credit with PNC Bank, with interest at
prime rate (7.75% at December 31, 1998), maximum
outstanding principal of $175,000 due December 2002.... 159,432 150,000
-------- --------
$225,232 $197,000
======== ========
</TABLE>

The 7.5% unsecured note is unconditionally guaranteed by PNC and is
ultimately payable to certain employees of BlackRock resulting from PNC's
acquisition of BFM on February 28, 1995.

At December 31, 1998, future principal maturities of debt are as follows:

At December 31, 1998, the fair value of BlackRock's 7.5% unsecured note
due through February 2000, estimated based on the current rates offered to
BlackRock for debt with a similar remaining maturity, was approximately
$47,700. The revolving line of credit with PNC is carried at cost which
approximates fair value.

4.Commitments

BlackRock leases its primary office space under agreements which expire
in 2011. Future minimum commitments under these operating leases, net of rental
reimbursements of $959 through 2002 from a sublease arrangement, are as
follows:

<TABLE>
<S> <C>
1999............................................................... $ 4,225
2000............................................................... 3,790
2001............................................................... 3,714
2002............................................................... 1,831
2003............................................................... 1,459
Thereafter......................................................... 3,547
-------
$18,566
=======
</TABLE>

Under the lease agreement, BlackRock is responsible for certain
escalation payments. Equipment and occupancy expense amounted to $6,160, $7,253
and $10,060 for the years ended December 31, 1996, 1997 and 1998, respectively.

F-12
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

5. Employee Benefit Plans

BlackRock's employees participate in PNC's Incentive Savings Plan
("ISP"). Under the ISP, employee contributions of up to 6% of eligible
compensation, subject to Internal Revenue Code limitations, are matched by
BlackRock. ISP expenses for BlackRock were $837, $1,019 and $1,210 for the
years ended December 31, 1996, 1997 and 1998, respectively. Contributions to
the plans are matched primarily by shares of PNC's common stock funded by PNC's
Employee Stock Ownership Plan.

PNC provides certain health care and life insurance benefits for retired
employees. Expenses for post-retirement benefits allocated to BlackRock by PNC
were $114, $105 and $217 for the fiscal years ended December 31, 1996, 1997 and
1998, respectively. At December 31, 1997 and 1998, accrued post-retirement
benefits included in the consolidated statements of financial condition totaled
$311 and $528, respectively. No separate financial obligation data for
BlackRock is available with respect to such plan. BlackRock currently does not
have any retired employees and as such did not make any benefit payments for
retirees in 1997 and 1998.

6. Deferred Compensation Plan

Effective January 1, 1998, BlackRock established the Long-Term
Compensation Plan (the "Plan") to provide a competitive long-term incentive for
key officers and employees. The Plan provides for payment of $18.5 million
divided equally in three separate awards. The awards vest in 2001, 2002 and
2003, respectively, and are recorded to expense on a straight-line method over
the respective vesting periods. Compensation expense for 1998 was $6,321.

7. Related Party Transactions

BlackRock and its consolidated subsidiaries provide investment advisory
and administration services to BlackRock's open-end and closed-end funds, the
Provident Institutional Funds and other commingled funds. Substantially all of
these services are provided under contracts that set forth the services to be
provided and the fees to be charged. Contracts for the Registered Investment
Companies are subject to annual review and approval by each of the funds'
boards of directors or trustees and, in certain circumstances, by the
stockholders.

Revenues for services provided to these mutual funds are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1996 1997 1998
------- -------- --------
<S> <C> <C> <C>
Investment advisory and administration fees--
mutual funds:
BlackRock open-end funds.................... $29,752 $ 44,009 $ 86,225
BlackRock closed-end funds.................. 34,960 36,050 36,521
Provident Institutional Funds............... 13,039 26,266 32,202
Commingled funds............................ 9,438 11,652 7,539
------- -------- --------
$87,189 $117,977 $162,487
======= ======== ========
</TABLE>

During May 1998, approximately $8.2 billion in assets of the PNC common
trust commingled funds were converted to the BlackRock open-end funds. For the
years ended December 31, 1996 and 1997, BlackRock earned fees of $6,443 and
$7,150, respectively, related to these funds. During the first four months of
1998, $3,142 of fees were earned prior to the conversion.

F-13
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

7. Related Party Transactions (continued)

BlackRock provides investment advisory and administration services to
certain PNC subsidiaries for a fee, based on assets under management. In
addition, BlackRock provides risk management and, beginning in 1998, model
portfolio services to PNC. Revenues for such services are as follows:

<TABLE>
<CAPTION>
Year Ended December
31,
--------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Revenues:
Investment advisory and administration fees:
Separate accounts................................ $ 901 $1,496 $3,468
Model portfolio services......................... -- -- 2,567
Other income--risk management...................... 3,000 3,000 3,000
</TABLE>

BlackRock has entered into various memoranda of understanding and co-
administration agreements with affiliates of PNC pursuant to which BlackRock
pays administration fees for the Provident Institutional Funds and certain
other commingled funds based on total fund assets and service fees based on
assets under management for PNC's private banking clients invested in the
BlackRock open-end funds.

BlackRock also incurred interest expense to related parties in connection
with the 7.5% unsecured note and the revolving line of credit with PNC Bank.
PNC also provides general and administration services to BlackRock. Charges for
such services were based on actual usage or on defined formulas which, in
management's view, resulted in reasonable allocations. Aggregate expenses
included in the consolidated financial statements for transactions with PNC
subsidiaries are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Expenses:
Fund administration and servicing costs--
affiliates.................................... $19,611 $27,278 $52,972
General and administration..................... 7,559 3,900 4,666
Interest expense--affiliates................... 19,975 20,249 13,347
</TABLE>

Additionally, an indirect wholly-owned subsidiary of PNC acts as a
financial intermediary associated with the sale of back-end loaded shares of
certain BlackRock open-end funds. This entity finances broker sales commissions
and receives all associated sales charges.

8. BlackRock Asset Investors

BFM is an investment advisor to BlackRock Asset Advisors ("BAI"), a
closed-end investment company. BAI's principal business is to acquire, work
out, pool and repackage performing and distressed commercial, multifamily, and
single family mortgage loans as commercial or residential mortgage-backed
securities for sale in the capital markets through independent underwriters and
broker-dealers.

The Board of Trustees ("Trustees") of BAI approved a plan of liquidation
on September 18, 1997 which was adopted by its stockholders on October 6, 1997.
The plan term runs two years from the stockholder approval date. The plan
requires the trustees to oversee the liquidation. Any remaining assets and
liabilities may be deposited in a voting trust at any time before the end of
the plan term.

F-14
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. BlackRock Asset Investors (continued)

BFM recorded management fees for BAI in 1996, 1997 and 1998 of $6,061,
$6,067 and $3,291, respectively. BFM earned performance fees based on a
stipulated percentage of the excess profits after BAI stockholders had received
a minimum return on invested capital. Based on the market value of BAI's
underlying assets, overall investor returns and anticipated asset liquidation
schedules BlackRock recorded performance fees of $0, $7,800 and $57,908 in
1996, 1997 and 1998, respectively.

In accordance with various contractual arrangements including the 1994
acquisition agreement between PNC and BFM, $3,525, $9,688 and $44,806 of BAI
revenue was allocated to incentive compensation for the years ended December
31, 1996, 1997, and 1998, respectively.

9. Net Capital Requirements

As a registered broker-dealer, PAI is subject to the Uniform Net Capital
requirements under the Securities Exchange Act of 1934, which requires
maintenance of certain minimum net capital levels. At December 31, 1998, PAI
net capital was $3,290 in excess of regulatory requirements.

10. Closed-End Fund Offering Costs

In accordance with SOP 98-5, "Reporting on the Costs of Start-Up
Activities," BlackRock has expensed the offering costs it incurred in
connection with an initial offering of a closed-end fund.

11. Income Taxes

BlackRock accounts for income taxes under the liability method prescribed
by SFAS No. 109, "Accounting for Income Taxes." Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to the
differences between the financial statement carrying amount of existing assets
and liabilities and their respective tax bases.

On a historical basis, the operating results of BlackRock have been
primarily included in the consolidated U.S. Federal income tax returns of PNC
or its subsidiaries. For state and local income tax purposes, BlackRock has
been included in the consolidated and unitary tax returns with PNC and its
subsidiaries, and has filed separate returns. BlackRock's tax provision has
been determined pursuant to the PNC tax sharing agreement.

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
Year Ended December
31,
----------------------
1996 1997 1998
------ ------- -------
<S> <C> <C> <C>
Current:
Federal........................................... $4,434 $11,872 $16,408
State & local..................................... 2,578 3,011 8,746
------ ------- -------
Total current....................................... 7,012 14,883 25,154
Deferred:
Federal........................................... 957 1,159 4,422
State & local..................................... 506 613 2,819
------ ------- -------
Total deferred...................................... 1,463 1,772 7,241
------ ------- -------
Total............................................... $8,475 $16,655 $32,395
====== ======= =======
</TABLE>

F-15
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. Income Taxes (continued)

The reconciliation between the federal statutory income tax rate and
BlackRock's effective income tax rate consists of the following:

<TABLE>
<CAPTION>
Year Ended
December 31,
-----------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Statutory Federal income tax rate........................ 35.0% 35.0% 35.0%
Increase resulting from:
State and local income taxes........................... 11.6% 6.1% 11.1%
Other.................................................. 2.0% 1.9% 1.5%
----- ----- -----
Total effective income tax rate.......................... 48.6% 43.0% 47.6%
===== ===== =====
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities, which are shown net in
accounts payable and accrued liabilities--Affiliate in the consolidated
statement of financial condition, consisted of the following:

<TABLE>
<CAPTION>
December 31,
--------------
1997 1998
------ -------
<S> <C> <C>
Deferred tax assets:
Compensation and benefits................................ $2,355 $31,388
Other.................................................... 2,316 3,606
------ -------
Gross deferred tax asset................................. $4,671 $34,994
====== =======
Deferred tax liabilities:
Deferred revenue......................................... $ -- $33,980
Goodwill................................................. 9,704 13,129
Other.................................................... 4 163
------ -------
Gross deferred tax liability............................. $9,708 $47,272
------ -------
Net deferred tax liability................................. $5,037 $12,278
====== =======
</TABLE>

12. Subsequent Events (Unaudited)

Stock Award and Incentive Plan

The board of directors of BlackRock has adopted the BlackRock, Inc. 1999
Stock Award and Incentive Plan (the "Award Plan"). A maximum of six percent of
the total shares of common stock outstanding have been reserved for issuance
under the Award Plan. Additionally, BlackRock intends to convert, upon the
offering, approximately $19,800,000 of deferred compensation into shares of
restricted class A common stock at the initial offering price. The Company also
intends to adopt a new annual incentive performance plan that will cover
employees selected by the Compensation Committee to participate in the plan.

Pro Forma Information

The unaudited pro forma amounts included in the accompanying pro forma
consolidated statement of income for the year ended December 31, 1998 and the
six months ended June 30, 1999 reflect the use of

F-16
<PAGE>

BLACKROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Offering proceeds to repay outstanding debt as of January 1, 1998, and the
corresponding reduction in interest expense and tax benefit thereon. The
unaudited pro forma consolidated statement of income does not give effect to
the Plan because its terms have not been finalized.

12. Subsequent Events (Unaudited) (continued)

BlackRock intends to file a separate consolidated federal income tax
return after the offerings. BlackRock has not determined whether it will
continue to file combined and/or unitary state and local income tax returns
with PNC and its subsidiaries. BlackRock's income tax provision for the six
months ended June 30, 1999 is computed pursuant to the tax sharing agreement
with PNC. This agreement provides that the federal income tax provision is
based on each subsidiary's separately calculated liability and that the
combined and/or unitary state and local income tax provision is allocated to
those subsidiaries whose business operations generate the liability.

F-17
<PAGE>

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

Through and including (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in these offerings, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

9,000,000 Shares of Class A Common Stock

----------------
PROSPECTUS

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

Merrill Lynch & Co.
Goldman, Sachs & Co.
Lehman Brothers
Prudential Securities
Salomon Smith Barney

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

[International-Alternate Cover Page]
Subject to Completion

Preliminary Prospectus dated September 24, 1999

PROSPECTUS

9,000,000 Shares of Class A Common Stock

----------

The international managers will offer shares outside the United States
and Canada and the U.S. underwriters will offer shares in the United
States and Canada.

We expect the public offering price to be between $14.00 and $17.00 per
share. Currently, no public market exists for the shares. The class A common
stock has been approved for listing on The New York Stock Exchange under the
symbol "BLK."

Following the offering, we will have two classes of authorized common
stock--class A common stock, offered through this prospectus, and class B
common stock, % of which will be owned by a subsidiary of PNC Bank Corp. The
rights of holders of class A common stock and class B common stock are
identical, except with respect to voting. Each share of class A common stock
will have one vote and each share of class B common stock will have five votes
on all matters submitted to a vote of our stockholders. As a result, following
the offerings, PNC will own % of the combined voting power of all classes of
BlackRock stock and will control all matters affecting BlackRock stockholders.

Investing in the class A common stock involves risks which are described in
the "Risk Factors" section beginning on page 9 of this prospectus.

----------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price................................. $ $

Underwriting Discount................................. $ $

Proceeds, before expenses, to BlackRock............... $ $
</TABLE>

The international managers may also purchase up to an additional
shares of class A common stock at the public offering price, less the
underwriting discount, within 30 days from the date of this prospectus to cover
over-allotments. The U.S. underwriters may similarly purchase up to an
aggregate of an additional shares of class A common stock.

The shares of class A common stock will be ready for delivery in New York,
New York on or about , 1999.

----------

Merrill Lynch International
Goldman Sachs International
Lehman Brothers International
Prudential-Bache Securities
Salomon Smith Barney International

----------

The date of this prospectus is , 1999.
<PAGE>

[International-Alternate Page]

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary......................................................... 1
Risk Factors............................................................... 9
Note Regarding Forward-Looking Statements.................................. 16
Use of Proceeds............................................................ 16
Dividend Policy............................................................ 16
Dilution................................................................... 17
Capitalization............................................................. 18
Selected Financial Data.................................................... 19
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................... 23
Business................................................................... 33
Management................................................................. 49
Executive Compensation..................................................... 53
Ownership of the Common Stock.............................................. 60
Certain Relationships and Related Transactions............................. 61
Description of Capital Stock............................................... 68
Shares Eligible for Future Sale............................................ 78
Underwriting............................................................... 80
Material United States Federal Income and Estate Tax Considerations
for Non-U.S. Holders of Class A Common Stock.............................. 85
Legal Matters.............................................................. 87
Experts.................................................................... 87
Where You Can Find More Information........................................ 87
Index to Consolidated Financial Statements................................. F-1
</TABLE>
<PAGE>

[International--Alternate Page] [/R]

UNDERWRITING

General

We intend to offer shares of our class A common stock outside the United
States and Canada through a number of international managers and in the United
States and Canada through a number of U.S. underwriters. Merrill Lynch
International, Goldman Sachs International, Lehman Brothers International
(Europe), Prudential-Bache Securities (U.K.) Inc. and Salomon Brothers
International Limited are acting as lead managers for each of the international
managers named below. Subject to the terms and conditions set forth in an
international purchase agreement among BlackRock and the international
managers, and concurrently with the sale of shares of class A common stock
to the U.S. underwriters, we have has agreed to sell to the international
managers, and each of the international managers severally and not jointly has
agreed to purchase from BlackRock, the number of shares of class A common stock
listed opposite its name below.

<TABLE>
<CAPTION>
Number
of
International Manager Shares
--------------------- ------
<S> <C>
Merrill Lynch International........................................
Goldman Sachs International........................................
Lehman Brothers International (Europe).............................
Prudential-Bache Securities (U.K.) Inc. ...........................
Salomon Brothers International Limited.............................
-----
Total.........................................................
=====
</TABLE>

We have also entered into a U.S. purchase agreement with underwriters in
the United States and Canada for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., Lehman Brothers Inc., Prudential Securities
Incorporated and Salomon Smith Barney Inc. are acting as U.S. representatives.
Subject to the terms and conditions described in the U.S. purchase agreement,
and concurrently with the sale of shares of class A common stock to the
international managers pursuant to the international purchase agreement, we
have agreed to sell to the U.S. underwriters, and the U.S. underwriters
severally have agreed to purchase from us, an aggregate of shares of class A
common stock. The initial public offering price per share and the total
underwriting discount per share of class A common stock are identical under the
international purchase agreement and the U.S. purchase agreement.

In the international purchase agreement and the U.S. purchase agreement,
the international managers and the U.S. underwriters have agreed, subject to
the terms and conditions set forth in those agreements to purchase all of the
shares of class A common stock being sold under the terms of those agreement if
any of the shares of class A common stock are purchased. In the event of a
default by an underwriter, the U.S. purchase agreement and the international
purchase agreement provide that the purchase commitments of the nondefaulting
underwriters may be increased or the purchase agreements may be terminated. The
closings with respect to the sale of shares of class A common stock to be
purchased by the international managers and the U.S. underwriters are
conditioned on one another.

We have agreed to indemnify the international managers and the U.S.
underwriters against liabilities under the securities laws arising out of or
based upon untrue statements of material facts or material omissions contained
in the registration statement or the prospectus. We have also agreed to
contribute to payments that the U.S. underwriters and the international
managers may be required to make in respect of those liabilities.

80
<PAGE>

[International--Alternate Page]

Commitments and Discounts

The lead managers have advised us that the international managers propose
initially to offer the shares of class A common stock to the public at the
initial public offering price listed on the cover page of this prospectus, and
to dealers at such price less a concession not in excess of $ per share of
class A common stock. The international managers may allow, and such dealers
may reallow, a discount not in excess of $ per share of class A common stock
to other dealers. After the initial public offerings, the public offering
price, concession and discount may be changed.

The following table shows the per share and total public offering price,
underwriting discount to be paid by us to the international managers and the
U.S. underwriters and the proceeds before expenses to us. This information is
presented assuming either no exercise or full exercise by the international
managers and the U.S. underwriters of their over-allotment options.

<TABLE>
<CAPTION>
Without With
Per Share Option Option
--------- ------- ------
<S> <C> <C> <C>
Public offering price............................ $ $ $
Underwriting discount............................ $ $ $
Proceeds, before expenses, to BlackRock.......... $ $ $
</TABLE>

Intersyndicate Agreement

The international managers and the U.S. underwriters have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Under the terms of the intersyndicate agreement, the international
managers and the U.S. underwriters are permitted to sell shares of our class A
common stock to each other for purposes of resale at the initial public
offering price, less an amount not greater than the selling concession. Under
the terms of the intersyndicate agreement, the U.S. underwriters and any dealer
to whom they sell shares of our class A common stock will not offer to sell or
sell shares of our class A common stock to persons who are non-U.S. or non-
Canadian persons or to persons they believe intend to resell to persons who are
non-U.S. or non-Canadian persons, except in the case of transactions under the
terms of the intersyndicate agreement. Similarly, the international managers
and any dealer to whom they sell shares of our class A common stock will not
offer to sell or sell shares of our class A common stock to U.S. persons or to
Canadian persons or to persons they believe intend to resell to U.S. or
Canadian persons, except in the case of transactions pursuant to the
intersyndicate agreement.

Over-allotment Option

We have granted an option to the international managers, exercisable for
30 days after the date of this prospectus, to purchase up to additional
shares of class A common stock at the public offering price listed on the cover
page of this prospectus, less the underwriting discount. The international
managers may exercise this option solely to cover over-allotments, if any, made
on the sale of the class A common stock. To the extent that the international
managers exercise this option, each international manager will be obligated,
subject to customary conditions, to purchase a number of additional shares of
our class A common stock proportionate to such international manager's initial
amount reflected in the above table.

81
<PAGE>

[International-Alternate Page]

We have also granted an option to the U.S. underwriters, exercisable for
30 days after the date of this prospectus, to purchase up to additional
shares of class A common stock to cover over-allotments, if any, on terms
similar to those granted to the international managers.

Reserved Shares

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to of the shares of the class A common stock
offered by this prospectus for sale to some of our directors, officers and
employees of BlackRock and PNC. The number of shares of our class A common
stock available for sale to the general public will be reduced to the extent
that those persons purchase the reserved shares. Any reserved shares which are
not orally confirmed for purchase within one day of the pricing of the
offerings will be offered by the underwriters to the general public on the same
basis as the other shares offered by this prospectus.

No Sales of Similar Securities

BlackRock and its executive officers and directors and all existing
shareholders will agree prior to the offering not to sell or transfer any of
their shares of class B common stock for 180 days after the date of the
prospectus unless they first obtain the written consent of Merrill Lynch. In
particular, BlackRock and all of these persons have agreed that they will not,
subject to limited exceptions, directly or indirectly

. offer, pledge, sell or contract to sell any of the class B common
stock;

. sell any option or contract to purchase the class B common stock;

. purchase any option or contract to sell the class B common stock;

. request or demand that BlackRock file a registration statement
related to the class B common stock; or

. enter into any agreement or transaction that transfers all or any
part of the ownership of the class B common stock.

However, a shareholder may without the consent of Merrill Lynch transfer
the common stock to trusts or similar entities for estate planning purposes or
to affiliates as defined in Rule 144 as long as any transferee agrees in
writing to be bound by the terms of the lockup agreement. See "Shares Eligible
for Future Sale."

New York Stock Exchange Listed

Initial Public Offering Price

Prior to the offerings, there has been no public market for the class A
common stock of BlackRock. The initial public offering price will be determined
through negotiations between BlackRock and the representatives. The factors
considered in determining the initial public offering price, in addition to
prevailing market conditions, are

. price-earnings ratios of publicly traded companies that the
representatives believe to be comparable to BlackRock;

82
<PAGE>

[International--Alternate Page]

. financial information of BlackRock;

. the history of, and the prospects for, BlackRock and the industry in
which it competes; and

. an assessment of its management, its past and present operations, the
prospects for, and timing of, future revenue of BlackRock, and the
present state of its development.

NASD Regulations

Because we are an affiliate of J.J.B. Hilliard, W.L. Lyons Inc., a
participant in these offerings, and other non-participating PNC subsidiaries
that are member firms of the NASD, the offerings will be conducted in
accordance with Conduct Rule 2720 of the National Association of Securities
Dealers, Inc., which requires that the public offering price of an equity
security be no higher than the price recommended by a qualified independent
underwriter which has participated in the preparation of the registration
statement and performed its usual standard of due diligence. Merrill Lynch has
agreed to act as qualified independent underwriter with respect to the
offerings. The public offering price of the class A common stock will be no
higher than that recommended by Merrill Lynch.

The underwriters will not confirm sales of the class A common stock to
any account over which they exercise discretionary authority without the prior
written specific approval of the customer.

Price Stabilization, Short Positions and Penalty Bids

The U.S. representatives may also impose a penalty bid on underwriters
and selling group members. This means that if the U.S. representatives purchase
shares of class A common stock in the open market to reduce the underwriters'
short position or to stabilize the price of our class A common stock, they may
reclaim the amount of the selling concession from the underwriters and selling
group members who sold those shares.

In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of our class A common stock to the
extent that it discourages resale of our class A common stock.

83
<PAGE>

[International-Alternate Page]

UK Selling Restrictions

Each international manager has agreed that:

.it has not offered or sold and, prior to the expiration of the period
of six months from the closing date, will not offer or sell any
shares of class A common stock to persons in the United Kingdom,
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise
in circumstances which do not constitute an offer to the public in
the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;

.it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the class A common stock in, from or otherwise involving
the United Kingdom; and

.it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the
issuance of class A common stock to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 as amended by the
Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1997 or is a person to whom such document may otherwise
lawfully be issued or passed on.

No Public Offering Outside the United States

No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of class A
common stock, or the possession, circulation or distribution of this prospectus
or any other material relating to BlackRock or shares of our class A common
stock in any jurisdiction where action for that purpose is required.
Accordingly, the shares of our class A common stock may not be offered or sold,
directly or indirectly, and neither this prospectus nor any other offering
material or advertisements in connection with the shares of class A common
stock may be distributed or published, in or from any country or jurisdiction
except in compliance with any applicable rules and regulations of any such
country or jurisdiction.

Purchasers of the shares offered by this prospectus may be required to
pay stamp taxes and other charges in accordance with the laws and practices of
the country of purchase in addition to the offering price described on the
cover page of this prospectus.

Other Relationships

Certain of the underwriters and their affiliates engage in transactions
with, and perform services for, BlackRock, PNC and their affiliates in the
ordinary course of business and have engaged, and may in the future engage, in
commercial banking and investment banking transactions with BlackRock, for
which they receive customary compensation. Merrill Lynch, Prudential Securities
and its affiliated parties and Salomon Smith Barney distribute BlackRock Funds
and provide stockholder services in connection with those funds in the ordinary
course of business, for which they receive customary compensation.

84
<PAGE>

MATERIAL UNITED STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-
U.S. HOLDERS OF CLASS A COMMON STOCK

. a citizen or resident of the United States;

. a partnership, corporation or other entity created or organized
in or under the laws of the United States or of any political
subdivision thereof;

Dividends

. the dividend is effectively connected with the conduct of a
trade or business of the non-U.S. Holder within the United
States; or

. if a tax treaty applies, it is attributable to a United States
permanent establishment of the non-U.S. Holder,

Sale or Other Disposition of Class A Common Stock

A non-U.S. Holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of class A common stock unless:

. the gain is effectively connected with the conduct of a trade
or business of the non-U.S. Holder within the United States;

85
<PAGE>

. the non-U.S. Holder is subject to tax pursuant to the
provisions of United States federal income tax law applicable
to certain United States expatriates; or

Estate Tax

Backup Withholding and Information Reporting

86
<PAGE>

LEGAL MATTERS

EXPERTS

WHERE YOU CAN FIND MORE INFORMATION

87
<PAGE>

[International-Alternate Back Cover Page]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Through and including (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

9,000,000 Shares of Class A Common Stock

----------------
PROSPECTUS

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

Merrill Lynch International
Goldman Sachs International
Lehman Brothers International
Prudential-Bache Securities
Salomon Smith Barney International

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

Item 13. Other Expenses of Issuance and Distribution

The following table indicates the estimated expenses to be incurred in
connection with the Offerings, all of which will be paid by BlackRock.

<TABLE>
<S> <C>
SEC registration fee.......................................... $ 51,791
NASD fee...................................................... 19,100
Listing fee................................................... 115,000
Accounting fees and expenses.................................. 750,000
Legal fees and expenses....................................... 1,100,000
Printing and engraving........................................ 375,000
Transfer Agent's fees......................................... 25,000
Blue Sky fees and expenses (including counsel fees)........... 10,000
Miscellaneous expenses........................................ 22,989
----------
Total....................................................... $2,468,880
==========
</TABLE>
- --------

Item 14. Indemnification of Directors and Officers

Article SEVENTH of BlackRock's certificate of incorporation provides that
no director of BlackRock shall be personally liable to BlackRock or its
stockholders for monetary damages for breach of fiduciary duty to the fullest
extent permitted by law.

In addition, Article VI of BlackRock's bylaws provides that if the
Delaware General Corporation Law is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of
a director of BlackRock shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended. In addition,
the bylaws provide for indemnification by BlackRock of its directors and
officers under certain circumstances against expenses, liabilities, and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes and penalties
and amounts paid in settlement) incurred in connection with any threatened,
pending or completed legal proceeding in which any such person is involved by
reason of the fact that such person is or was a director or officer of
BlackRock or was serving at the request of BlackRock as a director or officer
of another enterprise.

The form of underwriting agreement to be filed as Exhibit 1.1 will
contain agreements between BlackRock, PNC and BlackRock's management and
directors and the underwriters and their controlling persons providing for
indemnification against civil liabilities, including liabilities under the
Securities Act, or for contribution to payments which any of them may be
required to make in respect thereof.

Item 15. Recent Sales of Unregistered Securities.

On January 31, 1998, PNC Bank Corp. ("PNC") sold, pursuant to a private
placement under Section 4(2) of the Securities Act, 30,000 shares of restricted
BlackRock Financial Management, Inc. ("BFM") stock to certain key employees and
PNC retained 70,000 shares. The purchase price for the stock was based on an
independent valuation of BFM, with the shares subject to significant vesting
and transfer restrictions.

On March 31, 1998, PNC contributed BFM and certain other investment
management subsidiaries into a new holding company, BlackRock. BFM's employee
stockholders exchanged their stock in BFM for an equal number of restricted
shares of BlackRock common stock while PNC received 70,000 shares of BlackRock
common stock for its ownership interest in BFM and an additional 94,000 shares
representing the fair value based on an independent valuation of PNC's other
contributed investment management businesses. The issuance of the BlackRock
common stock was made pursuant to a private placement under Section 4(2) of the
Securities Act.

II-1
<PAGE>

In May 1998, BlackRock sold an additional 5,507 shares of restricted
common stock pursuant to a private placement under Section 4(2) of the
Securities Act to key employees of the contributed businesses. In May 1998,
BlackRock also executed forward sales of 637 shares of BlackRock restricted
common stock to key employees. Total proceeds from employee purchases of
restricted stock amounted to $34,214,000. These shares were issued at a
discount to fair market value of $1,737,000 which was recorded as compensation
expense. During 1998 and 1999, several employee stockholders terminated their
employment and sold 776 shares back to BlackRock at cost.

In September 1999, prior to the completion of the offerings, BlackRock
intends to sell to 8 key employees the 776 shares of restricted BlackRock
common stock repurchased from former employees during 1998 and 1999, and
currently held in treasury, pursuant to a private placement under Section 4(2)
of the Securities Act. All of these employees are managing directors of
BlackRock and, except for one, all already own shares of BlackRock common
stock. They are all accredited investors as defined in Regulation D under the
Securities Act. Total proceeds from these sales are expected to amount to
$749,616. These shares will be issued at a discount to fair market value of
$ , which will be recorded as compensation expense.

Upon completion of the offerings, all the shares of BlackRock common
stock described above will be automatically converted into shares of class B
common stock of BlackRock.

Item 16. Exhibits
(a) Exhibits

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
1.1 --Form of U.S. Underwriting Agreement.*
1.2 --Form of International Underwriting Agreement.
3.1 --Form of Amended and Restated Certificate of Incorporation of the
Registrant.*
3.2 --Form of Amended and Restated Bylaws of the Registrant.*
4.1 --Specimen of Common Stock Certificate (per class).
4.2 --Amended Stockholders Agreement.*
5.1 --Form of Opinion of Skadden, Arps, Slate Meagher & Flom LLP,
regarding legality of securities being registered.*
10.1 --Form of Tax Disaffiliation Agreement among BlackRock Inc., PNC Asset
Management, Inc. and PNC Bank Corp.*
10.2 --Form of 1999 Stock Award and Incentive Plan.*
10.3 --Form of 1999 Annual Incentive Performance Plan.*
10.4 --Form of Non-employee Directors Stock Compensation Plan.*
10.5 --Form of Employment Agreement.*
10.6 --Form of Initial Public Offering Agreement among the Registrant, PNC
Bank Corp. and PNC Asset Management, Inc.*
10.7 --Form of Registration Rights Agreement among the Registrant, PNC
Asset Management, Inc. and certain holders of class B common stock of
the Registrant.*
10.8 --Revised Form of Services Agreement between the Registrant and PNC
Bank Corp.
21.1 --List of subsidiaries of the Registrant.
23.1 --Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).*
23.2 --Consent of Ernst & Young LLP.
24.1 --Powers of Attorney.*
27.1 --Financial Data Schedule.
</TABLE>
- --------

* Previously filed.

II-2
<PAGE>

(b)Financial Statement Schedules

We did not include financial statement schedules with this item because
they are not required, not applicable or the information is included in the
financial statements or notes to the financial statements that are part of the
prospectus.

Item 17. Undertakings

(a) The undersigned registrant hereby undertakes to provide the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-1 and has duly caused this
amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of New York, New York on
the 24th day of September, 1999.

BLACKROCK, INC.

/s/ Laurence D. Fink
By: _________________________________
Laurence D. Fink
Chairman of the Board of
Directors and Chief Executive
Officer

II-4
<PAGE>

Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Laurence D. Fink Chairman of the Board of September 24, 1999
____________________________________ Directors and Chief
Laurence D. Fink Executive Officer (Principal
Executive Officer)

/s/ Paul L. Audet Managing Director, Chief September 24, 1999
____________________________________ Financial Officer (Principal
Paul L. Audet Financial and Accounting
Officer)
/s/ Ralph L. Schlosstein Director and President September 24, 1999
____________________________________
Ralph L. Schlosstein

* Director September 24, 1999
____________________________________
Thomas H. O'Brien
* Director September 24, 1999
____________________________________
James E. Rohr
* Director September 24, 1999
____________________________________
Walter E. Gregg, Jr.
* Director September 24, 1999
____________________________________
Helen P. Pudlin
</TABLE>

* Robert P. Connolly, pursuant to Powers of Attorney (executed by each of the
officers and directors indicated above and filed as part of the registrant's
Registration Statement, on May 13, 1999, Reg. No. 333-78367), by signing his
name hereto does hereby sign and execute this Amendment No. 4 to Form S-1
Registration Statement Under the Securities Act of 1933 on behalf of each
director.

/s/ Robert P. Connolly
-------------------------------------
Robert P. Connolly

II-5

<PAGE>

Exhibit 1.2

BLACKROCK, INC.

(a Delaware corporation)

* * Shares of Class A Common Stock

(Par Value $.01 Per Share)

INTERNATIONAL PURCHASE AGREEMENT

* * , 1999

MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
PRUDENTIAL-BACHE SECURITIES (U.K.) INC. and
SALOMON BROTHERS INTERNATIONAL LIMITED
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England

Ladies and Gentlemen:

BlackRock, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Merrill Lynch International ("Merrill Lynch") and each of the
other International Managers named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, Goldman Sachs International, Lehman Brothers International (Europe),
Prudential-Bache Securities (U.K.) Inc. and Salomon Brothers International
Limited are acting as representatives (in such capacity, the "Lead Managers"),
with respect to the issue and sale by the Company and the purchase by the
International Managers, acting severally and not jointly, of the respective
numbers of shares of Class A Common Stock, par value $.01 per share, of the
Company (the "Class A Common Stock") set forth in said Schedule A, and with
respect to the grant by the Company to the International Managers, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of * * additional shares of Class A Common Stock to
cover over-allotments, if any. The aforesaid * * shares of Class A Common Stock
(the "Initial International Securities") to be purchased by the International
Managers and all or any part of the * * shares of Class A Common Stock subject
to the option described in Section 2(b) hereof (the "International Option
Securities") are hereinafter called, collectively, the "International
Securities". The Class A Common Stock and the Class B Common Stock, par value
$.01 per share, of the Company (the "Class B Common Stock") are hereinafter
referred to as the "Common Stock".
<PAGE>

It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of * * shares of Class A Common
Stock (the "Initial U.S. Securities") through arrangements with certain
underwriters in the United States and Canada (the "U.S. Underwriters") for which
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Lehman
Brothers Inc., Prudential Securities Incorporated and Salomon Smith Barney Inc.
are acting as representatives (the "U.S. Representatives") and the grant by the
Company to the U.S. Underwriters, acting severally and not jointly, of an option
to purchase all or any part of the U.S. Underwriters' pro rata portion of up to
* * additional shares of Class A Common Stock solely to cover overallotments, if
any (the "U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities". It is understood
that the Company is not obligated to sell and the International Managers are not
obligated to purchase, any Initial International Securities unless all of the
Initial U.S. Securities are contemporaneously purchased by the U.S.
Underwriters.

The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities, and the U.S. Securities are
hereinafter collectively called the "Securities".

The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters.

The Company understands that the International Managers propose to make a
public offering of the International Securities as soon as the Lead Managers
deem advisable after this Agreement has been executed and delivered.

The Company and the International Managers agree that up to * * shares of
the Initial International Securities to be purchased by the International
Managers and that up to * * shares of the Initial U.S. Securities to be
purchased by the U.S. Underwriters (collectively, the "Reserved Securities")
shall be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. and all other applicable laws, rules and
regulations. To the extent that such Reserved Securities are not orally
confirmed for purchase by such eligible employees and persons having business
relationships with the Company by the end of the first business day after the
date of this Agreement, such Reserved Securities may be offered to the public as
part of the public offering contemplated hereby.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-78367) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the
<PAGE>

related preliminary prospectus or prospectuses. Promptly after execution and
delivery of this Agreement, the Company will either (i) prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms
of prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of International Prospectus is identical to the Form
of U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting" and the inclusion in the Form of
International Prospectus of a section under the caption "Certain United States
Tax Considerations for Non-United States Holders." The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated * * , 1999 and
preliminary U.S. Prospectus dated * * , 1999, respectively, each together with
the applicable Term Sheet and all references in this Agreement to the date of
such Prospectuses shall mean the date of the applicable Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to
<PAGE>

in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof, and agrees with each International Manager, as follows:

(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.

At the respective times the Registration Statement, the Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Prospectuses, any preliminary prospectuses and any
supplement thereto or prospectus wrapper prepared in connection therewith,
at their respective times of issuance and at the Closing Time, complied and
will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectuses and such
preliminary prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities.
Neither of the Prospectuses nor any amendments or supplements thereto
(including any prospectus wrapper), at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any Option Securities are purchased, at the Date of Delivery), included
or will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different", as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.

Each preliminary prospectus and the Prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
<PAGE>

electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.

(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, together with the 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, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved except as disclosed therein. The
supporting schedules included in the Registration Statement present fairly
in all material respects in accordance with GAAP the information required
to be stated therein in all material respects. The selected financial data
and the summary financial information included in the Prospectuses 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 in the Registration Statement.

(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.

(v) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or to be in good standing would not result in a Material Adverse
Effect.
<PAGE>

(vi) Good Standing of Subsidiaries. Each subsidiary of the Company
listed on Exhibit 21.1 to the Registration Statement (each a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation or partnership, as the case may be, in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has requisite corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary
was issued in violation of the preemptive or similar rights arising by
operation of law, or under the charter, by-laws or other organizational
documents of the Company or any Subsidiary or under any agreement to which
the Company or any Subsidiary is a party. The only subsidiaries of the
Company are (a) the subsidiaries listed on Exhibit 21 to the Registration
Statement and (b) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.

(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred to
in the Prospectuses). The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
arising by operation of law, or under the organizational documents or
by-laws of the Company or any Subsidiary or under any agreement to which
the Company or any Subsidiary is a party.

(viii) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by the
Company.

(ix) Authorization and Description of Securities. The Securities to be
purchased by the International Managers and the U.S. Underwriters from the
Company have been duly authorized for issuance and sale to the
International Managers pursuant to this Agreement and the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to this Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set
<PAGE>

forth herein and the U.S. Purchase Agreement, respectively, will be validly
issued, fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; no holder of the Securities will be subject to personal liability
by reason of being such a holder; and the issuance of the Securities is not
subject to the preemptive or other similar rights arising by operation of
law, under the certificate of incorporation or by-laws of the Company,
under any agreement to which the Company or any of its subsidiaries is a
party, or otherwise.

(x) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter, by-laws or other
organizational documents or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any bond,
deed, note or any contract, indenture, mortgage, deed of trust, loan or
credit agreement, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or
any subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement and
the U.S. Purchase Agreement and the consummation of the transactions
contemplated in this Agreement, the U.S. Purchase Agreement and in the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectuses under the caption "Use of Proceeds") and compliance by the
Company with its obligations under this Agreement and the U.S. Purchase
Agreement have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.

(xi) Absence of Labor Dispute. No labor dispute or problem exists with
the employees of the Company or any subsidiary or, to the knowledge of the
Company, is imminent, which may reasonably be expected to result in a
Material Adverse Effect.
<PAGE>

(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement and the U.S. Purchase Agreement or the performance by the Company
of its obligations hereunder or thereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any subsidiary of
the Company is a party or of which any of their respective properties or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.

(xiii) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.

(xiv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, 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, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.

(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement and the U.S. Purchase Agreement or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement, except (i) such as have been already obtained or
as may be required under the 1933 Act or the 1933 Act Regulations and
foreign or state securities or blue sky laws and filing to list the
Securities on the New York Stock Exchange or registering of the Securities
under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
which in each case, will be effective on or prior to the Closing Date and
(ii)
<PAGE>

such as have been obtained under the laws and regulations of jurisdictions
outside the United States in which the Reserved Securities are offered.

(xvi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.

(xvii) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or (b) do not, singly or in the aggregate,
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 or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectuses, are in full force and effect, and neither
the Company nor any subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.

(xviii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").

(xix) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act except as disclosed in the Prospectus.
<PAGE>

(xx) Investment Advisors Act. Each of BlackRock Advisors, Inc.
("BlackRock Advisors"), BlackRock Institutional Management Corporation
("BlackRock Institutional"), BlackRock Financial Management, Inc.
("BlackRock Financial"), BlackRock (Japan), Inc. ("BlackRock Japan") and
BlackRock International Ltd. ("BlackRock International", together with
BlackRock Advisors, BlackRock Institutional, BlackRock Financial and
BlackRock Japan, 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 its
subsidiaries conduct business or is not subject to material liability or
disability by reason of the failure to be so registered, licensed or
qualified.

(xxi) Broker-Dealer Registration. Provident Advisers, Inc. ("Provident
Advisers") 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 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.
Provident Advisers is a member in good standing of NASD. None 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 conducts business or is subject to any material
liability or disability by reason of the failure to be so registered,
licensed or qualified.

(xxii) Transfer Agent. None of the Company or its direct or indirect
subsidiaries is required to be registered, licensed or qualified as a
transfer agent under the federal or state laws requiring any such
registration, licensing or qualification in any state in which it conducts
business or is subject to any material liability or disability by reason of
the failure to be so registered, licensed or qualified.

(xxiii) Compliance with Law. Each of the Investment Adviser
Subsidiaries and Provident Advisers is and has been in compliance with, and
each such entity has received no notice of any violation of, (A) all laws,
regulations, ordinances and
<PAGE>

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.

(xxiv) Funds. 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 subadviser 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 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. To the best knowledge of
the Company, each Fund's registration statement complies in all material
respects with the provisions of the Securities Act, the 1940 Act and the
rules and regulations thereunder and does 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.

(xxv) Advisory and Other Agreements. Each agreement between the
Company, any Investment Adviser Subsidiary, or any other subsidiary of the
Company on the one hand and any 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.

(xxvi) Assignment. The offering contemplated by this Agreement and the
U.S. Purchase 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.

(xxvii) Year 2000. The Company does not anticipate incurring
significant operating expenses or costs to ensure that all Company software
that contains or calls on a calendar function that is indexed to a computer
processing unit clock, provides specific dates or calculates spans of
dates, is able to record, store, process and provide true and accurate
dates and calculations for dates and spans of dates including and following
January 1, 2000, except as disclosed in the Prospectus.

(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the U.S. Representatives, the
Lead Managers, the U.S. Underwriters, the International Managers, or to counsel
thereof shall be deemed a representation
<PAGE>

and warranty by the Company to each U.S. Representative, Lead Manager, U.S.
Underwriter and International Manager as to the matters covered thereby.

SECTION 2. Sale and Delivery to International Managers; Closing.

(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each International Manager, severally and not jointly,
and each International Manager, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial International Securities set forth in Schedule A opposite the name of
such International Manager, plus any additional number of Initial International
Securities which such International Manager may become obligated to purchase
pursuant to the provisions of Section 10 hereof.

(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the International Managers,
severally and not jointly, to purchase up to an additional * * shares of Class A
Common Stock at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery for the
International Option Securities (a "Date of Delivery") shall be determined by
the Lead Managers, but shall not be later than seven full business days after
the exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Lead Managers in
their discretion shall make to eliminate any sales or purchases of fractional
shares.

(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Simpson
Thacher & Bartlett, counsel for the Underwriters, at 425 Lexington Avenue, New
York, New York 10017, or at such other place as shall be agreed upon by the Lead
Managers and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if
the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Lead
<PAGE>

Managers and the Company (such time and date of payment and delivery being
herein called "Closing Time").

In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at Simpson Thacher & Bartlett, counsel for the
Underwriters, at 425 Lexington Avenue, New York, New York 10017, or at such
other place as shall be agreed upon by the Lead Managers and the Company, on
each Date of Delivery as specified in the notice from the Lead Managers to the
Company.

Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.

(d) Denominations; Registration. Certificates for the Initial International
Securities and the International Option Securities, if any, shall be in such
denominations and registered in such names as the Lead Managers may request in
writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.

(e) Appointment of Qualified Independent Underwriter. The Company hereby
confirms its engagement of Merrill Lynch, Pierce, Fenner & Smith Incorporated
as, and Merrill Lynch, Pierce, Fenner & Smith Incorporated hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. with respect to the offering
and sale of the International Securities. Merrill Lynch, Pierce, Fenner & Smith
Incorporated, solely in its capacity as qualified independent underwriter and
not otherwise, is referred to herein as the "Independent Underwriter".

SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
<PAGE>

(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Lead Managers
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

(b) Filing of Amendments. The Company will give the Lead Managers
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectuses, will furnish the Lead Managers with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Lead Managers or counsel for the International Managers shall reasonably
object.

(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the International Managers. The copies of the Registration Statement and
each amendment thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.

(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish
<PAGE>

to each International Manager, without charge, during the period when the
International Prospectus is required to be delivered under the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies
of the International Prospectus (as amended or supplemented) as such
International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.

(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the U.S. Purchase Agreement and in the Prospectuses. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the International Managers or for the Company, to amend the
Registration Statement or amend or supplement any Prospectus in order that
the Prospectuses will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectuses
comply with such requirements, and the Company will furnish to the
International Managers such number of copies of such amendment or
supplement as the International Managers may reasonably request.

(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Lead Managers may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
<PAGE>

(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.

(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds".

(i) Listing. The Company will use its best efforts to effect the
listing of the Class A Common Stock (including the Securities) on the New
York Stock Exchange.

(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Lead Managers, (i) directly or indirectly, 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 or otherwise transfer or dispose of any share of Class B Common
Stock or any securities convertible into or exercisable or exchangeable for
Class B Common Stock or file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Class
B Common Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Class B Common Stock or
such other securities, in cash or otherwise. The foregoing sentence shall
not apply to (A) the Securities to be sold hereunder or under the U.S.
Purchase Agreement, (B) any shares of Class B Common Stock issued by the
Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the
Prospectuses, (C) any shares of Class B Common Stock issued or options to
purchase Class B Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectuses, (D) any shares of
Class B Common Stock issued pursuant to any non-employee director stock
plan or dividend reinvestment plan, (E) any shares of Class A Common Stock
or (F) Securities convertible, exercisable or exchangeable for shares of
Class B Common Stock issued, offered or sold in transactions not involving
a public offering in consideration for (1) the acquisition of stock or
assets of other companies or (2) the services of newly hired employees of
the Company; provided, however, that each recipient of the securities
agrees in writing to be bound by the restrictions set forth in this
paragraph.

(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
<PAGE>

(l) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD
rules from sale, transfer, assignment, pledge or hypothecation for a period
of three months following the date of this Agreement. The Underwriters will
notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent
to place a stop transfer restriction upon such securities for such period
of time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Securities, the Company agrees to
reimburse the Underwriters for any reasonable expenses (including, without
limitation, legal expenses) they incur in connection with such release.

SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the International
Managers, (iv) the fees and disbursements of the Company's counsel, accountants
and other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by NASD of the terms of the sale of the Securities, (x) the
fees and expenses incurred in connection with the listing of the Class A Common
Stock (including the Securities) on the New York Stock Exchange, (xi) all costs
and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, in connection with matters related to the Reserved
Securities which are designated by the Company for sale to employees and others
having a business relationship with the Company and (xii) the fees and expenses
of the Independent Underwriter.

(b) Termination of Agreement. If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the International Managers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the International Managers.
<PAGE>

SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:

(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
International Managers. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule
430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b).

(b) Opinion of Counsel for Company. At Closing Time, the Lead Managers
shall have received the favorable opinion, dated as of Closing Time, of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company, in form
and substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers to the effect set forth in Exhibit A hereto
and to such further effect as counsel to the International Managers may
reasonably request.

(c) Opinion of Counsel for International Managers. At Closing Time,
the Lead Managers shall have received an opinion, dated as of Closing Time,
of Simpson Thacher & Bartlett, counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers in form and substance reasonably satisfactory
to the International Managers.

(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Lead
Managers shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations
and warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions
on
<PAGE>

its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or
are pending or are contemplated by the Commission.

(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Lead Managers shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the Lead
Managers, together with signed or reproduced copies of such letter for each
of the other International Managers 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 the Registration Statement and the Prospectuses.

(f) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from Ernst & Young LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.

(g) Approval of Listing. At Closing Time, the Class A Common Stock
(including the Securities) shall have been approved for listing on the New
York Stock Exchange, subject only to official notice of issuance.

(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.

(i) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons or entities listed on Schedule C
hereto.

(j) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.

(k) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the
Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Lead Managers shall have received:
<PAGE>

(i) Officers' Certificate. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.

(ii) Opinion of Counsel for Company. The favorable opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Company, in form and
substance satisfactory to counsel for the International Managers, dated
such Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.

(iii) Opinion of Counsel for International Managers. The favorable
opinion of Simpson Thacher & Bartlett, counsel for the International
Managers, dated such Date of Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.

(iv) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in
form and substance satisfactory to the Lead Managers and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to the Lead Managers pursuant to Section 5(f) hereof, except that
the "specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of Delivery.

(l) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the International Managers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Lead Managers and counsel for
the International Managers.

(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to
purchase the relevant Option Securities may be terminated by the Lead
Managers by notice to the Company at any time at or prior to Closing Time
or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
<PAGE>

SECTION 6. Indemnification.

(a) Indemnification of International Managers. (1) The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the violation of any applicable
laws or regulations of foreign jurisdictions where Reserved Securities have
been offered and (B) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in foreign jurisdictions in connection with the reservation and
sale of the Reserved Securities to eligible employees and persons having
business relationships with the Company or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein, when
considered in conjunction with the Prospectuses or preliminary
prospectuses, not misleading;

(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation of
the nature referred to in Section 6(a)(1)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and

(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission or
in connection with any violation of the nature referred to in Section
<PAGE>

6(a)(1)(ii)(A) hereof, to the extent that any such expense is not paid
under (i), (ii) or (iii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).

(2) In addition to and without limitation of the Company's obligation to
indemnify Merrill Lynch as an Underwriter, the Company also agrees to indemnify
and hold harmless the Independent Underwriter and each person, if any, who
controls the Independent Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, from and against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, incurred as a
result of the Independent Underwriter's participation as a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. in connection with the
offering of the International Securities.

(3) Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of an
International Manager or who controls an underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and who, at the date of
this Agreement, is a director or officer of the Company or controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
such indemnity agreement is subject to the undertaking of the Company in the
Registration Statement under Item 13 relating to "Disclosure of Commission
Position on Indemnification for Securities Act Liabilities" or to "Undertakings"
thereof.

(b) Indemnification of Company, Directors and Officers. Each International
Manager severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)(1) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
international prospectus or the International Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Merrill Lynch expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).

(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against
<PAGE>

it in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a)(1) above, counsel to the
indemnified parties shall be selected by Merrill Lynch, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances; provided, that, if indemnity is sought
pursuant to Section 6(a)(2), then, in addition to the fees and expenses of such
counsel for the indemnified parties, the indemnifying party shall be liable for
the reasonable fees and expenses of not more than one counsel (in addition to
any local counsel) separate from its own counsel and that of the other
indemnified parties for the Independent Underwriter in its capacity as a
"qualified independent underwriter" and all persons, if any, who control the
Independent Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances if, in the reasonable judgment of the
Independent Underwriter, there may exist a conflict of interest between the
Independent Underwriter and the other indemnified parties. Any such separate
counsel for the Independent Underwriter and such control persons of the
Independent Underwriter shall be designated in writing by the Independent
Underwriter. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(1)(ii) and 6(a)(1)(iii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
<PAGE>

(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of any eligible employees or persons having business
relationships with the Company to pay for and accept delivery of Reserved
Securities which, by the end of the first business day following the date of
this Agreement, were subject to a properly confirmed agreement to purchase.

SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the International Managers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions, or in connection with any violation of the nature referred to in
Section 6(a)(1)(ii)(A) hereof, which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.

The relative benefits received by the Company on the one hand and the
International Managers on the other hand in connection with the offering of the
International Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
International Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.

The relative fault of the Company on the one hand and the International
Managers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the International Managers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission or any violation of the nature referred to in
Section 6(a)(1)(ii)(A) hereof.

The Company and the International Managers agree that Merrill Lynch will
not receive any additional benefits hereunder for serving as the Independent
Underwriter in connection with the offering and sale of the International
Securities.

The Company and the International Managers agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the International Managers were treated as one entity
for such purpose) or by any other method
<PAGE>

of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.

Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.

SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Initial International Securities to the International Managers.

SECTION 9. Termination of Agreement.

(a) Termination; General. The Lead Managers may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the International Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or
<PAGE>

the international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Lead Managers, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the NASD
or any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.

SECTION 10. Default by One or More of the International Managers. If one or
more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:

(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of
the non-defaulting International Managers shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or

(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the International Managers to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting International Manager.

No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.

In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a
<PAGE>

termination of the obligation of the International Managers to purchase and the
Company to sell the relevant International Option Securities, as the case may
be, either the Lead Managers or the Company shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectuses or in any other documents or
arrangements. As used herein, the term "International Manager" includes any
person substituted for an International Manager under this Section 10.

SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of * * ; and
notices to the Company shall be directed to it at 345 Park Avenue, 29th Floor,
New York, New York 10154, attention of * * .

SECTION 12. Parties. This Agreement shall each inure to the benefit of and
be binding upon the International Managers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
International Managers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the International Managers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.

SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.

SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
<PAGE>

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the International Managers and the Company in accordance with its terms.

Very truly yours,

BLACKROCK, INC.

By _______________________________
Title:

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
PRUDENTIAL-BACHE SECURITIES (U.K.) INC.
SALOMON BROTHERS INTERNATIONAL LIMITED

By: MERRILL LYNCH INTERNATIONAL

By ____________________________
Authorized Signatory

For itself and the other Lead Managers and on behalf of the other
International Managers named in Schedule A hereto.
<PAGE>

SCHEDULE A

Number of
Initial
International
Name of International Manager Securities
-----------------------------

Merrill Lynch International.........................
Goldman Sachs International.........................
Lehman Brothers International (Europe)..............
Prudential-Bache Securities (U.K.) Inc..............
Salomon Brothers International Limited..............

----------------
Total............................................... * *
================

Sch A-1
<PAGE>

SCHEDULE B

BLACKROCK, INC.

* * Shares of Class A Common Stock

(Par Value $.01 Per Share)

1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $* * .

2. The purchase price per share for the International
Securities to be paid by the several International Managers shall be $*
* , being an amount equal to the initial public offering price set
forth above less $* * per share; provided that the purchase price per
share for any International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.

Sch B-1
<PAGE>

SCHEDULE C

The following persons shall execute agreements in the form of Exhibit B hereto:

PNC Bank Corp. Douglas B. Waggoner
PNC Asset Management, Inc. Susan L. Wagner
Scott M. Amero Adam Wizon
Gordon Anderson William J. Wykle
Keith T. Anderson
Paul Audet
Thomas Bain
Nigel Q.D. Barry
Rosemarie Bruno
Thomas P. Callan
Salvatore Capizzi
Laurence J. Carolan
Robert P. Connolly
R. Andrew Damm
John Davis
Daniel B. Eagan
Laurence D. Fink
Hugh R. Frater
Henry Gabbay
Bennett W. Golub
Andrew Gordon
Charles S. Hallac
Richard Harmon
Susan Heidi
Amy M. Hogan
Michael C. Huebasch
Robert S. Kapito
Kevin Klingert
J. Richard Kushe
P. Phillip Matthews
John P. Moran
Thomas H. Nevin
Barbara G. Novick
Diane Parish
Andrew Phillips
Karen H. Sabath
Dennis Schaney
Ralph L. Schlosstein
Joel M. Shaiman
Rajiv Sobti
Christian K. Stadlinger
Peter J. Tait

Sch C-1
<PAGE>

Exhibit A

FORM OF OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLC
TO BE DELIVERED PURSUANT TO
SECTION 5(b)

(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.

(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the
International Purchase Agreement and the U.S. Purchase Agreement.

(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.

(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to the International Purchase Agreement and the U.S. Purchase
Agreement; the shares of issued and outstanding capital stock have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any shareholder of the Company
arising by operation of law or under the certificate of incorporation or by-laws
of the Company or under any agreement to which the Company or any of its
subsidiaries is a party.

(v) The Securities to be purchased by the International Managers
and the U.S. Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to the International Purchase
Agreement and the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to the International Purchase Agreement and
the U.S. Purchase Agreement, respectively, against payment of the consideration
set forth in the U.S. Purchase Agreement and the International Purchase
Agreement, will be validly issued and fully paid and non-assessable and no
holder of the Securities is or will be subject to personal liability by reason
of being such a holder.

(vi) The issuance of the Securities is not subject to the
preemptive or other similar rights of any shareholder of the Company arising by
operation of law or under the certificate of incorporation or by-laws of the
Company or under any agreement to which the Company or any of its subsidiaries
is a party.

A-1
<PAGE>

(vii) Each Subsidiary has been duly organised and is validly
existing as a corporation or partnership, as the case may be, in good standing
under the laws of the jurisdiction of its organisation, has requisite power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectuses and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to the best of our
knowledge, is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any securityholder of
such Subsidiary.

(viii) The International Purchase Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by the Company.

(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectuses pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.

(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.

(xi) If Rule 434 has been relied upon, the Prospectuses were not
"materially different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.

(xii) The form of certificate used to evidence the Class A Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws of the
Company and the requirements of the New York Stock Exchange.

(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the Company or
any subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the

A-2
<PAGE>

International Purchase Agreement and U.S. Purchase Agreement or the performance
by the Company of its obligations thereunder.

(xiv) The information in the Prospectuses under "Description of
Capital Stock-- Common Stock", "Business--Regulatory Matters",
"Business--Litigation", and "Certain Federal Income Tax Considerations" and in
the Registration Statement under Item 14, to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and bylaws or
legal proceedings, or legal conclusions, has been reviewed by us and is correct
in all material respects and the opinion of such firm set forth under "Certain
Federal Income Tax Considerations" is confirmed.

(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that are not
described as required.

(xvi) All descriptions in the Prospectuses of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.

(xvii) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.

(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, (other than under the
1933 Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the International Purchase
Agreement and the U.S. Purchase Agreement or for the offering, issuance, sale or
delivery of the Securities.

(xix) The execution, delivery and performance of the International
Purchase Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in the International Purchase Agreement, the U.S.
Purchase Agreement and in the Registration Statement (including the issuance and
sale of the Securities, and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use Of Proceeds")
and compliance by the Company with its obligations under the International
Purchase Agreement and the U.S. Purchase Agreement do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(x) of the Purchase Agreements) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary

A-3
<PAGE>

pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-laws
of the Company or any Subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their respective properties, assets
or operations.

(xx) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.

(xxi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.

(xxii) Provident Advisors is duly registered, licensed or qualified
as a broker-dealer under the Exchange Act and in each jurisdiction where the
conduct of its business requires such registration and is in compliance in all
material respects with all laws requiring any such registration, licensing or
qualification in all jurisdictions in which such registration, licensing or
qualification is required. None of the Company or its other direct or indirect
subsidiaries (other than Provident Advisors) is required to be registered,
licensed or qualified as a broker-dealer under the Exchange Act or the laws
requiring any such registration, licensing or qualification in any jurisdiction
in which it conducts business. To the best knowledge of counsel, each of the
Company, and Provident Advisors is in compliance with all laws, regulations,
ordinances and rules (including those of any non-governmental self-regulatory
agencies) applicable to it or its operations relating to broker-dealer
activities except where any failure by the Company or any subsidiary to comply
with any such law, regulation, ordinance or rule would not have, individually,
or in the aggregate, a Material Adverse Effect.

(xxiii) Each Investment Adviser Subsidiary is duly registered as an
investment adviser under the Advisers Act. No other subsidiary of the Company is
an "investment adviser" within the meaning of the Advisers Act and the rules and
regulations of the Commission promulgated thereunder. 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 in all material respects with all laws
requiring such registration, licensing or qualification in all jurisdictions in
which such registration, licensing or qualification is required. None of the
Company or its direct or indirect subsidiaries other than the Investment Adviser
Subsidiaries is required to be registered, licensed or qualified as an
investment adviser under the laws of any jurisdiction in which it conducts
business. To the best knowledge of counsel, each of the Company and the
Investment Adviser Subsidiaries is in compliance with 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
activities except where any failure by the Company or any subsidiary to comply
with any such law, regulation, ordinance or rule would not have, individually,
or in the aggregate, a Material Adverse Effect.

A-4
<PAGE>

(xxiv) The Offering 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 Investment Advisor Subsidiaries are parties.

Nothing has come to our attention that would lead us to believe
that the Registration Statement or any amendment thereto, including the Rule
430A Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectuses
were issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

In rendering such opinion, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).

A-5
<PAGE>

Exhibit B

* * , 1999

MERRILL LYNCH & CO.

Merrill Lynch, Pierce, Fenner
& Smith Incorporated,
Goldman, Sachs & Co.
Lehman Brothers Inc.
Prudential Securities Incorporated
Salomon Smith Barney Inc.
as U.S. Representatives of the
U.S. Underwriters named in the
U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, NY 10281-1209

Merrill Lynch International
Goldman Sachs International
Lehman Brothers International (Europe)
Prudential-Bache Securities (U.K.) Inc.
Salomon Brothers International Limited
as Lead Managers of the several International Managers
named in the International Purchase Agreement
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England

Re: Proposed Initial Public Offering by BlackRock, Inc.

Dear Sirs:

The undersigned, a stockholder [and an officer and/or director] of
BlackRock, Inc., a Delaware corporation (the "Company"), understands that (i)
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Goldman, Sachs & Co., Lehman Brothers Inc., Prudential
Securities Incorporated and Salomon Smith Barney Inc. propose to enter into a
U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the Company and
(ii) Merrill Lynch

B-1
<PAGE>

International, Goldman Sachs International, Lehman Brothers International
(Europe), Prudential- Bache Securities (U.K.) Inc. and Salomon Brothers
International Limited propose to enter into an International Purchase Agreement
(the "International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") with the Company providing for the public
offering of shares (the "Securities") of the Company's Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"). The Class A Common Stock and
the Class B Common Stock, par value $.01 per share (the "Class B Common Stock"),
of the Company are hereinafter referred to as the "Common Stock.". In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each U.S. Underwriter
and International Manager to be named in the Purchase Agreements that, during a
period of 180 days from the date of the Purchase Agreements, the undersigned
will not, without the prior written consent of Merrill Lynch, directly or
indirectly, (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 for the sale of, or otherwise dispose of or transfer any shares
of the Company's Class B Common Stock or any securities convertible into or
exchangeable or exercisable for Class B Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing, except pursuant to any pledge existing on the date hereof. or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.

Very truly yours,

Signature: ______________________________

Print Name: _____________________________

<PAGE>

Exhibit 4.1

TEMPORARY CERTIFICATE: EXCHANGEABLE FOR DEFINITIVE ENGRAVED CERTIFICATE
WHEN READY FOR DELIVERY.

CLASS A
COMMON STOCK
$0.01 PAR VALUE

SHARES
TA

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE CUSIP 09247X 10 1
BLACKROCK, INC. SEE REVERSE FOR
CERTAIN DEFINITIONS

THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK, $0.01 PAR VALUE
PER SHARE OF, BLACKROCK, INC.
transferable in person or by duly authorized attorney on the books of the
Corporation upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall
be held subject to the laws of the State of Delaware and the provisions of the
Certificate of Incorporation and the By-laws of the Corporation, as amended from
time to time, to which the holder by acceptance hereof assents.
This certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
IN WITNESS WHEREOF the Corporation has caused this certificate to be
signed by the facsimile signatures of its duly authorized officers and a
facsimile of its corporate seal hereunto affixed.

Dated:

Countersigned and Registered CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Transfer Agent
and Registrar

By /s/
Authorized Signature PRESIDENT

<PAGE>

The shares represented by this certificate have not been registered under either
the Securities Act of 1933 (the "Act") or applicable state or foreign securities
laws (the "Other Acts") and shall not be sold or otherwise disposed of by the
holder hereof except upon registration of such sale or disposition in accordance
with the securities registration requirements of the Act or any applicable Other
Acts, or pursuant to an exemption from such registration requirements. In
addition, the shares represented by this certificate may be transferred only in
compliance with the provisions of the Stockholders Agreement related to these
shares (a copy of which is available for inspection at the executive offices of
BlackRock, Inc. ("BlackRock") at 345 Park Avenue, New York, New York 10154 and
will be provided to a registered holder of securities of BlackRock upon request)
and no person who receives such shares in connection with a transfer which does
not meet the qualifications prescribed by the Stockholders Agreement is entitled
to own or to be registered as the record holder of such shares.
CLASS B
COMMON STOCK
$0.01 PAR VALUE

SHARES
B

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

BLACKROCK, INC. SEE REVERSE FOR
CERTAIN DEFINITIONS

THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS B COMMON STOCK, $0.01 PAR VALUE
PER SHARE, OF BLACKROCK, INC.
transferable in person or by duly authorized attorney on the books of the
Corporation under surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall
be held subject to the laws of the State of Delaware and the provisions of the
Certificate of Incorporation and the By-laws of the Corporation, as amended from
time to time, to which the holder by acceptance hereof assents.
IN WITNESS WHEREOF the Corporation has caused this certificate to be
signed by the facsimile signatures of its duly authorized officers and a
facsimile of its corporate seal hereunto affixed.

Dated:

PRESIDENT CHAIRMAN AND CHIEF EXECUTIVE OFFICER

<PAGE>

BLACKROCK, INC.

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -as tenants in common

TEN ENT -as tenants by the entireties

JT TEN -as joint tenants with right
of survivorship and not as
tenants in common

UNIF GIFT MIN ACT - Custodian
-------------- --------------
(Cust) (Minor)
under Uniform Gifts to Minors

Act
-----------------------------------
(State)

UNIF TRAN MIN ACT - Custodian
-------------- --------------
(Cust) (Minor)
under Uniform Transfers to Minors

Act
-----------------------------------
(State)

Additional abbreviations may also be used though not in the above list.

For value received, hereby sell, assign and
--------------------------
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE

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

- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------

of the capital stock represented by the within Certificate, and do hereby

irrevocably constitute and appoint
----------------------------------------------

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

Attorney to transfer the said stock on the books of the within-named Corporation

with full power of substitution in the premises.

Dated,
--------------------------------

X
------------------------------------------
NOTICE: THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE
CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE
WHATEVER.

THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION, (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.

SIGNATURE(S) GUARANTEED:

KEEP THIS CERTIFICATE IN A SAFE PLACE, IF LOST, STOLEN, MUTILATED OR DESTROYED,
THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.

BANKNOTE CORP. OF AMERICA-BROWNS SUMMIT-(WALL STREET)-1-909017-942 -BLACKROCK,
INC.-PROOF #1-9/13/99-CKM/MLM
<PAGE>

TEMPORARY CERTIFICATE: EXCHANGEABLE FOR DEFINITIVE ENGRAVED CERTIFICATE
WHEN READY FOR DELIVERY.

CLASS A
COMMON STOCK
$0.01 PAR VALUE

[BLACKROCK LOGO HERE]
CUSIP 09247X 10 1
BLACKROCK, INC. SEE REVERSE FOR
CERTAIN DEFINITIONS

THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK, $0.01 PAR VALUE
PER SHARE, OF BLACKROCK, INC.
transferable in person or by duly authorized attorney on the books of the
Corporation upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall
be held subject to the laws of the State of Delaware and the provisions of the
Certificate of Incorporation and the By-laws of the Corporation, as amended from
time to time, to which the holder by acceptance hereof assents.
This certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
IN WITNESS WHEREOF the Corporation has caused this certificate to be
signed by the facsimile signatures of its duly authorized officers and a
facsimile of its corporate seal hereunto affixed.

Dated:

/s/
Countersigned and Registered: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Transfer Agent
and Registrar

By /s/
Authorized Signature PRESIDENT

[CORPORATE SEAL HERE]
<PAGE>

BLACKROCK, INC.

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -as tenants in common

TEN ENT -as tenants by the entireties

JT TEN -as joint tenants with right
of survivorship and not as
tenants in common

UNIF GIFT MIN ACT - Custodian
-------------- --------------
(Cust) (Minor)
under Uniform Gifts to Minors

Act
-----------------------------------
(State)

UNIF TRAN MIN ACT - Custodian
-------------- --------------
(Cust) (Minor)
under Uniform Transfers to Minors

Act
-----------------------------------
(State)

Additional abbreviations may also be used though not in the above list.

For value received, hereby sell, assign and
--------------------------
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE

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

- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------

of the capital stock represented by the within Certificate, and do hereby

irrevocably constitute and appoint
----------------------------------------------

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

Attorney to transfer the said stock on the books of the within-named Corporation

with full power of substitution in the premises.

Dated,
--------------------------------

SIGNATURE(S) GUARANTEED:

KEEP THIS CERTIFICATE IN A SAFE PLACE, IF LOST, STOLEN, MUTILATED OR DESTROYED,
THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.

BANKNOTE CORP. OF AMERICA-BROWNS SUMMIT-(WALL STREET)-1-909017-942 -BLACKROCK,
INC.-PROOF #1-9/13/99-CKM/MLM
<PAGE>

SHARES
[BLACKROCK LOGO HERE]

BLACKROCK, INC. SEE REVERSE FOR
CERTAIN DEFINITIONS

THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS B COMMON STOCK, $0.01 PAR VALUE
PER SHARE, OF BLACKROCK, INC.
transferable in person or by duly authorized attorney on the books of the
Corporation upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall
be held subject to the laws of the State of Delaware and the provisions of the
Certificate of Incorporation and the By-laws of the Corporation, as amended from
time to time, to which the holder by acceptance hereof assents.
IN WITNESS WHEREOF the Corporation has caused this certificate to be
signed by the facsimile signatures of its duly authorized officers and a
facsimile of its corporate seal hereunto affixed.

Dated:

/s/ /s/

PRESIDENT CHAIRMAN AND CHIEF EXECUTIVE OFFICER

[BACKROCK CORPORATE SEAL HERE]

<PAGE>

BLACKROCK, INC.

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -as tenants in common

TEN ENT -as tenants by the entireties

JT TEN -as joint tenants with right
of survivorship and not as
tenants in common

UNIF GIFT MIN ACT - Custodian
-------------- --------------
(Cust) (Minor)
under Uniform Gifts to Minors

Act
-----------------------------------
(State)

UNIF TRAN MIN ACT - Custodian
-------------- --------------
(Cust) (Minor)
under Uniform Transfers to Minors

Act
-----------------------------------
(State)

Additional abbreviations may also be used though not in the above list.

For value received, hereby sell, assign and
--------------------------
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE

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

- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------

of the capital stock represented by the within Certificate, and do hereby

irrevocably constitute and appoint
----------------------------------------------

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

Attorney to transfer the said stock on the books of the within-named Corporation

with full power of substitution in the premises.

Dated,
--------------------------------

SIGNATURE(S) GUARANTEED:

KEEP THIS CERTIFICATE IN A SAFE PLACE, IF LOST, STOLEN, MUTILATED OR DESTROYED,
THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.

BANKNOTE CORP. OF AMERICA-BROWNS SUMMIT-(WALL STREET)-1-909017-942 -BLACKROCK,
INC.-PROOF #1-9/13/99-CKM/MLM

<PAGE>

EXHIBIT 10.8

SERVICES AGREEMENT
------------------

THIS SERVICES AGREEMENT ("Agreement") is made as of ________, 1999 by and
between PNC Bank Corp. ("Service Provider") and BlackRock, Inc. ("BlackRock").

BACKGROUND
----------

Service Provider currently provides to BlackRock certain services.
BlackRock has requested that Service Provider continue such services, and
Service Provider has agreed to provide such services, on the terms and
conditions set forth in this Agreement.

TERMS
-----

In consideration of the terms and conditions of this Agreement and intending to
be legally bound, Service Provider and BlackRock agree as follows:

1. Provision of Services. During the term of this Agreement, Service Provider
---------------------
shall provide to BlackRock the services (the "Services") on the terms and
conditions set forth in this Agreement.

2. Services Charges and other Terms. With respect to the period from the
--------------------------------
effective date of this Agreement through the end of the 1999 fiscal year,
the prices, pricing methodology and other terms of the Services shall be
those in effect as of September 1, 1999, subject to any adjustments imposed
by the Service Provider that are generally applicable to its business
units. BlackRock shall negotiate in good faith with the Service Provider to
establish the prices, pricing methodology and other terms of the Services
for each subsequent fiscal year during the term of this Agreement.

3. Cooperation. Each party shall observe the normal security and other
-----------
operational procedures in place at the other party's offices.

4. Audits and Regulators. In connection with the Services, in recognition of
---------------------
the fact that both parties are subject to audits and to regulation and
examination by governmental authorities, each party shall cooperate fully
in all audits and regulatory examinations of the other party as may be
reasonably requested by such other party.

5. Provision of Corporate Records. In connection with the Services, subject
------------------------------
to applicable law and privileges, upon the prior and reasonable request by
a party for specific and identified

1
<PAGE>

agreements, documents, books, records or files, relating to or affecting
such party, the other party shall arrange, as soon as reasonably
practicable following the receipt of such request, for the provision of
appropriate copies of such records (or the originals thereof if the party
making the request has a compelling need for such originals) in the
possession of such other party, but only to the extent such items are not
already in the possession of the requesting party.

6. Access to Information. In connection with the Services, subject to
---------------------
applicable law and privileges, each of Service Provider and BlackRock
shall afford to the other and its authorized accountants, counsel and other
designated representatives reasonable access, upon reasonable prior notice
during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, books and records of such party insofar as such access is
reasonably required by the other party.

7. Reimbursement; Other Matters.
----------------------------
A party providing records or access to information to the other shall be
entitled to receive from the recipient, upon the presentation of invoices
therefor, payments for such amounts, relating to supplies, disbursements
and other out-of-pocket expenses, as may be reasonably incurred in
providing such records or access to information.

8. Representations and Warranties; Standards of Care. Service Provider
-------------------------------------------------
represents and warrants that the Services will be provided (a) by competent
personnel and (b) on substantially the same basis as provided to Service
Provider's other recipients or for Service Provider's own use.

9. Indemnification. Each of the Parties hereto (each an "Indemnifying
----------------
Party") shall indemnify, defend, save and hold harmless the other party
hereto, its direct and indirect subsidiaries, and each party's and its
subsidiaries' officers, directors, employees and agents (collectively, the
"Indemnified Parties") from and against any and all damages incurred or
sustained by the Indemnified Parties to the extent they arise out of any
(i) breach by the Indemnifying Party of any of its covenants, agreements or
obligations contained in this Agreement or (ii) the Indemnifying Party's
negligence, willful misconduct or reckless disregard of its duties
hereunder.

For purposes of this section, "damages" shall mean all actions, costs,
damages, disbursements, obligations, penalties, liabilities, taxes, losses,
charges, expenses, assessments, judgments, settlements or deficiencies of
any nature whatsoever, whether foreseeable or unforeseeable (including,
without limitation, any interest, penalties, reasonable investigation,
legal, accounting and other costs and expenses incurred in the
investigation, collection, prosecution and defense of any action, suit,
proceeding or claim and amounts paid in settlement) that may be imposed or
otherwise incurred or suffered by an Indemnified Party; provided, however,
that damages shall exclude, and Service Provider shall not have liability
to the Indemnified Parties under this Agreement for, consequential,
special, exemplary or punitive damages.

2
<PAGE>

10. Confidentiality. The following categories of information shall be
---------------
considered as confidential ("Confidential Information") under this
Agreement: (a) all information, files and data relating to customers of
Service Provider and BlackRock and their subsidiaries; (b) all business
plans, studies, forecasts, analyses and similar projections relating to
Service Provider and BlackRock and their subsidiaries; and (c) all
other information specifically labeled in writing as "confidential."
Confidential Information shall not include information that (x) enters the
public domain other than by any unauthorized disclosure hereunder, (y) was
known by a party prior to its disclosure by the other party hereunder, or
(z) rightfully comes into the possession of a party from a third party
under no obligation of confidence. Service Provider and BlackRock shall
keep the Confidential Information in confidence and shall safeguard it with
at least the same degree of diligence as it protects its own similar
confidential information. Neither party shall, without the prior written
consent of the other party, disclose the Confidential Information to anyone
other than, on a need-to-know basis only, its employees, auditors, agents
under a contractual duty of confidence with respect to the Confidential
Information, governmental regulatory or examination authorities, or as
otherwise required by applicable law. To the extent that a party hereto is
compelled by judicial or administrative process to disclose such
information under circumstances in which any evidentiary privilege may be
available, such party agrees to assert such privilege in good faith prior
to making such disclosure. Each of the parties hereto agrees to immediately
consult with the other party in connection with any such judicial or
administrative process, including, without limitation, in determining
whether any privilege is available, and further agrees to allow each such
relevant party and its counsel to participate in any hearing or other
proceeding (including, without limitation, any appeal of an initial order
to disclose) in respect of such disclosure and assertion of privilege. Each
party agrees that a breach of these confidentiality requirements could be
damaging, that any remedy at law is inadequate, that damages would be
difficult to calculate and that injunctive relief against further
disclosure is appropriate.

11. Disaster Backup. Service Provider shall provide, where applicable, backup
---------------
or disaster recovery capability for the Services provided hereunder, or for
any data, files or the documents or material furnished by BlackRock to
Service Provider hereunder.

12. Year 2000 Readiness. Service Provider (a) has reviewed its departments,
-------------------
divisions, groups, business and operations, (b) has developed or is
developing a program to remediate or replace computer applications and
systems, and (c) has developed a testing plan to test the remediation or
replacement of computer application and systems, in each case, to address
on a timely basis the risk that certain computer applications and systems
used by Service Provider may be unable to recognize and perform properly
date sensitive functions involving dates prior to and after December 31,
1999, including dates such as February 29, 2000 (the "Year 2000
Challenge"). To the best of Service Provider's knowledge and belief, the
reasonably foreseeable consequences of the Year 2000 Challenge will not
adversely effect Service Provider's ability to perform its duties and
obligations under this Agreement.

13. Term; Termination. Unless otherwise agreed in writing by the parties, the
-----------------
term of this Agreement shall commence on the date first set forth above and
shall terminate upon the mutual agreement of the parties.

3
<PAGE>

14. Upon Nonrenewal or Termination. Upon nonrenewal or termination of this
-------------------------------
Agreement with respect to any Services for any reason and subject to
applicable law (including, but not limited to, recordkeeping requirements
of BlackRock and its subsidiaries), each party, at the request of the other
party, shall promptly either return to the other party all applicable
Confidential Information of the other party then in its possession or
certify in writing that all such Confidential Information has been
destroyed. As to all other records, files, documents or other material
belonging to one party which are in the possession of the other party at
termination, the party holding such material shall return it to the other
party at its request; provided the party requesting such return shall
reimburse the returning party the reasonable out-of-pocket expenses, if
any, incurred in implementing such return. In the alternative, the parties
may agree upon the disposition of such material.

15. Notices. Any notices permitted or required by this Agreement shall, unless
-------
otherwise agreed, be in writing and shall be deemed effective when
received. Effective notices may be given and delivered by mail, by
courier service or by facsimile transmission. Notices shall be addressed as
follows:

if to BlackRock:

BlackRock, Inc.
345 Park Avenue
New York, NY 10154
Attn: General Counsel
Facsimile: (212) 409-3744

if to Service Provider:

PNC Bank Corp
One PNC Plaza
249 5/th/ Avenue
Pittsburgh, PA 15222
Attn: General Counsel
Facsimile: (412) 768-2875

or to such other address as either party may by notice hereunder advise the
other as its new address for receipt of notices.

16. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

4
<PAGE>

17. No Waiver. No term or provision hereof shall be deemed waived and no
---------
breach excused, unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented. Any consent by
either party to, or waiver of, a breach by the other, whether express or
implied, shall not constitute a consent to, waiver of, or excuse of any
other different or subsequent breach.

18. Assignment. Service Provider may assign its rights and delegate its duties
----------
hereunder to any affiliate, provided that (a) Service Provider gives
BlackRock thirty (30) days' prior written notice and (b) Service Provider
and such delegate (or assignee) promptly provide such information as
BlackRock may request, and respond to such questions as BlackRock may
ask, relative to the delegation (or assignment), including (without
limitation) the capabilities of the delegate (or assignee), to the
reasonable satisfaction of BlackRock.

19. Captions. The captions in this Agreement are provided for convenience of
--------
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.

20. Governing Law. This Agreement shall be deemed to be a contract made in
-------------
Delaware and governed by Delaware law, without regard to principles of
conflicts of laws.

21. Partial Invalidity. 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; provided, however, that if
such provision constitutes the essence of this Agreement then this
Agreement shall be deemed terminated without such termination constituting
a breach hereof.

22. Parties in Interest. This Agreement shall be binding upon and inure to the
-------------------
benefit of the parties hereto and their successors and assigns. This
Agreement is not for the benefit of any other person or entity, and there
shall be no third party beneficiaries hereof.

5
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers with the intent of being legally bound hereby.

BlackRock, Inc.

By:______________________________

Title:___________________________

PNC Bank Corp.

By:______________________________

Title:___________________________

<PAGE>

EXHIBIT 21.1

Subsidiaries of BlackRock, Inc.

The following table lists the direct and indirect subsidiaries of BlackRock,
Inc. as of June 30, 1999. In accordance with Item 601(21) of Regulation S-K,
the omitted subsidiaries considered in the aggregate as a single subsidiary
would not constitute a "significant subsidiary" as defined under Rule 1-02(w) of
Regulation S-X.

Jurisdiction of Incorporating or
Name Organization
---- ------------
<S> <C>
BlackRock Advisors, Inc. Delaware
(100% owned by BlackRock)

BlackRock Institutional Management Delaware
Corporation (100% owned by BlackRock)

BlackRock Financial Management, Inc. Delaware
(100% owned by BlackRock)

</TABLE>

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference of our firm under the caption "Experts" and
to the use of our report on the Consolidated Financial Statements of BlackRock,
Inc. and subsidiaries dated February 26, 1999, in this Registration Statement
on Form S-1 (No. 333-78367) and the related Prospectus of BlackRock, Inc. to be
filed on or about September 24, 1999.

/s/ Ernst & Young LLP

New York, New York

September 24, 1999

<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 76,262
<SECURITIES> 2,306
<RECEIVABLES> 103,439
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 16,737
<DEPRECIATION> 18,177
<TOTAL-ASSETS> 403,252
<CURRENT-LIABILITIES> 0
<BONDS> 153,200
0
0
<COMMON> 53,105
<OTHER-SE> 78,973
<TOTAL-LIABILITY-AND-EQUITY> 403,252
<SALES> 180,093
<TOTAL-REVENUES> 180,093
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 129,466
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,121
<INCOME-PRETAX> 44,799
<INCOME-TAX> 18,813
<INCOME-CONTINUING> 25,986
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,986
<EPS-BASIC> 130.39
<EPS-DILUTED> 129.97

</TABLE>