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SIGNATURE HENRY GABBAY
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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E:\MATTHEWS\FUNDS\BLCKRCK\BBTNSR.77C
For the semi-annual period ended June 30, 1997
File number 811-6284
SUB-ITEM 77C
Submission of Matters to a Vote of Security Holders
An Annual Meeting of Shareholders was held on
April 15, 1997. At such meeting the shareholders
approved the selection of auditors and the election of
directors. Pursuant to Instruction 2 of this Sub-Item,
information as to these matters has not been included
in this Attachment. In addition, the Shareholders
considered and approved a proposal to approve a new
investment advisory agreement with BlackRock Financial
Management, Inc. that eliminates the step-down in the
investment advisory fee schedule. The number of
affirmative votes cast in favor of this proposal were
25,086,769 and the number of negative votes cast in
opposition to this proposal were 5,5146,309. The
Shareholders also disapproved a proposal to change the
Fund from a closed-end to a open-end fund. The number
affirmative votes cast in favor of this proposal were
7,205,998 and the number of negative votes cast in
opposition to this proposal were 22,788,582.
E:\MATTHEWS\FUNDS\BLCKRCK\BQTEXH.77Q
For the semi-annual period ended June 30, 1997
File number 811-6284
SUB-ITEM 77Q1
Exhibits
(e) Amended Investment Advisory Contract.
1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated April 15, 1997, between The BlackRock 1998
Term Trust Inc. ("BBT") (the "Trust"), a corporation, and
BlackRock Financial Management, Inc. (the "Adviser"), a Delaware
corporation.
In consideration of the mutual promises and agreement herein
contained and other good and valuable consideration, the receipt
of which is hereby acknowledged, it is agreed by and between the
parties hereto as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to
act as investment adviser to the Trust with respect to the
investment of the Trust's assets and to supervise and arrange the
purchase of securities for and the sale of securities held in the
investment portfolio of the Trust.
2. Duties and obligations of the Adviser with respect to
investments of assets of the Trust
(a) Subject to the succeeding provisions of this section
and subject to the direction and control of the Trust's Board of
Directors, the Adviser shall (i) act as investment adviser for
and supervise and manage the investment and reinvestment of the
Trust's assets and in connection therewith have complete
discretion in purchasing and selling securities and other assets
for the Trust and in voting, exercising consents and exercising
all other rights appertaining to such securities and other assets
on behalf of the Trust; (ii) supervise continuously the
investment program of the Trust and the composition of its
investment portfolio; and (iii) arrange, subject to the
provisions of paragraph 3 hereof, for the purchase and sale of
securities and other assets held in the investment portfolio of
the Trust.
(b) In the performance of its duties under this Agreement,
the Adviser shall at all times conform to, and act in accordance
with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940 (the "Act"), and of any rules or
regulations in force thereunder; (ii) any other applicable
provision of law; (iii) the provisions of the Articles of
Incorporation and By-Laws of the Trust, as such documents are
amended from time to time; (iv) the investment objective and
policies of the Trust as set forth in its Registration Statement
on Form N-2; and (v) any policies and determinations of the Board
of Directors of the Trust.
(c) The Adviser will bear all costs and expenses of its
partners and employees and any overhead incurred in connection
with its duties hereunder and shall bear the costs of any
salaries or directors fees of any officers or directors of the
Trust who are affiliated persons (as defined in the Act) of the
Adviser except that the Board of Directors of the Trust may
approve reimbursement to the Adviser of the pro rata portion of
the salaries, bonuses, health insurance, retirement benefits and
all similar employment costs for the time spent on Trust
operations (other than the provisions of investment advice) of
all personnel employed by the Adviser who devote substantial time
to Trust operations or the operations of other investment
companies advised by the Adviser.
(d) The Adviser shall give the Trust the benefit of its
best judgment and effort in rendering services hereunder, but the
Adviser shall not be liable for any act or omission or for any
loss sustained by the Trust in connection with the matters to
which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard
of its obligations and duties under this Agreement.
(e) Nothing in this Agreement shall prevent the Adviser or
any partner, officer, employee or other affiliate thereof from
acting as investment adviser for any other person, firm or
corporation, or from engaging in any other lawful activity, and
shall not in any way limit or restrict the Adviser or any of its
partners, officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the
accounts of others for whom it or they may be acting, provided,
however that the Adviser will undertake no activities which, in
its judgment, will adversely affect the performance of its
obligations under this Agreement.
3. Portfolio Transactions and Brokerage
The Adviser is authorized, for the purchase and sale of the
Trust's portfolio securities, to employ such securities dealers
as may, in the judgment of the Adviser, implement the policy of
the Trust to obtain the best net results taking into account such
factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general
execution and operational facilities and the firm's risk in
positioning the securities involved. Consistent with this
policy, the Adviser is authorized to direct the execution of the
Trust's portfolio transactions to dealers and brokers furnishing
statistical information or research deemed by the Adviser to the
useful or valuable to the performance of its investment advisory
functions for the Trust.
4. Compensation of the Adviser
(a) The Trust agrees to pay to the Adviser and the Adviser
agrees to accept as full compensation for all services rendered
by the Adviser as such, a fee computed and payable monthly in an
amount equal to .40% of the Trust's average weekly net asset
value on an annualized basis until termination of the Trust
pursuant to its Articles of Incorporation. For any period less
than a month during which this Agreement is in effect, the fee
shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may
be.
(b) For purposes of this Agreement, the net assets of the
Trust shall be calculated pursuant to the procedures adopted by
resolutions of the Directors of the Trust for calculating the net
asset value of the Trust's shares or delegating such calculations
to third parties.
5. Indemnity
(a) The Trust hereby agrees to indemnify the Adviser and
each of the Adviser's partners, officers, employees, agents,
associates and controlling persons and the partners, officers,
employees and agents thereof (including any individual who serves
at the Advisers request as director, officer, partner, trustee or
the like of another corporation) (each such person being an
"indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees (all as provided in
accordance with applicable corporate law) reasonably incurred by
such indemnitee in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which
he may be or may have been involved as a party or otherwise or
with which he may be or may have been threatened, while acting in
any capacity set forth above in this Section 5 or thereafter by
reason of his having acted in any such capacity, except with
respect to any matter as to which he shall have been adjudicated
not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust and furthermore, in
the case of any criminal proceeding, so long as he had no
reasonable cause to believe that the conduct was unlawful,
provided, however, that (1) no indemnitee shall be indemnified
hereunder against any liability to the Trust or its shareholders
or any expense of such indemnitee arising by reason of (i)
willful misfeasance, (ii) bad faith, (iii) gross negligence or
(iv) reckless disregard of the duties involved in the conduct of
his position (the conduct referred to in such clauses (i) through
(iv) being sometimes referred to herein as "disabling conduct"),
(2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any
other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best
interests of the Trust and that such indemnitee appears to have
acted in good faith in the reasonable belief that his action was
in the best interest of the Trust and did not involve disabling
conduct by such indemnitee and (3) with respect to any action,
suit or other proceeding voluntarily prosecuted by any indemnitee
as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such
indemnitee was authorized by a majority of the full Board of the
Trust.
(b) The Trust shall make advance payments in connection
with the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Trust receives a
written affirmation of the indemnitee's good faith belief that
the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Trust unless it is
subsequently determined that he is entitled to such
indemnification and if the directors of the Trust determine that
the facts then known to them would not preclude indemnification.
In addition, at least one of the following conditions must be
met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Trust shall be insured against losses
arising by reason of any lawful advances, or (C) a majority of a
quorum consisting of directors of the Trust who are neither
"interested persons" of the Trust (as defined in Section
2(a)(19) of the Act) nor parties to the proceeding
("Disinterested Non-Party Directors") or an independent legal
counsel in a written opinion, shall determine, based on a review
of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by
a court or other body before whom the proceeding was brought that
such indemnitee is not liable by reason of disabling conduct or,
(2) in the absence of such a decision, by (i) a majority vote of
a quorum of the Disinterested Non-party Directors of the Trust,
or (ii) if such a quorum is not obtainable or even, if
obtainable, if a majority vote of such quorum so directs,
independent legal counsel in a written opinion. All
determinations that advance payments in connection with the
expense of defending any proceeding shall be authorized shall be
made in accordance with the immediately preceding clause (2)
above.
The rights accruing to any indemnitee under these provisions
shall not exclude any other right to which he may be lawfully
entitled.
6. Duration and Termination
This Agreement shall become effective on the date it is
approved by the stockholder of the Trust and shall continue in
effect for a period of two years and thereafter from year to
year, but only so long as such continuation is specifically
approved at least annually in accordance with the requirements of
the Act.
This Agreement may be terminated by the Adviser at any time
without penalty upon giving the Trust sixty days written notice
(which notice may be waived by the Trust) and may be terminated
by the Trust at any time without penalty upon giving the Adviser
sixty days notice (which notice may be waived by the Adviser),
provided that such termination by the Trust shall be directed or
approved by the vote of a majority of the Directors of the Trust
in office at the time or by the vote of the holders of a
"majority" (as defined in the Act) of the voting securities of
the Trust at the time outstanding and entitled to vote. This
Agreement shall terminate automatically in the event of its
assignment (as "assignment" is defined in the Act).
7. Notices
Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from
time to time for the receipt of such notice and shall be deemed
to be received on the earlier of the date actually received or on
the fourth day after the postmark if such notice is mailed first
class postage pre-paid.
8. Governing Law
This Agreement shall be construed in accordance with the
laws of the State of New York for contracts to be performed
entirely therein without reference to choice of law principles
thereof and in accordance with the applicable provisions of the
Act.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized
officers, all as of the day and the year first above written.
THE BLACKROCK TRUSTS
By_______________________________________
Ralph L. Schlosstein,
President
BLACKROCK FINANCIAL MANAGEMENT, INC.
By_______________________________________
Laurence D. Fink,
Chairman & Chief Executive Officer
E:\DGARFIEL\FUNDS\BLKROCK\MISC\RNYNSR.SG1
This report is signed on behalf of the Registrant
in the City of New York and State of New York on the
day of August, 1997.
THE BLACKROCK 1998 TERM TRUST INC.
Witness: /s/ James Kong By:
/s/ Henry Gabbay James Kong
Henry Gabbay
Assistant Treasurer
Treasurer
