10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File No. 001-15305

BlackRock, Inc.

(Exact name of registrant as specified in its charter)

Delaware	51-0380803
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

40 East 52^nd Street, New York, NY 10022

(Address of principal executive offices)

(212) 810-5300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Stock, $.01 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of the registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Yes  x    No  ¨

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2004 was approximately $906 million. There is no non-voting common stock of the registrant outstanding.

As of January 31, 2005, there were 19,766,637 shares of the registrant’s class A common stock issued and outstanding and 44,692,843 shares of the registrant’s class B common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference herein:

Portions of the definitive Proxy Statement of BlackRock, Inc. filed pursuant to Regulation 14A of the general rules and regulations under the Securities Exchange Act of 1934, as amended, for the 2005 annual meeting of stockholders to be held on April 27, 2005 (“Proxy Statement”) are incorporated by reference into Part III of this Form 10-K. The incorporation by reference herein of portions of the Proxy Statement shall not be deemed to specifically incorporate by reference the information referred to in Item 402(a) (8) and (9) and Item 306(c) and (d) of Regulation S-K.

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BlackRock, Inc.

Index to Form 10-K

TABLE OF CONTENTS

	PART I
Item 1	Business	1
Item 2	Properties	21
Item 3	Legal Proceedings	21
Item 4	Submission of Matters to Vote of Security Holders	22
	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6	Selected Financial Data	25
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	59
Item 8	Financial Statements and Supplementary Data	60
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	60
Item 9A	Controls and Procedures	60
	PART III
Item 10	Directors and Executive Officers of the Registrant	61
Item 11	Executive Compensation	61
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	61
Item 13	Certain Relationships and Related Transactions	61
Item 14	Principal Accountant Fees and Services	61
	PART IV
Item 15	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	62

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Part I

Item 1. BUSINESS

Overview

BlackRock, Inc., a Delaware corporation formed in 1998 (together, with its subsidiaries, “BlackRock” or the “Company”), is one of the largest investment management firms in the United States, with approximately $342 billion of assets under management at year-end 2004. We manage fixed income, cash management, equity and alternative investment products on behalf of institutional and individual investors worldwide. We also offer investment tools, outsourcing and advisory services to institutional investors under the BlackRock Solutions^® brand name.

BlackRock is a majority owned indirect subsidiary of The PNC Financial Services Group, Inc. (“PNC”). As of December 31, 2004, PNC indirectly owned approximately 71% of BlackRock. BlackRock is headquartered in New York City and has offices in Boston, Edinburgh, Hong Kong, Morristown, San Francisco, Singapore, Sydney, Tokyo and Wilmington.

In 2004, BlackRock’s total assets under management increased by approximately $32.4 billion, or 10%, from year-end 2003 levels. Over the past five years, assets under management have grown by over $177.2 billion, which represents a compound annual growth rate of 16%. Approximately 74% of growth in assets under management has been derived from net new business, as opposed to market appreciation. At December 31, 2004, fixed income products represented 71%, cash management products represented 23%, equity products represented 4% and alternative investment products represented 2% of BlackRock’s total assets under management. Approximately 73% of the assets are managed in separate accounts and 27% are managed in mutual funds, including our open-end fund families, BlackRock Funds and BlackRock Liquidity Funds.

Assets Under Management

By Asset Class

	At December 31,												5 Year CAGR
	1999		2000		2001		2002		2003		2004
	($ in millions)
Fixed Income	$	86,438	$	116,878	$	135,242	$	175,586	$	214,356	$	240,709	23	%
Liquidity		57,521		61,186		79,753		78,512		74,345		78,057	6	%
Equity		18,472		22,235		18,280		13,464		13,721		14,792	-4	%
Alternative Investments		2,086		3,470		5,309		5,279		6,934		8,202	31	%
Total	$	164,517	$	203,769	$	238,584	$	272,840	$	309,356	$	341,760	16	%

CAGR = Compound Annual Growth Rate

Our ability to increase revenue, earnings and stockholder value over time is predicated on our ability to generate net new business in investment management and BlackRock Solutions products and services. Our new business efforts are dependent on our ability to achieve clients’ investment objectives in a manner consistent with their risk preferences and to deliver excellent client service. All of our efforts require the commitment and contributions of our employees. Accordingly, our ability to retain and attract talented professionals to BlackRock is critical to our long-term success.

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Item 1. BUSINESS (continued)

Overview (continued)

BlackRock’s business results largely reflect our position as a leading provider of fixed income asset management services to institutional clients. Of the $240.7 billion of fixed income assets we managed at December 31, 2004, approximately $216.9 billion, or 90%, were from institutional clients, with the remaining $23.8 billion managed in our open-end and closed-end fixed income mutual funds. We also are among the largest managers of institutional money market funds and other cash management services. We have made significant investments to expand our product offerings to include equity and alternative investment products, and to enhance our ability to serve the needs of individual investors. In addition, we continue to invest in our BlackRock Solutions effort, which achieved revenue growth of 37% in 2004.

We have generated substantial increases in assets under management, which has supported strong revenue and earnings growth over time. Our financial condition remains strong, as evidenced by sizable increases in corporate liquidity (cash and investments) and stockholders’ equity.

In January 2005, the Company closed its acquisition of SSRM Holdings, Inc. (SSR) from MetLife, Inc. for consideration of approximately $274 million, consisting of $237 million in cash and 550,000 restricted shares of our class A common stock with the cash portion financed through the issuance of $250 million in convertible debentures. The debentures bear interest at a rate of 2.625% per annum and are convertible at an initial conversion rate of 9.7282 shares per $1,000 principal amount, representing a 32.5% premium from our last reported sale price on February 16, 2005.

	2000		2001		2002		2003		2004		4 Year CAGR
Revenue	$	476,872	$	533,144	$	576,977	$	598,212	$	725,311	11	%
Operating Income, as adjusted1	$	143,038	$	170,176	$	215,139	$	228,276	$	255,384	16	%
Net Income, as adjusted1	$	87,361	$	107,434	$	133,249	$	155,402	$	177,813	19	%
Diluted EPS, as adjusted1	$	1.35	$	1.65	$	2.04	$	2.36	$	2.70	19	%
Cash & Investments	$	205,906	$	325,577	$	465,793	$	550,864	$	685,170	35	%

¹ For the year ended December 31, 2004, operating income was $165.8 million, net income was $143.1 million and diluted earnings per share were $2.17, representing 4 year CAGR of 4%, 13% and 13%, respectively.

Operating income as adjusted, reflects the exclusion of Long-Term Retention and Incentive Plan (LTIP) expense to be funded by PNC ($85.1 million) and appreciation of Rabbi trust assets ($4.5 million). Net income and diluted earnings per share, as adjusted, reflect the exclusion of the PNC LTIP funding obligation ($53.7 million and $0.81, respectively) and professional fees associated with the acquisition of SSR ($0.6 million and $0.01, respectively). These items were partially offset by New York State and City tax benefits ($18.1 million and $0.27, respectively and the sale of our interest in Trepp LLC ($1.6 million and $0.02, respectively).

Management believes that adjusted operating income, net income and earnings per diluted share are effective indicators of the Company’s profitability and financial performance over time. PNC’s LTIP funding obligation has been excluded because, exclusive of the impact related to LTIP participants’ put options, these non-cash charges will not impact BlackRock’s book value. Appreciation on Rabbi trust assets associated with our deferred compensation plans has been excluded because investment performance of these assets has a nominal impact on all of these indicators. The remaining items disclosed above, which have been deemed non-recurring by management, have been excluded to help ensure the comparability of this information to prior reporting periods.

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Item 1. BUSINESS (continued)

Overview (continued)

While we operate in a global marketplace characterized by market volatility and economic uncertainty, we believe the following factors position us well to produce solid relative returns for stockholders over time:

• We achieved competitive investment performance in a majority of our products in 2004. Specifically, 88% of our institutional fixed income composites outperformed their benchmarks, 96% of our taxable bond fund assets, 77% of our equity fund assets and all of our institutional money market funds ranked in the top half of their respective Lipper peer groups for the year-ended December 31, 2004.*

• We continue to experience favorable operating leverage in our fixed income and cash management products. As equity assets under management grow, we expect to realize additional, potentially significant, operating leverage.

• We continue to see robust growth and strong interest in our BlackRock Solutions products and services.

• BlackRock completed its first significant acquisition, closing the purchase of SSR in January 2005.

* Past performance is no guarantee of future results. Mutual fund performance data assumes the reinvestment of dividends and capital gains distributions and reflects the performance of the Institutional Class, with the exception of the BlackRock Funds Government Income Portfolio, which reflects the performance of the Investor A Shares class. BlackRock waives fees, without which performance would be lower. Investments in BlackRock Funds and BlackRock Liquidity Funds are neither insured nor guaranteed by the U.S. government. Relative peer group performance is based on quartiles from Lipper Inc. 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 funds with comparable objectives are in the first quartile and funds with returns in the next 25% of a peer group are in the second quartile. Some funds have less than five years of performance. Fixed Income Portfolios of the BlackRock Funds: The Core Bond Total Return and the Managed Income Portfolios are in the Intermediate Investment Grade Debt Lipper peer group. The Intermediate Bond Portfolio is in the Short-Intermediate Investment Grade Debt Lipper peer group. The Low Duration Bond Portfolio is in the Short Investment Grade Debt Lipper peer group. The High Yield Bond Portfolio is in the High Current Yield Lipper peer group and the GNMA Portfolio is in the GNMA Lipper peer group. The Intermediate Government Portfolio is in the Intermediate US Government Lipper peer group and the Government Income Portfolio is in the General US Government Lipper peer group. Equity Portfolios of the BlackRock Funds: The Investment Trust and Large Cap Value Equity Portfolios are in the Large Cap Core and Multi-Cap Value Lipper peer groups, respectively. The Index Equity Portfolio is in the S&P 500 Index Objective Lipper peer group. The Mid-Cap Value Equity Portfolio is in the Mid Cap Value Lipper peer group. The Asset Allocation Portfolio is in the Flexible Portfolio Lipper peer group. The U.S. Opportunities Portfolio is in the Mid Cap Core Lipper peer group. The International Equity Portfolio is in the International Multi-Cap Core Lipper peer group. The Small Cap Core Portfolio is in the Small Cap Core Lipper peer group. The Mid-Cap Growth Portfolio is in the Mid Cap Growth Lipper peer group. BlackRock Liquidity Funds: TempFund and TempCash are in the Institutional Money Market Lipper peer group, and Federal Trust Fund and FedFund are in the Institutional U.S. Government Money Market Lipper peer group. T-Fund and Treasury Trust Fund are in the Institutional U.S. Treasury Lipper peer group. MuniCash and MuniFund are in the Institutional Tax-Exempt Money Market Lipper peer group. California Money Fund and New York Money Fund are in the California Tax-Exempt and New York Tax-Exempt Money Market Lipper peer groups, respectively. As with other money market funds, there is no assurance that the BlackRock Liquidity Funds will maintain a stable net asset value of $1.00 per share. Composites Performance: Results do not reflect the deduction of management/advisory fees and other expenses, which will reduce a client’s return. For example, assuming an annual gross return of 8% and an annual management/advisory fee of 0.25%, the net annualized total return of a composite would be 7.74% over a 5-year period. BlackRock is the source of benchmark data for composites and Frank Russell Company is the source of peer universe data for fixed income and equity composites. Some BlackRock composites have less than three years of performance.

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Item 1. BUSINESS (continued)

Products

BlackRock offers a wide variety of fixed income, cash management, 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, performance fees expressed as a percentage of returns realized in excess of agreed-upon targets.

Fixed Income

BlackRock’s fixed income business continued to expand in 2004, as assets under management increased 12% to $240.7 billion at December 31, 2004. We offer investors a broad range of products that span global bond markets and sectors, as well as various maturities along the yield curve. All portfolios are managed by BlackRock’s fixed income team, which is comprised of sector specialists who help formulate broad investment strategy and implement sector-specific themes in accordance with each portfolio’s investment objectives and guidelines. Our investment professionals are supported by extensive analytical tools and a shared research database that includes reports from both equity and credit analysts throughout the firm. Investment operations are facilitated by BlackRock’s proprietary portfolio management system, Aladdin^®, and by our experienced team of operations, administration and compliance professionals.

BlackRock’s fixed income portfolio management team has achieved competitive investment performance by consistently employing a disciplined process designed to add incremental returns in excess of our benchmarks. Eighty-eight percent or more of our institutional composites outperformed their benchmarks and 89% or more of taxable bond fund assets ranked in the top half of their Lipper peer groups for the 1, 3, 5, 7 and 10-year periods ended December 31, 2004.*

Net new business in 2004 totaled $23.3 billion before giving effect to $7.7 billion of outflows resulting from client mergers and corporate events. New assignments spanned our product base, resulting in greater diversification within fixed income. Core bond mandates, for example, have grown at a compound annual rate of 19% over the past five years to $94.5 billion at December 31, 2004. Over the same period, targeted duration and global bond assets have grown at an even faster pace, albeit from smaller bases. As a result, the proportion of fixed income assets invested in targeted duration portfolios increased from 24% to 30% since 1999, and global bond mandates expanded from less than 1% to 8% of total fixed income assets over the same period.

* See footnote above.

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Item 1. BUSINESS (continued)

Products (continued)

Fixed Income (continued)

During the year, we also further diversified our client base geographically. Non-U.S. investors sought additional exposure to the U.S. and global bond markets. These clients awarded BlackRock net new business of $11.6 billion, which represented nearly three-quarters of total net inflows in fixed income during the year. U.S. investors also contributed to our asset growth during the year, although asset allocation initiatives were focused more heavily on absolute return and other alternative investment strategies.

In 2004, we achieved greater diversification across client segments as well. Rebalancing by pension plan sponsors abated and net inflows from tax-exempt investors totaled $8.6 billion at December 31, 2004. Insurance companies and other financial institutions continued to pursue outsourcing options, awarding BlackRock $6.4 billion of net new business. Finally, we received $653 million of net inflows from private client and mutual fund investors.

Equity

During 2004, BlackRock’s equity assets under management rose 8% to $14.8 billion. Our equity products, which span the risk spectrum, employ either an active quantitative approach or an active fundamental approach, both of which seek to add value principally through stock selection. The former utilizes quantitative models to assess company data and predict expected returns on individual stocks, and a portfolio construction process that targets “best ideas,” while carefully controlling risks taken relative to the benchmark. The latter uses company research conducted by BlackRock’s equity analysts to develop views on individual stocks, and a portfolio construction process that targets “best ideas” across all sectors, with less emphasis on deviations from the benchmark other than the applicable capitalization range. Portfolios are managed by dedicated teams that benefit from shared information and a common trading, systems, operations, administration and compliance platform.

International equity assets declined 8% during the year to $8.0 billion. Our Edinburgh-based team manages the bulk of these assets in a variety of broad and regional mandates. Net outflows in these products, which totaled $2.1 billion, occurred largely during the first half of the year following a period of weak performance. By mid-year, performance had stabilized and outflows abated. For the year, half of our institutional composites were ranked in the top half of their peer groups.* In addition, the BlackRock Funds BlackRock International Equity Portfolio, the only fund the team managed for U.S. investors, ranked in the top quartile of its peer universe for 2004.*

Domestic equity assets, which include large, mid and small cap core, value, growth and opportunities portfolios, grew 35% in 2004 to $6.8 billion. Net new business of $1.1 billion fueled asset growth for each of our U.S.-based portfolio management teams. Seventy percent of our institutional composites ranked in the top half of their peer groups and all of our active quantitative equity composites outperformed their benchmarks in 2004.* In addition, 74% of our mutual fund assets ranked in the top half of their peer groups, and the BlackRock Funds Investment Trust Portfolio (formerly, the BlackRock Funds Select Equity Portfolio) ranked as one of the five best performing large cap core equity funds for 2004.*

* See footnote above.

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Item 1. BUSINESS (continued)

Products (continued)

Equity (continued)

In August 2004, we announced the acquisition of SSR, which we closed in January 2005. In part, this acquisition was motivated by the opportunity to expand our equity capabilities and broaden the range of products we offer. The acquisition enables us to expand resources available to investors in our small and mid cap growth, value and opportunities products and to add active fundamental large cap growth and asset allocation strategies. In addition, SSR’s energy team joined BlackRock and, before closing the SSR acquisition, we jointly raised $635 million in a closed-end fund in December 2004. In total, twenty equity investment professionals from SSR joined BlackRock, increasing breadth and depth in our equity business.

Cash Management

BlackRock provides cash management services to institutional and individual investors through a variety of money market funds and customized portfolios. At year-end 2004, assets managed in these strategies totaled $78.1 billion, up 5% from year-end 2003. Net new business totaled $3.7 billion during the year, although flows varied widely across products. Improved coordination between our cash management sales and investment professionals led to enhanced competitiveness of our portfolios and the introduction of selected new products tailored to meet institutional investor needs. Although average assets declined slightly from the prior year, the decline was less than that experienced by key competitors and our market share in institutional funds increased for the first time in years.

Money market funds represented 79% of our total cash management assets at December 31, 2004. Asset flows in these products can be quite volatile, particularly in response to prevailing monetary policy. Typically, when the Federal Reserve raises rates, as they did five times in 2004, yields on direct investments reflect the increase immediately (if not in anticipation), while money market fund yields reflect the increase more slowly. Institutional investors exploit this short-term yield differential by shifting assets out of money market funds and into direct investments. As expected, asset flows were volatile throughout 2004. We ended the year with net subscriptions of $3.7 billion across our institutional and retail funds.

U.S. money market funds are highly regulated to ensure that the fund shares maintain a constant dollar net asset value. These funds offer exceptional liquidity to investors, but are constrained in their ability to meet broader investment objectives. Investors seeking yield enhancement have limited choices such as taking additional credit risk or investing in longer-term securities. We work directly with clients to consider these options relative to their objectives and to offer appropriate investment alternatives. Inflows in customized portfolios (other than securities lending) totaled $3.0 billion in 2004.

PFPC Trust Company, a subsidiary of PNC, offers securities lending agent services to its mutual fund and other custody clients as well as a limited number of third party lending agent clients. As an accommodation and for minimal fees, BlackRock manages the cash collateral generated when these clients lend the securities in their portfolios. These services are most often used by equity mutual funds. Accordingly, flows in these portfolios are highly sensitive to, among other things, equity market conditions. In 2004, securities lending assets declined by $3.0 billion, almost fully reversing the $3.5 billion increase we experienced in 2003.

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Item 1. BUSINESS (continued)

Products (continued)

Cash Management (continued)

The outlook for BlackRock’s cash management business is heavily influenced by the rate environment. The Federal Reserve raised the discount rate again in February 2005, and further tightening is expected. Several factors, however, are expected to counterbalance the effect of rising rates. For example, the American Jobs Creation Act of 2004 provides incentives for multinational companies to repatriate earnings of non-U.S. subsidiaries, which is leading to increased demand for cash management products. In addition, European institutions are capitalizing on opportunities to utilize Sterling and Euro-denominated cash management funds.

Alternative Investment Products

Alternative investment products typically seek to achieve attractive absolute returns and/or return profiles minimally correlated with the broader markets. BlackRock offers a variety of alternatives that capitalize on established expertise throughout the firm. In 2004, assets managed in these products increased 18% to $8.2 billion, largely due to new product offerings which enabled us to achieve net inflows of $1.9 billion in 2004, exclusive of a $0.7 billion downward adjustment to reflect of the equity rather than the assets of Anthracite Capital, Inc., a BlackRock-managed REIT.

Our fixed income team manages a number of alternative investment strategies using the same investment process that supports $240.7 billion in traditional bond portfolios at December 31, 2004. In 2004, we introduced a credit-oriented hedge fund and an opportunistic fixed income product. The latter is a “best ideas” strategy with broad latitude to invest across the yield curve, credit curve and sectors of the global bond markets. These investment strategies were well-received by our clients, and together with our existing fixed income hedge funds, attracted $1.3 billion of net new business during the year, including assets reallocated from other portfolios managed by BlackRock.

Fixed income sector specialists manage $3.0 billion of assets in collateralized debt obligations (CDOs), including $400 million raised in a new vehicle offered during 2004. CDOs are structured products that typically invest in portfolios leveraged with a mix of high yield debt and bank loans. BlackRock invests its CDO portfolios in high yield securities and bank loans and manages the assets relative to the liabilities to maintain the integrity of the structure and the credit ratings on the debt. In January 2005, a team of specialists that manages asset-backed CDOs joined BlackRock through the SSR acquisition, expanding our CDO assets under management and adding a new dimension to our structured product offerings.

Another of our fixed income sector teams supports real estate debt investments, including several alternative investment products. During 2004, we raised $311 million of capital commitments for our second real estate mezzanine debt fund, including additional allocations from investors in our first fund.

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Item 1. BUSINESS (continued)

Products (continued)

Alternative Investment Products (continued)

Our alternative investment products also include the hedge fund of funds business we acquired in April 2003. During the year, we expanded the staff and enhanced the investment process supporting these products. Assets have grown 251% since the acquisition, both as a result of strong performance and net new business. The team’s original product, BlackRock HPB Multi-Manager Partners, L.L.C. reached its five-year anniversary at year-end, outperforming the HFRI Fund of Funds Composite index for the 1, 3 and 5-year periods ended December 31, 2004.

BlackRock Solutions

Since its formation, BlackRock has developed and maintained proprietary investment analytics and operating systems to support our business. These capabilities and the intellectual capital that manages them constitute a distinct product line, BlackRock Solutions, consisting of products and services that help institutions understand and manage the risks inherent in their financial activities. In 2004, we increased revenues from systems, risk management and investment accounting services by 37% from $63.3 million to $86.5 million, as we added twelve net new assignments and completed two system implementations. In addition, our Advisory Services Group was retained on two strategic advisory engagements in its first year of operations.

BlackRock Solutions core products consist of tools that support the investment process. These include Aladdin^®, our enterprise investment system, which integrates risk analytics and information processing capabilities to support efficient workflow. A number of large institutions, including corporations, pension plans and financial institutions, have selected Aladdin as their investment operating system. Clients that do not require all of the functionality of our enterprise system can choose ANSER^®, our Web-based analytics calculator, or our Green Package^® risk reporting service. We also offer our proprietary interest rate and prepayment models, typically in combination with our other tools. All of these products are offered on a service bureau basis; we do not sell our software.

Outsourcing services enable clients, including insurance companies, financial institutions and investment managers, to take advantage of the scale of our platform. These services include non-discretionary hedge management, generally offered as an add-on to risk management advice and executed in concert with our investment professionals. We also provide investment accounting outsourcing, typically bundled with asset management services. In addition, select BlackRock Solutions clients have extended their relationships to include ancillary outsourcing services, such as performance measurement and middle and back office trade support.

Advisory services are available to help clients address a variety of financial challenges arising from performance concerns, regulatory or accounting considerations, changing risk/return objectives, or shifting strategic priorities. Clients have engaged BlackRock to provide a wide range of strategic advisory services, including consulting on balance sheet management strategies, portfolio restructuring and business divestitures. In addition, we have been retained to provide best practices business reviews, generally pertaining to risk management processes. We also provide advice with respect to development of hedging programs, typically in conjunction with Green Package reporting and often supplemented with hedge management outsourcing.

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Item 1. BUSINESS (continued)

Products (continued)

BlackRock Solutions (continued)

Investors worldwide continue to focus on a variety of risk management issues and, accordingly, interest in our services remains high. In addition to serving a growing list of clients in the U.S., we were retained on our first international assignment for a Japanese client in 2004.

Clients

BlackRock serves a diverse base of institutional and individual investors globally. We offer our products both directly and through financial intermediaries. BlackRock seeks to distinguish itself by going beyond the traditional asset manager or financial system vendor relationship – we work with our clients to help them solve problems. These problems can be relatively straightforward, such as wanting to add or change exposure to a segment of the capital markets, or more complex, such as reengineering workflow processes or evaluating strategic financial management alternatives.

In 2004, clients turned to BlackRock for a variety of services. In investment management, we were awarded $27.3 billion of net new business before giving effect to $7.7 billion of outflows resulting from client mergers and corporate events. Approximately 230 clients have retained BlackRock for multiple assignments. During the year, we also were retained on fourteen net new investment system, advisory and outsourcing assignments. While certain of these mandates were expansions of existing relationships, the majority of these mandates were from new clients.

Growing Global Presence

BlackRock continues to benefit from increasing global recognition of our capabilities and expanded resources internationally. During the year, we were awarded $10 billion of net new business from 153 clients in 34 countries, bringing total assets managed for non-U.S. clients to $73.3 billion at December 31, 2004. Net new business in non-U.S. clients included growth in assets managed for clients based in North America (ex U.S.), Asia, Europe, as well as the Middle East totaling $5.8 million, $2.3 billion, $1.2 billion and $0.7 billion, respectively, and our strategic alliances in Japan and Australia continued to expand. Non-U.S. clients are served through our offices in New York, Edinburgh, Hong Kong and Tokyo, as well as offices in Singapore and Sydney, which we opened late last year to enhance client service and to expand new business efforts in those regions.

We also continue to build our asset base for U.S. investors. In 2004, net new business from U.S. clients totaled $9.6 billion across a wide range of products, increasing total assets managed for domestic investors to $268.4 billion at year-end. New business efforts encompass direct calling on institutional investors and their consultants, as well as wholesale distribution of our open-end and closed-end mutual funds through broker-dealers and other financial intermediaries. The professionals serving these clients are based throughout the country, as well as in our New York, Boston, Morristown, San Francisco and Wilmington offices.

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Item 1. BUSINESS (continued)

Clients (continued)

Diverse Clientele Worldwide

During the year, we had positive net new business in each of our client channels. Assets managed for tax-exempt institutions, including defined benefit and defined contribution pension plans, foundations, endowments and other non-profit organizations, increased 13% to $127.5 billion at December 31, 2004. For the year, net inflows from these investors totaled $7.0 billion, with growth in both directly managed accounts and sub-advisory relationships. We have long worked with pension plan sponsors and their consultants to address changing asset allocation strategies and to consider appropriate investment opportunities. These clients increasingly demonstrate a preference for more services from fewer managers, and we believe BlackRock can benefit from this trend.

Assets under management for taxable institutions worldwide increased 13% during 2004 to $107.0 billion at year-end 2004. Our insurance asset management services, which include, risk management and accounting services capabilities, are well positioned to help these clients address industry-related issues and meet company-specific objectives. These capabilities are equally applicable to other financial institutions, which have begun seeking advice and outsourcing as a means of solving their investment challenges in a period of weak loan demand, lower yields and a flatter yield curve. Net new business during the year included $1.0 billion of bank balance sheet assets. In aggregate, net inflows from taxable institutions totaled $15.3 billion, before giving effect to the corporate event and merger-related outflows referenced earlier. In addition, three of our financial institutions clients retained BlackRock to provide risk reporting and/or investment accounting solutions.

Flows from institutional cash management investors were volatile throughout the year, largely as a result of the Federal Reserve’s raising of interest rates. At year-end, assets in our institutional cash management products were $75.1 billion, up 8% from December 31, 2003. Our new business effort benefited from improved coordination between sales and portfolio management, resulting in $8.6 billion of net inflows in all products other than securities lending portfolios, which experienced $3.0 billion of net outflows. We constantly seek ways to provide innovative cash management solutions to our clients. In 2004, these efforts focused on helping clients identify opportunities to more profitably invest in a low rate environment, while assuming little additional risk.

Our private client business works closely with financial intermediaries and advisors to offer our open-end mutual fund family, BlackRock Funds, and to develop closed-end funds that enable individual investors to capitalize on market opportunities. During the year, our efforts led to $2.2 billion of net subscriptions through third party distributors, including $1.5 billion in closed-end funds, bringing private client assets to $32.1 billion at year-end. In December we raised $635 million in a closed-end equity fund offered jointly with SSR. Expanding the scale and scope of our mutual fund activities was one of the key strategies for pursuing our acquisition of SSR. In January 2005, we merged SSR’s open-end funds into BlackRock Funds, creating a broader product line-up and more than doubling our distribution and shareholder servicing resources. Increasing regulatory costs are driving the need for greater scale in mutual funds.

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Item 1. BUSINESS (continued)

Clients (continued)

Diverse Clientele Worldwide

During the year, we had positive net new business in each of our client channels. Assets managed for tax-exempt institutions, including defined benefit and defined contribution pension plans, foundations, endowments and other non-profit organizations, increased 13% to $127.5 billion at December 31, 2004. For the year, net inflows from these investors totaled $7.0 billion, with strong growth in both directly managed accounts and sub-advisory relationships. We have long worked with pension plan sponsors and their consultants to address changing asset allocation strategies and to consider appropriate investment opportunities. These clients increasingly demonstrate a preference for more services from fewer managers, and we have positioned BlackRock to benefit from that trend. In addition, a more robust mutual fund family should be of interest to defined contribution plans and smaller institutional investors, while our expanded alternative investment offerings are likely to have appeal to foundations and endowments. These areas represent potential sources of future growth.

Assets under management for taxable institutions worldwide increased 13% during 2004 to $107.0 billion at year-end. We continued to benefit from our leadership position in insurance asset management, an outgrowth of our unique ability to bundle investment management, risk management and accounting services to help clients address industry-related issues and meet company-specific objectives. These capabilities are equally applicable to other financial institutions, which have begun seeking advice and outsourcing as a means of solving their investment challenges in a period of weak loan demand, lower yields and a flatter yield curve. Net new business during the year included $1.0 billion of bank balance sheet assets, a relatively small amount, but evidence of what we expect to be a growing trend. In aggregate, inflows from taxable institutions totaled $15.3 billion, before giving effect to the corporate event and merger-related outflows referenced earlier. In addition, four of our financial institutions clients retained BlackRock to provide risk reporting and/or investment accounting solutions.

Flows from institutional cash management investors were volatile throughout the year, largely as a result of the Federal Reserve’s tightening stance. At year-end, assets in our institutional cash management products were $75.1 billion, up 8% from December 31, 2003. Our new business effort benefited from improved coordination between sales and portfolio management, resulting in $8.6 billion of net inflows in all products other than securities lending portfolios, which experienced $3.0 billion of net outflows. We constantly seek ways to provide innovative cash management solutions to our clients. In 2004, these efforts focused on helping clients identify opportunities to more profitably invest in a low rate environment, while assuming little additional risk. We also are frequently commended for our flexible and responsive client service, which is conducted through our call center and online account management tools. We believe that these efforts, together with competitive yields on our products, will enable us to better withstand volatility in asset flows, continue to build our client base and increase our market share over time.

Our private client business works closely with financial intermediaries and advisors to offer our open-end mutual fund family, BlackRock Funds, and to develop closed-end funds that enable individual investors to efficiently capitalize on market opportunities. During the year, our efforts led to $2.2 billion of net subscriptions through third party distributors, including $1.5 billion in new closed-end funds, bringing private client assets to $32.1 billion at year-end. Notably, in December we raised $635 million in a closed-end equity fund offered jointly with State Street Research (SSR). Expanding the scale and scope of our mutual fund activities was one of the key motivations for pursuing our acquisition of SSR. In January 2005, we merged SSR’s open-end funds into BlackRock Funds, creating a broader product line-up and [more than doubling] our distribution and shareholder servicing resources. Increasing regulatory costs are driving the need for greater scale in mutual funds. With the SSR acquisition, we believe we are better positioned than ever before to work with a broader universe of financial intermediaries and advisors to achieve meaningful organic growth in products designed to meet the needs of individual investors.

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Item 1. BUSINESS (continued)

Risks

As a leading investment management firm, risk is an inherent part of BlackRock’s business. Global markets, by their nature, are prone to uncertainty and subject participants to a variety of risks. As previously discussed in this report, risk management is considered to be of paramount importance to BlackRock’s day-to-day operations. Consequently, BlackRock devotes significant resources across all its operations to the identifying, measuring, monitoring, managing and analyzing market and operating risks, including investments in personnel and technology.

Risks Related to Our Business

Change 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, in some cases, 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 because of lower investment management fees by:

• causing the value of our assets under management to decrease;

• causing the returns realized on our assets under management to decrease;

• 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; and

• causing our clients to rebalance assets away from investments that we manage into investments that we do not manage.

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 relative to the portfolio benchmarks and to our competitors 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;

• we might earn minimal or no performance fees; and

• the value of certain seed investments that we make in our funds, as well as our investments in other securities, may decline.

Loss of key employees could lead to loss of clients and a decline in our revenues

Our ability to attract and retain quality personnel has contributed significantly to our growth and success and is important to attracting and retaining clients. The market for qualified fund managers, investment analysts, financial advisers and other professionals is competitive. There can be no assurance that we will be successful in our efforts to recruit and retain the required personnel. We have encouraged the continued retention of our executives and other key personnel through measures such as providing deferred compensation and competitive annual and long-term compensation arrangements, and in the case of our chairman and chief executive officer, an employment agreement. However, there can be no assurance that we will be successful in retaining all of our key personnel. Loss of a significant number of key personnel could have an adverse effect on us.

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Item 1. BUSINESS (continued)

Risks Related to Our Business (continued)

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. Recently, the Securities and Exchange Commission (SEC) and other governmental agencies have been investigating the mutual fund industry. The SEC has adopted and proposed various rules, and legislation has been passed in Congress, the effect of which will further regulate the mutual fund industry and impose additional compliance obligations, and costs for fulfilling such obligations, on us. Violation of applicable laws or regulations could result in fines, temporary or permanent prohibition of our engagement in certain activities, reputational harm, 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.

Certain of our subsidiaries are registered with the SEC under the Investment Advisers Act of 1940, as amended (the Investment Advisers Act), and our mutual funds are registered with the SEC under the Investment Company Act of 1940, as amended (the Investment Company Act). The Investment Advisers Act imposes numerous obligations and fiduciary duties 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 cause the SEC to institute proceedings and impose sanctions for violations of either of these acts, including censure, termination of an investment adviser’s registration, or prohibition to serve as adviser to SEC-registered funds and could lead to litigation by investors in those funds or harm to our reputation, any of which could cause our earnings or stock price to decline.

Failure to maintain our technological advantage could lead to a loss of clients and a decline in our revenues

A key element to our continued success is our ability to maintain our technological advantage both in terms of operational efficiency and in providing the sophisticated risk analytics incorporated into our operating systems that support our investment advisory and BlackRock Solutions clients. Moreover, our technological advantage is dependent on a number of third parties who provide various types of data to us. The failure of these third parties to provide such data could result in operational difficulties and adversely impact our ability to provide services to our BlackRock Solutions clients. There can be no assurance that we will be able to maintain this technological advantage or be able to effectively protect and enforce our intellectual property rights in these systems and processes.

Loss of significant separate accounts would decrease our revenues

We had approximately 480 separate account clients on December 31, 2004, of which the ten largest (excluding alternative investment products and BlackRock Solutions clients) generated approximately 8% of our total revenues as of December 31, 2004. Our clients may terminate investment management contracts or withdraw funds on short notice. A change of control of BlackRock or PNC may also require re-approval by registered investment companies of their investment management contracts with us. Loss of any of these accounts would reduce our revenues. We have, from time to time, lost separate accounts because of corporate mergers and restructurings, and in the future we could lose accounts under these or other circumstances, such as adverse market conditions or poor performance.

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Item 1. BUSINESS (continued)

Risks Related to Our Business (continued)

Concentration of PNC-related assets in total assets under management could result in loss of revenue if the PNC-related assets are withdrawn by PNC or PNC-related accounts

Approximately 9% ($30.2 billion at December 31, 2004) of our assets under management are assets related to PNC. PNC or PNC-related accounts generated $64.5 million, or 9%, of our total revenue for the year ended December 31, 2004. PNC or PNC-related accounts 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 using or making available our products. During the year ended December 31, 2004, we incurred $18.3 million of fund administration and servicing costs paid to PNC (3% of total expense) on PNC-related assets.

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, if targets are based on cumulative returns, we may not earn performance fees in future periods. 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 represented 6% of our total revenue for the year ended December 31, 2004.

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 expand our product offerings to improve our profit margins. These strategies have included smaller-sized lift-outs of investment teams and acquisitions of investment management businesses. 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. In the event we pursue meaningful acquisitions, we may 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 this acquisition.

The expected benefits of our recent acquisition of SSR may not be realized

We acquired SSR from MetLife, Inc. on January 31, 2005. We cannot assure you that SSR will be successfully combined into BlackRock. If we cannot successfully integrate these operations, our business could be materially adversely affected. The acquisition involves combining two companies that have previously operated separately into one unified company. The combination of BlackRock with SSR involves a number of risks, including:

• the diversion of management’s attention to combine operations;

• declines in investment performance due to loss of key personnel or other reasons;

• difficulties in the combination of operations and systems;

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Item 1. BUSINESS (continued)

Risks Related to Our Business (continued)

• difficulties in the assimilation and retention of employees;

• challenges in keeping existing clients and obtaining new clients, including potential conflicts of interest; and

• challenges in attracting and retaining qualified personnel.

Because of difficulties in combining operations, we may not be able to realize the revenue growth and other benefits that we hope to achieve from the acquisition. In addition, we may be required to spend additional time or money on integration that would otherwise be spent on the development and expansion of our business and services.

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

We are dependent on the availability of our personnel, 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, loss of human capital, regulatory actions, breach of client contracts, reputational harm or legal liability, which, in turn, could cause a decline in our stock price.

Failure to implement effective information security policies, procedures and capabilities could disrupt operations and cause financial losses that could result in a decrease in our earnings or stock price

We are dependent on the effectiveness of our information security policies, procedures and capabilities to protect our computer and telecommunications systems, and the data that reside on or are transmitted through them. An externally caused information security incident, such as a hacker attack or a virus or worm, or an internally caused issue, such as failure to control access to sensitive systems, could materially interrupt our business operations or cause disclosure or modification of sensitive or confidential information and could result in material financial loss, regulatory actions, breach of client contracts, reputational harm or legal liability, which, in turn, could cause a decline in our earnings or stock price.

Failure to comply with client contractual requirements and/or guidelines could result in damage awards against us and loss of revenues due to client terminations, both of which could cause our earnings or stock price to decline

When clients retain us to manage assets or provide products or services on their behalf, they specify guidelines or contractual requirements that we are required to observe in the provision of our services. A failure to comply with these guidelines or contractual requirements could result in damage to our reputation or to the client seeking to recover losses from us, reducing its assets under investment or risk management, or terminating its contract with us, any of which could cause our earnings or stock price to decline.

We have become subject to an increased risk of asset volatility from changes in the global financial and equity markets

We have become subject to an increased risk of asset volatility from changes in the domestic and global financial and equity markets due to the continuing threat of terrorism and the recent reports of accounting irregularities at certain public companies. Declines in these markets have caused in the past, and would cause in the future, a decline in our revenue and income.

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Item 1. BUSINESS (continued)

Risks Related to Our Business (continued)

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, or 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 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 that could reduce our earnings or cause our stock price to decline.

Risks Related to Our Affiliation with PNC

Our largest stockholder, PNC, 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 while PNC remains the majority stockholder.

Four of our 13 directors are directors and/or executive officers of PNC and, as of December 31, 2004, PNC indirectly owned approximately 71% of our outstanding common stock, representing approximately 84% of the combined voting power of all of our classes of voting stock. As long as PNC owns a majority of the voting power of our common stock, PNC will be able to 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 amended and restated bylaws provide that, subject to applicable law and rules of the New York Stock Exchange (“NYSE”), prior to the date on which PNC or another person beneficially owns less than a majority of the voting power of our 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 our day-to-day operations, PNC will be in a position to continue to control all matters affecting us, including:

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

• any determination with respect to mergers or other business combinations involving us;

• the acquisition or disposition of assets by us;

• future issuances of our common stock or other securities;

• the incurrence of debt by us;

• 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 that are consolidated or combined with PNC’s tax returns.

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Item 1. BUSINESS (continued)

Risks Related to Our Affiliation with PNC (continued)

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

Effective January 18, 2005, PNC’s ownership in BlackRock was transferred to PNC Bancorp, Inc. The transfer was effected primarily to give BlackRock more operating flexibility, particularly in anticipation of its acquisition of SSR. Because PNC is a bank holding company and we are a subsidiary of PNC, we are subject to general banking regulations that limit our activities and the types of businesses in which we may engage. Banking regulations may cause us to be at a competitive disadvantage because most of our competitors are not subject to these limitations. As a PNC subsidiary, we are subject to the supervision, regulation, and examination of the Board of Governors of the Federal Reserve System (“FRB”). We are also subject to the broad enforcement authority of the FRB, including the FRB’s power to prohibit us from engaging in any activity that, in the FRB’s opinion, constitutes an unsafe or unsound practice in conducting its business. The FRB may also impose substantial fines and other penalties for violations of banking regulations applicable to us.

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

Upon a change of control of PNC or BlackRock, PNC, BlackRock, or any successor to PNC or BlackRock, may be required to offer to purchase all our capital stock held by our employee stockholders and by public stockholders. Upon a change of 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 of control of PNC or BlackRock, the boards of registered investment companies will have to approve our investment management contracts. Moreover, our advisory clients must consent to such change of control or terminate their agreements with us.

The foregoing risks are not exhaustive and new risks may emerge that affect BlackRock’s businesses. It is impossible for management to predict such future risks, and therefore, forward-looking statements should not be relied upon as a prediction of future results.

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, 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 the quality of our client service. We have succeeded in growing aggregate assets under management, and we believe that we will continue to be able to do so by focusing on strong investment performance and client service and by 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 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 December 31, 2004, BlackRock had 1,020 full-time professionals, including 163 professionals in the portfolio management group, 327 professionals in BlackRock Solutions, 228 professionals in the separate account and funds marketing and client service areas and 302 professionals in executive, administrative and support functions.

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Item 1. BUSINESS (continued)

Regulation

Virtually all aspects of BlackRock’s business are subject to various federal and state laws and regulations, some of which are summarized below. 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, National Association (PNC Bank). Under these laws and regulations, agencies that regulate investment advisers and banks and their subsidiaries, such as BlackRock and its subsidiaries, have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity 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.

BlackRock’s subsidiaries are subject to regulation, primarily at the federal level, by the SEC, the Department of Labor, Comptroller of the Currency (OCC), FRB, the Financial Services Authority, the Commodity Futures Trading Commission (CFTC) and other regulatory bodies.

The Investment Advisers Act imposes numerous obligations on registered investment advisers such as BlackRock, 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, such as BlackRock, 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 fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations.

BlackRock’s subsidiaries also 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.

Two of BlackRock’s subsidiaries are registered as commodity pool operators with the CFTC and the National Futures Association (NFA) and one of those subsidiaries is also registered as a commodity trading advisor. The CFTC and NFA each administer a comparable regulatory system covering futures contracts and various other financial instruments in which certain BlackRock clients may invest. Two of BlackRock’s other subsidiaries are registered with the SEC as broker-dealers and are member-firms of the National Association of Securities Dealers, Inc. (NASD). Each broker-dealer’s respective NASD membership agreement limits its permitted activities to the sale of investment company securities and certain private placements of securities, and in the case of BlackRock Investments, Inc., certain investment banking and financial consulting activities. Although both broker-dealers have limited business activities, they are both subject to the customer dealing, reporting and other requirements of the NASD, as well as the net capital and other requirements of the SEC.

BlackRock’s international operations are also subject to the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies. As BlackRock has expanded its international business, various of its subsidiaries and international operations have become subject to regulatory systems comparable to those affecting its operations in the United States. BlackRock’s international subsidiaries are subject to periodic examination by these regulatory agencies and have developed comprehensive compliance systems in order to satisfy applicable regulatory requirements. The failure to comply with the applicable regulatory frameworks could have a material adverse effect on BlackRock.

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Item 1. BUSINESS (continued)

Regulation (continued)

PNC is a bank holding company and, as discussed below, is also a “financial holding company” regulated by the FRB. As a subsidiary of PNC, BlackRock is subject to most banking laws, regulations, and orders that are applicable to PNC, and therefore to the supervision, regulation, and examination of the FRB, as well as the SEC. The FRB also has broad enforcement authority over PNC and its subsidiaries, including the power to prohibit PNC or any subsidiary from engaging in any activity that, in the FRB’s opinion, constitutes an unsafe or unsound practice in conducting its business, and to impose substantial fines and other penalties. Supervision and regulation of PNC and its subsidiaries are intended primarily for the protection of PNC Bank, depositors, the deposit insurance funds of the Federal Deposit Insurance Corporation (FDIC), and the banking system as a whole, not for the protection of stockholders or creditors of national banks or their subsidiaries.

Because BlackRock is a subsidiary of PNC, a regulated financial services firm, PNC’s relationships and good standing with its regulators are important to the conduct of our business. The FRB, SEC, and other domestic and foreign regulators have broad enforcement powers, and powers to approve, deny, or refuse to act upon applications or notices of PNC or its subsidiaries to conduct new activities, acquire or divest businesses or assets or reconfigure existing operations. In addition, PNC and its bank subsidiaries are subject to examination by various regulators, which results in examination reports and ratings (which are not publicly available) that can impact the conduct and growth of our businesses. These examinations consider not only compliance with applicable laws and regulations, but also capital levels, asset quality and risk, management ability and performance, earnings, liabilities, and various other factors. An examination downgrade by any of the federal bank regulators of PNC or its subsidiaries potentially can result in the imposition of limitations on certain of our activities and on our growth.

As a subsidiary of PNC, BlackRock may not conduct new activities, establish a subsidiary, or acquire the stock or assets of another company unless the activity, subsidiary, stock or assets involve a business authorized for a financial holding company. Under the provisions of the Bank Holding Company Act, a nonbank subsidiary of a financial holding company may engage in insurance underwriting, insurance investment and merchant banking activities, as well as permissible financial activities, including investment management. With respect to most non-U.S. activities or investments, BlackRock must provide notice to, and/or obtain the approval of the FRB. The FRB 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. 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 financial holding company.

Pursuant to the Gramm-Leach-Bliley Act (the GLB Act), a qualifying bank holding company may become a financial holding company and engage in a broad range of financial activities. A bank holding company may elect to become a financial holding company if each of its subsidiary banks is “well capitalized,” is “well managed,” and has at least a satisfactory rating under the Community Reinvestment Act. PNC became a financial holding company as of March 13, 2000.

The FRB is the “umbrella” supervisor for financial holding companies. In addition, the financial holding company’s operating entities, such as its subsidiary broker-dealers, investment managers, investment companies, banks and other regulated institutions, are also subject to the jurisdiction of various state and federal “functional” regulators.

Under federal law, PNC Bank and its subsidiaries 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 non-affiliated companies, or, in the absence of comparable transactions, that in good faith would be offered to or would apply to non-affiliated companies.

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Item 1. BUSINESS (continued)

Regulation (continued)

In addition, certain transactions, including loans and other extensions of credit, guarantees, investments, and asset purchases between PNC Bank and its subsidiaries, on the one hand, and PNC and its non-bank subsidiaries, including BlackRock, 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 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. These affiliate transaction restrictions also apply in some cases to loans or other transactions between PNC Bank, on the one hand, and investment funds advised by BlackRock, on the other.

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. 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.

PNC’s bank subsidiaries are subject to “cross-guarantee” provisions under federal law, which provide that 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 shareholders of the banks. At December 31, 2004, both of PNC’s bank subsidiaries exceeded the required ratios for classification as “well capitalized” under statutory and regulatory standards.

BlackRock is subject to the USA PATRIOT Act of 2001, which contains the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. That Act contains anti-money laundering measures affecting insured depository institutions, broker-dealers and certain financial institutions. The Act requires U.S. financial institutions to adopt policies and procedures to combat money laundering and grants the Secretary of the Treasury broad authority to establish regulations and to impose requirements and restrictions on financial institutions’ operations. BlackRock has established policies and procedures designed to ensure compliance with the Act and the related regulations.

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Item 1. BUSINESS (continued)

Regulation (continued)

Additional legislation, changes in rules promulgated by the SEC, other federal and state regulatory authorities and self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of BlackRock. The profitability of BlackRock could also be affected by rules and regulations that impact the business and financial communities in general, including changes to the laws governing taxation, antitrust regulation and electronic commerce. In addition, the SEC and other governmental agencies have recently been investigating the mutual fund industry. The SEC has adopted and proposed various rules, and legislation has been passed in Congress, the effect of which will further regulate the mutual fund industry and impose additional compliance obligations, and costs for fulfilling such obligations, on BlackRock.

The rules governing the regulation of financial institutions and their holding companies and subsidiaries are very detailed and technical. Accordingly, the above discussion is general in nature and does not purport to be complete.

Available Information

BlackRock files annual, quarterly and current reports, proxy statements and all amendments to these reports and other information with the SEC. BlackRock makes available free-of-charge, on or through its website at http://www.blackrock.com, BlackRock’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (and all amendments to those reports) as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC, and also makes available on its website the charters for the Audit, Compensation, and Nominating Committees of the Board of Directors, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Further, BlackRock will provide, without charge upon written request, a copy of BlackRock’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports as well as the committee charters, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Requests for copies should be addressed to Investor Relations, BlackRock, Inc., 40 East 52^nd Street, New York, New York 10022. You may also read and copy any document BlackRock files at the SEC’s Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Reports, proxy statements and other information regarding issuers that file electronically with the SEC, including BlackRock’s filings, are also available to the public from the SEC’s website at http://www.sec.gov.

Item 2. PROPERTIES

BlackRock’s principal office, which is leased, is located at 40 East 52nd Street, New York, New York. BlackRock also leases office space in New York City at 345 Park Avenue and 55 East 52^nd Street, as well as in Boston, Edinburgh, Hong Kong, San Francisco, Morristown, Singapore, Sydney and Tokyo and owns an 84,500 square foot office building in Wilmington.

Item 3. LEGAL PROCEEDINGS

As previously disclosed, BlackRock has received subpoenas from various federal and state governmental and regulatory authorities and various information requests from the SEC in connection with industry-wide investigations of mutual fund matters. BlackRock is continuing to cooperate fully in these matters.

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Item 3. LEGAL PROCEEDINGS (continued)

BlackRock and persons to whom BlackRock may have indemnification obligations, in the normal course of business, are subject to various pending and threatened lawsuits, in which claims for monetary damages are asserted. Management, after consultation with legal counsel, does not currently anticipate that the aggregate liability, if any, arising out of such lawsuits will have a material adverse effect on BlackRock’s financial position, although at the present time, management is not in a position to determine whether any such pending or threatened litigation will have a material adverse effect on BlackRock’s results of operations in any future reporting period.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of BlackRock’s security holders during the fourth quarter of the year ended December 31, 2004.

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Part II

Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

BlackRock’s class A common stock is listed on the NYSE and is traded under the symbol “BLK.” BlackRock’s class B common stock is not included for listing or quotation on any established market. At the close of business on January 31, 2005, there were 391 class A common stockholders of record and 43 class B common stockholders of record.

The following table sets forth for the periods indicated the high and low reported sale prices and dividends paid per share for the class A common stock as reported on the NYSE:

	Stock Price Ranges				Close		Dividends Paid
	High		Low
2004
First Quarter	$	62.34	$	53.03	$	61.17	$	0.25
Second Quarter	$	66.93	$	57.80	$	63.83	$	0.25
Third Quarter	$	76.00	$	60.66	$	73.49	$	0.25
Fourth Quarter	$	78.24	$	68.83	$	77.26	$	0.25
2003
First Quarter	$	45.40	$	39.58	$	43.54		—
Second Quarter	$	48.56	$	43.20	$	45.04		—
Third Quarter	$	52.35	$	43.60	$	49.00	$	0.20
Fourth Quarter	$	53.63	$	48.73	$	53.11	$	0.20

Dividends

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 condition, capital requirements and other circumstances. In addition, because BlackRock is a consolidated subsidiary of PNC, federal restrictions on payments of dividends by PNC may apply to us (see “Business-Regulation” in Item 1 above).

Issuer Purchases of Equity Securities

During the three months ended December 31, 2004, the Company made the following purchases of its equity securities that are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934.

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Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (continued)

Issuer Purchases of Equity Securities (continued)

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs 1
October 1, 2004 through October 31, 2004	110,600		$	70.29	110,600	1,084,625
November 1, 2004 through November 30, 2004	1,800		$	73.00	1,800	1,082,825
December 1, 2004 through December 31, 2004	15,053	2	$	76.93	—	1,082,825
Total	127,453		$	71.11	112,400

¹ On January 21, 2004, the Company announced a two million share repurchase program with no stated expiration date. The Company is currently authorized to repurchase approximately 1.1 million shares under this repurchase program.

² Represents purchases made by the Company to satisfy income tax withholding obligations of certain employees.

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Item 6. SELECTED FINANCIAL DATA

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 filing. The data reflects certain reclassifications to conform with the current year’s presentation.

	Year ended December 31,
(Dollar amounts in thousands, except per share data)	2004			2003			2002			2001			2000
Income statement data
Revenue
Investment advisory and administration fees:
Mutual funds	$	220,949		$	206,136		$	212,214		$	217,361		$	229,259
Separate accounts		412,674			322,556			306,951			278,126			223,521
Total advisory and administration fees		633,623			528,692			519,165			495,487			452,780
Other income		91,688			69,520			57,812			37,657			24,092
Total revenue		725,311			598,212			576,977			533,144			476,872
Expense
Employee compensation and benefits		287,139			228,905			230,634			215,118			189,684
Long-Term Retention and Incentive Plan		103,999			—			—			—			—
Fund administration and servicing costs		32,593			32,773			41,779			60,829			75,686
General and administration		128,738			107,333			88,601			76,567			58,311
Amortization of intangible assets (1)		947			925			824			10,454			10,153
Impairment of intangible assets		6,097			—			—			—			—
Total expense		559,513			369,936			361,838			362,968			333,834
Operating income		165,798			228,276			215,139			170,176			143,038
Non-operating income (expense)
Investment income		35,475			23,346			9,492			11,576			7,734
Interest expense		(835	)		(720	)		(683	)		(761	)		(855	)
		34,640			22,626			8,809			10,815			6,879
Income before income taxes and minority interest		200,438			250,902			223,948			180,991			149,917
Income taxes		52,264			95,247			90,699			73,557			62,556
Income before minority interest		148,174			155,655			133,249			107,434			87,361
Minority interest		5,033			253			—			—			—
Net income	$	143,141		$	155,402		$	133,249		$	107,434		$	87,361
Per share data
Basic earnings	$	2.25		$	2.40		$	2.06		$	1.67		$	1.37
Diluted earnings		2.17			2.36			2.04			1.65			1.35
Book value (2)		12.07			11.13			9.78			7.54			5.75
Market value (2)		77.26			53.11			39.40			41.70			42.00
Cash dividends declared per common share		1.00			0.40			N/A			N/A			N/A

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Item 6. SELECTED FINANCIAL DATA (continued)

	Year ended December 31,
(Dollar amounts in thousands)	2004		2003		2002		2001		2000
Balance sheet data
Cash and cash equivalents	$	457,673	$	315,941	$	255,234	$	186,451	$	192,590
Investments		227,497		234,923		210,559		139,126		13,316
Intangible assets, net		184,110		192,079		182,827		181,688		192,142
Other assets		275,955		224,280		215,568		177,213		138,955
Total assets		1,145,235		967,223		864,188		684,478		537,003
Total liabilities		376,883		253,915		229,534		198,361		168,762
Stockholders’ equity		768,352		713,308		634,654		486,117		368,241
Other financial data (unaudited)
Assets under management (Dollar amounts in millions)
Separate accounts:
Fixed income	$	216,070	$	190,432	$	156,574	$	119,488	$	103,561
Cash Management		7,360		5,855		5,491		6,831		6,495
Securities lending		6,898		9,925		6,433		10,781		11,501
Equity		9,397		9,443		9,736		9,577		8,716
Alternative investment products		8,202		6,934		5,279		5,309		3,470
Subtotal		247,927		222,589		183,513		151,986		133,743
Mutual funds:
Fixed income		24,639		23,924		19,012		15,754		13,317
Cash Management		63,799		58,565		66,588		62,141		43,190
Equity		5,395		4,278		3,728		8,703		13,519
Subtotal		93,833		86,767		89,328		86,598		70,026
Total	$	341,760	$	309,356	$	272,841	$	238,584	$	203,769

⁽¹⁾ Amortization of intangible assets decreased due to the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” in 2003.

⁽²⁾ As of December 31 of the respective year ended.

N/A — Not applicable

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BlackRock, Inc., a Delaware corporation (together, with its subsidiaries, “BlackRock” or the “Company”), is one of the largest publicly traded investment management firms in the United States with approximately $341.8 billion of assets under management at December 31, 2004. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, cash management and alternative investment separate accounts and mutual funds, including BlackRock Funds and BlackRock Liquidity Funds (formerly BlackRock Provident Institutional Funds). In addition, BlackRock provides risk management, investment analytics and enterprise investment system services and products to institutional investors under the BlackRock Solutions name. BlackRock is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc. (PNC), one of the largest diversified financial services organizations in the U.S. providing regional community banking; wholesale banking, including corporate banking; real estate finance and asset-based lending; wealth management; asset management and global fund processing services. As of December 31, 2004, PNC indirectly owned approximately 71% of BlackRock.

The following table summarizes BlackRock’s operating performance for the years ended December 31, 2004, 2003 and 2002:

BlackRock, Inc.

Financial Highlights

(Dollar amounts in thousands, except share data or otherwise stated)

	Year ended December 31,									Variance vs.
										2004 vs. 2003					2003 vs. 2002
	2004			2003			2002			Amount			%		Amount		%
Total revenue	$	725,311		$	598,212		$	576,977		$	127,099		21	%	$	21,235	4	%
Total expense	$	559,513		$	369,936		$	361,838		$	189,577		51	%	$	8,098	2	%
Operating income	$	165,798		$	228,276		$	215,139			($62,478	)	(27	%)	$	13,137	6	%
Net income	$	143,141		$	155,402		$	133,249			($12,261	)	(8	%)	$	22,153	17	%
Diluted earnings per share	$	2.17		$	2.36		$	2.04			($0.19	)	(8	%)	$	0.32	16	%
Diluted earnings per share, as adjusted (a)	$	2.70		$	2.36		$	2.04		$	0.34		14	%	$	0.32	16	%
Average diluted shares outstanding		65,960,473			65,860,368			65,307,548			100,105		0	%		552,820	1	%
Operating margin, GAAP basis		22.9	%		38.2	%		37.3	%
Operating margin, as adjusted (b)		36.9	%		40.9	%		41.8	%
Assets under management (Dollar amounts in millions)	$	341,760		$	309,356		$	272,841		$	32,404		10	%	$	36,515	13	%

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

BlackRock, Inc.

Financial Highlights (continued)

Notes to table

(a) Diluted earnings per share, as adjusted, has been derived from the Company’s consolidated financial statements, as follows:

	Year ended December 31,
	2004			2003		2002
Net income, GAAP basis	$	143,141		$	155,402	$	133,249
Non GAAP adjustments, net of tax:
PNC’s LTIP funding requirement		53,673			—		—
Professional fees associated with SSR acquisition		635			—		—
Sale of equity interest in Trepp LLC		(1,572	)		—		—
Release of reserves related to New York State and New York City tax audits		(18,064	)		—		—
Net income, as adjusted		177,813			155,402		133,249
Diluted weighted average shares outstanding		65,960,473			65,860,368		65,307,548
Diluted earnings per share, GAAP basis	$	2.17		$	2.36	$	2.04
Diluted earnings per share, as adjusted	$	2.70		$	2.36	$	2.04

Management believes that earnings per diluted share, as adjusted, is an effective indicator of the Company’s profitability and financial performance over time. The LTIP expense associated with awards to be met by PNC’s funding requirement has been excluded from earnings per diluted share, as adjusted, because, exclusive of the impact related to LTIP participants’ put options, these non-cash charges will not impact BlackRock’s book value. The remaining items, which have been deemed non-recurring by management, have been excluded from earnings per diluted share, as adjusted, to help ensure the comparability of this information to prior reporting periods.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

BlackRock, Inc.

Financial Highlights (continued)

Notes to table (continued)

(b) Operating income, adjusted for LTIP expense and appreciation (depreciation) on Rabbi Trust assets, divided by total revenue less fund administration and servicing costs. Computations for all periods presented include affiliated and non-affiliated fund administration and servicing expense reported as a separate income statement line item and are derived from the Company’s consolidated financial statements, as follows:

	Year ended
	2004			2003			2002
Operating income, GAAP basis	$	165,798		$	228,276		$	215,139
Add back: LTIP expense		103,999			—			—
Less: BlackRock’s LTIP funding requirement		(18,892	)		—			—
Add back: Appreciation (depreciation) on Rabbi trust assets		4,479			3,141			(1,410	)
Operating income, as adjusted		255,384			231,417			213,729
Revenue, GAAP basis		725,311			598,212			576,977
Less: fund administration and servicing costs		(32,593	)		(32,773	)		(41,779	)
Revenue used for operating margin measurement		692,718			565,439			535,198
Operating margin, GAAP basis		22.9	%		38.2	%		37.3	%
Operating margin, as reported		36.9	%		40.9	%		39.9	%

We believe that operating margin, as reported, is an effective indicator of management’s ability to effectively employ the Company’s resources. Appreciation on Rabbi trust assets related to the Company’s deferred compensation plans has been excluded because investment performance of these assets has a nominal impact on net income. Fund administration and servicing costs have been excluded from operating margin because these costs fluctuate based on the discretion of a third party.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

General

BlackRock derives a substantial portion of its revenue 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. Market appreciation or depreciation includes current income earned on and changes in the fair value of securities held in client accounts.

Investment advisory agreements for certain separate accounts and BlackRock’s alternative investment products provide for performance fees in addition to fees based on assets under management. Performance fees generally are earned when investment performance exceeds a contractual threshold and, accordingly, may increase the volatility of BlackRock’s revenue and earnings.

BlackRock provides a variety of risk management, investment analytics and investment system services to insurance companies, finance companies, pension funds, asset managers, foundations, consultants, mutual fund sponsors, REITs, commercial and mortgage banks, savings institutions and government agencies. These services are provided under the brand name BlackRock Solutions and include a wide array of risk management services and enterprise investment system outsourcing to clients. Fees earned for BlackRock Solutions services are based on a number of factors including predetermined percentages of the market value of assets subject to the services and the number of individual investment accounts, or on fixed monthly or quarterly payments. The fees earned on risk management, investment and investment system assignments are recorded as other income.

Operating expense consists of employee compensation and benefits, Long-Term Retention and Incentive Plan expense, fund administration and servicing costs, general and administration expense, amortization of intangible assets and impairment of intangible assets. Employee compensation and benefits expense reflects salaries, deferred and incentive compensation and related benefit costs. Long-Term Retention and Incentive Plan expense reflects expenses recognized for awards granted to employees under the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan (“LTIP”), for which the Company’s management has determined that full vesting is probable, and related payroll taxes. Fund administration and servicing costs reflect payments made to PNC affiliated entities and third parties, primarily associated with the administration and servicing of client investments in the BlackRock Funds and BlackRock Closed-end Funds. Intangible assets at December 31, 2004 and 2003 were approximately $184.1 million and approximately $192.1 million, respectively, with amortization expense of approximately $0.9 million, $0.9 million and $0.8 million for the years ended December 31, 2004, 2003 and 2002, respectively. The impairment of intangible assets recognized during the year ended December 31, 2004 represents a write-off of an acquired management contract due to the resignation of the respective funds’ portfolio manager and the Company’s liquidation of the funds. Intangible assets primarily reflect PNC’s acquisition of BlackRock Financial Management, L.P. (BFM) on February 28, 1995 and a management contract acquired in connection with the agreement and plan of merger of CORE Cap, Inc. with Anthracite Capital, Inc. (Anthracite), a BlackRock managed REIT, on May 15, 2000.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Assets Under Management

Assets under management (“AUM”) increased approximately $32.4 billion, or 10%, to $341.8 billion at December 31, 2004, compared with $309.4 billion at December 31, 2003. The growth in AUM was attributable to an increase of $25.3 billion, or 11%, in separate accounts and an increase of $7.1 billion, or 8%, in mutual fund assets.

The increase in separate accounts at December 31, 2004, as compared with December 31, 2003, was the result of net subscriptions of $12.9 billion and market appreciation of $12.4 billion. Net subscriptions were primarily attributable to fixed income sales, increased cash management assets and new alternative investment product issuance, which totaled $14.8 billion, $1.5 billion and $1.3 billion, respectively. Separate account fundings were partially offset by net redemptions in cash management-securities lending and equity separate accounts of $3.1 billion and $1.6 billion, respectively. The rise in fixed income separate account assets was attributable to new client sales and increased fundings from existing clients. The increase in cash management assets represents enhanced institutional marketing efforts and strong investment performance. Net subscriptions in alternative investment products relate primarily to the launch of a fixed income absolute return product during June 2004, which resulted in net new business of $1.1 billion during the year ended December 31, 2004. Net redemptions of equity accounts primarily reflected outflows in the Company’s international equity products during the period as a result of weak relative investment performance in 2003, which substantially stabilized in the second half of 2004. Market appreciation of $12.4 billion in separate accounts largely reflected appreciation earned on fixed income assets of $10.8 billion due to current income and market interest rate movements and market appreciation in equity assets of $1.6 billion as equity markets improved during the period.

The $7.1 billion increase in mutual fund assets since December 31, 2003 primarily reflected net subscriptions of $6.7 billion. During the year, net subscriptions in the BlackRock Liquidity Funds, BlackRock Closed-end Funds and other commingled funds totaled $5.6 billion, $1.5 billion and $1.3 billion, respectively, which were partially offset by net redemptions in the BlackRock Funds of $2.0 billion. Net new business in the BlackRock Liquidity Funds is primarily due to $11.4 billion of net subscriptions during the fourth quarter of 2004 primarily driven by strong relative investment performance, partially offset by outflows attributable to increases in the Federal Funds rate which results in a temporary yield advantage for direct investments in the money markets versus mutual funds. The increase in AUM of the BlackRock Closed-End Funds reflects new funds launched during 2004, partially offset by a term trust maturity of $0.4 billion. Net subscriptions in other commingled funds resulted from the successful launch of BlackRock Cash Strategies, LLC, an enhanced-yield cash management product, during 2004. The decline in BlackRock Funds AUM was attributable to a decision by PNC’s wealth management business to transfer approximately $2 billion of assets to the BlackRock Liquidity Funds.

AUM in the fourth quarter of 2004 increased $18.3 billion, or 6%, as compared to the third quarter of 2004, representing $12.7 billion in net subscriptions and $5.6 billion in market appreciation. The $12.7 billion in net subscriptions during the period primarily reflected $11.3 billion in BlackRock Liquidity Funds net subscriptions, $1.1 billion in AUM raised through BlackRock Cash Strategies, LLC, fixed income separate account net subscriptions of $1.1 billion and a $0.7 billion increase in alternative investment product AUM primarily associated with the launches of a new collateralized debt obligation and a real estate mezzanine debt fund during the quarter. Asset inflows during the period were partially offset by $1.7 billion of net redemptions in cash management-securities lending separate accounts. Market appreciation of $5.2 billion in separate accounts largely reflected appreciation earned on fixed income assets of $3.9 billion due to current income and market interest rate movements and market appreciation in equity assets of $1.2 billion as equity markets improved during the period.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Assets Under Management (continued)

BlackRock, Inc.

Assets Under Management

	Year ended December 31,						Variance vs.
(Dollar amounts in millions)	2004		2003		2002		2004 vs. 2003		2003 vs. 2002
All Accounts
Fixed income	$	240,709	$	214,356	$	175,586	12.3	%	22.1	%
Cash management		78,057		74,345		78,512	5.0		(5.3	)
Equity		14,792		13,721		13,464	7.8		1.9
Alternative investment products		8,202		6,934		5,279	18.3		31.4
Total	$	341,760	$	309,356	$	272,841	10.5	%	13.4	%
Separate Accounts
Fixed income	$	216,070	$	190,432	$	156,574	13.5	%	21.6	%
Cash management		7,360		5,855		5,491	25.7		6.6
Cash management-Securities lending		6,898		9,925		6,433	(30.5	)	54.3
Equity		9,397		9,443		9,736	(0.5	)	(3.0	)
Alternative investment products		8,202		6,934		5,279	18.3		31.4
Subtotal		247,927		222,589		183,513	11.4		21.3
Mutual Funds
Fixed income		24,639		23,924		19,012	3.0		25.8
Cash management		63,799		58,565		66,588	8.9		(12.0	)
Equity		5,395		4,278		3,728	26.1		14.8
Subtotal		93,833		86,767		89,328	8.1		(2.9	)
Total	$	341,760	$	309,356	$	272,841	10.5	%	13.4	%

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Assets Under Management (continued)

The following tables present the component changes in BlackRock’s assets under management for the years ended December 31, 2004, 2003 and 2002. The data reflects certain reclassifications to conform with the current year’s presentation.

For the years ended December 31, 2004, 2003 and 2002, net subscriptions were $19.6 billion, $22.5 billion and $25.4 billion, respectively, and accounted for 61%, 62% and 74%, respectively, of the total increase in assets under management.

BlackRock, Inc.

Component Changes in Assets Under Management

	Year ended December 31,
(Dollar amounts in millions)	2004			2003			2002
All Accounts
Beginning assets under management	$	309,356		$	272,841		$	238,584
Net subscriptions		19,624			22,468			25,378
Market appreciation		12,780			14,047			8,879
Ending assets under management	$	341,760		$	309,356		$	272,841
% of Change in AUM from net subscriptions		60.6	%		61.5	%		74.1	%
Separate Accounts
Beginning assets under management	$	222,589		$	183,513		$	151,986
Net subscriptions		12,918			26,540			21,322
Market appreciation		12,420			12,536			10,205
Ending assets under management		247,927			222,589			183,513
Mutual Funds
Beginning assets under management		86,767			89,328			86,598
Net subscriptions (redemptions)		6,706			(4,072	)		4,056
Market appreciation (depreciation)		360			1,511			(1,326	)
Ending assets under management		93,833			86,767			89,328
Total	$	341,760		$	309,356		$	272,841

- 33 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Assets Under Management (continued)

BlackRock, Inc.

Component Changes in Assets Under Management

	Year ended December 31,
(Dollar amounts in millions)	2004			2003			2002
Separate Accounts
Fixed Income
Beginning assets under management	$	190,432		$	156,574		$	119,488
Net subscriptions		14,828			24,113			24,443
Market appreciation		10,810			9,745			12,643
Ending assets under management		216,070			190,432			156,574
Cash Management
Beginning assets under management		5,855			5,491			6,831
Net subscriptions (redemptions)		1,462			327			(1,365	)
Market appreciation		43			37			25
Ending assets under management		7,360			5,855			5,491
Cash Management-Securities lending
Beginning assets under management		9,925			6,433			10,781
Net subscriptions (redemptions)		(3,027	)		3,492			(4,348	)
Ending assets under management		6,898			9,925			6,433
Equity
Beginning assets under management		9,443			9,736			9,577
Net subscriptions (redemptions)		(1,596	)		(2,920	)		2,269
Market appreciation (depreciation)		1,550			2,627			(2,110	)
Ending assets under management		9,397			9,443			9,736
Alternative investment products
Beginning assets under management		6,934			5,279			5,309
Net subscriptions		1,251			1,528			323
Market appreciation (depreciation)		17			127			(353	)
Ending assets under management		8,202			6,934			5,279
Total Separate Accounts
Beginning assets under management		222,589			183,513			151,986
Net subscriptions		12,918			26,540			21,322
Market appreciation		12,420			12,536			10,205
Ending assets under management	$	247,927		$	222,589		$	183,513

- 34 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Assets Under Management (continued)

BlackRock, Inc.

Component Changes in Assets Under Management

	Year ended December 31,
	2004			2003			2002
(Dollar amounts in millions)
Mutual Funds
Fixed Income
Beginning assets under management	$	23,924		$	19,012		$	15,754
Net subscriptions		801			4,295			2,836
Market appreciation (depreciation)		(86	)		617			422
Ending assets under management		24,639			23,924			19,012
Cash Management
Beginning assets under management		58,565			66,588			62,141
Net subscriptions (redemptions)		5,241			(8,035	)		4,443
Market appreciation (depreciation)		(7	)		12			4
Ending assets under management		63,799			58,565			66,588
Equity
Beginning assets under management		4,278			3,728			8,703
Net subscriptions (redemptions)		664			(332	)		(3,223	)
Market appreciation (depreciation)		453			882			(1,752	)
Ending assets under management		5,395			4,278			3,728
Total Mutual Funds
Beginning assets under management		86,767			89,328			86,598
Net subscriptions (redemptions)		6,706			(4,072	)		4,056
Market appreciation (depreciation)		360			1,511			(1,326	)
Ending assets under management	$	93,833		$	86,767		$	89,328

- 35 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Assets Under Management (continued)

BlackRock, Inc.

Component Changes in Assets Under Management

	Year ended December 31,
	2004			2003			2002
(Dollar amounts in millions)
Mutual Funds
BlackRock Funds
Beginning assets under management	$	18,354		$	18,115		$	24,195
Net redemptions		(2,014	)		(523	)		(4,533	)
Market appreciation (depreciation)		365			762			(1,547	)
Ending assets under management		16,705			18,354			18,115
BlackRock Global Series
Beginning assets under management		838			211			149
Net subscriptions		318			521			48
Market appreciation		67			106			14
Ending assets under management		1,223			838			211
BlackRock Liquidity Funds
Beginning assets under management		52,870			59,576			53,167
Net subscriptions (redemptions)		5,591			(6,706	)		6,409
Market depreciation		(8	)		—			—
Ending assets under management		58,453			52,870			59,576
Closed End
Beginning assets under management		13,961			10,771			8,512
Net subscriptions		1,513			2,547			2,052
Market appreciation (depreciation)		(64	)		643			207
Ending assets under management		15,410			13,961			10,771
Other Commingled Funds
Beginning assets under management		744			655			575
Net subscriptions		1,298			89			80
Ending assets under management		2,042			744			655
Total Mutual Funds
Beginning assets under management		86,767			89,328			86,598
Net subscriptions (redemptions)		6,706			(4,072	)		4,056
Market appreciation (depreciation)		360			1,511			(1,326	)
Ending assets under management	$	93,833		$	86,767		$	89,328

- 36 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2004 as compared with the year ended December 31, 2003.

Revenue

Total revenue for the year ended December 31, 2004 increased $127.1 million, or 21%, to $725.3 million compared to $598.2 million during the year ended December 31, 2003. Investment advisory and administration fees increased $104.9 million, or 20%. The increase in investment advisory and administration fees resulted from increases in separate account revenue of $90.1 million, or 28%, and mutual fund revenue of $14.8 million, or 7%. Other income increased $22.2 million, or 32%, primarily due to strong sales of BlackRock Solutions products and services and fees earned by the Company’s Advisory Services Group.

	Year ended December 31,				Variance
	2004		2003		Amount		%
(Dollar amounts in thousands)
Investment advisory and administration fees:
Mutual funds	$	220,949	$	206,136	$	14,813	7.2	%
Separate accounts		412,674		322,556		90,118	27.9
Total investment advisory and administration fees		633,623		528,692		104,931	19.8
Other income		91,688		69,520		22,168	31.9
Total revenue	$	725,311	$	598,212	$	127,099	21.2	%

Separate account advisory fees for the year ended December 31, 2004 increased $90.1 million, or 28%, to $412.7 million compared to $322.6 million earned during the year ended December 31, 2003. The growth in separate account advisory fees, excluding performance fees, was primarily attributable to a $25.3 billion, or 11%, increase in AUM. Separate account performance fees for the year ended December 31, 2004 increased $32.7 million to $41.6 million compared with $8.9 million during the year ended December 31, 2003 primarily due to performance fees earned on the Company’s fixed income hedge fund and real estate products.

During the year ended December 31, 2004, mutual funds revenue of $220.9 million increased $14.8 million, or 7%, compared to $206.1 million for the year ended December 31, 2003. The increase in mutual funds revenue was due to an $18.8 million, or 36%, increase in closed-end fund revenue partially offset by a decrease in fees earned from the BlackRock Liquidity Funds of $4.8 million, or 6%. Closed-end fund revenue increased during the period due to several closed-end fund launches during the year, resulting in a $1.5 billion increase in AUM. The decrease in BlackRock Liquidity Funds fees during 2004 was primarily attributable to a decrease in average assets under management of approximately $2.7 billion, reflecting multiple increases in the Federal Funds rate in 2004 which resulted in periods when yields on direct investments exceeded mutual fund returns. The Company expects AUM levels to remain volatile in this asset class as the Federal Reserve Bank continues to raise interest rates.

- 37 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2004 as compared with the year ended December 31, 2003 (continued)

Revenue (continued)

Other income for the year ended December 31, 2004 increased $22.2 million, or 32%, primarily due to a $21.8 million, or 37%, increase in fees earned from BlackRock Solutions which totaled $80.5 million for the year ended December 31, 2004 compared to $58.7 million earned in 2003 and $3.2 million earned during 2004 by the Company’s newly-formed Advisory Services Group. The increase in BlackRock Solutions revenue during 2004 is primarily attributable to an increase in fees earned from Aladdin implementation and ongoing service bureau engagements of $19.4 million, or 52%, and mortgage portfolio advisory services of $2.7 million, or 43%. Increases in other income during 2004 were partially offset by a $2.6 million decrease in other income resulting from the Company’s consolidation of its investment in a strategic joint venture during 2004. Investment advisory fees earned from this venture’s clients, previously reported in other income, are now reflected in investment advisory and administration fees.

	Year ended December 31,				Variance
	2004		2003		Amount			%
(Dollar amounts in thousands)
Mutual funds revenue
BlackRock Funds	$	70,066	$	69,361	$	705		1.0	%
Closed-end Funds		71,443		52,685		18,758		35.6
BlackRock Liquidity Funds		78,265		83,035		(4,770	)	(5.7	)
Other Commingled Funds		1,175		1,055		120		11.4
Total mutual funds revenue		220,949		206,136		14,813		7.2
Separate accounts revenue
Separate accounts base fees		371,068		313,681		57,387		18.3
Separate accounts performance fees		41,606		8,875		32,731		NM
Total separate accounts revenue		412,674		322,556		90,118		27.9
Total investment advisory and administration fees		633,623		528,692		104,931		19.8
Other income		91,688		69,520		22,168		31.9
Total revenue	$	725,311	$	598,212	$	127,099		21.2	%

NM – Not meaningful

- 38 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2004 as compared with the year ended December 31, 2003. (continued)

Expense

Total expense for the year ended December 31, 2004 increased $189.6 million to $559.5 million compared to $369.9 million for the year ended December 31, 2003. The increase was primarily attributable to $104.0 million in LTIP-related charges recognized during 2004 as well as an increase of $58.2 million, or 25%, in employee compensation and benefits, an increase of $21.4 million, or 20%, in general and administration expense and the recognition of a $6.1 million impairment of an acquired management contract. Exclusive of LTIP-related charges and the impairment charge, total expense for 2004 would have increased $79.5 million, or 21%, from 2003.

	Year ended December 31,				Variance
(Dollar amounts in thousands)	2004		2003		Amount			%
Employee compensation and benefits	$	287,139	$	228,905	$	58,234		25.4	%
Long-Term Retention and Incentive Plan		103,999		—		103,999		NM
Fund administration and servicing costs
Affiliates		18,342		26,949		(8,607	)	(31.9	)
Other		14,251		5,824		8,427		144.7
General and administration		128,738		107,333		21,405		19.9
Amortization of intangible assets		947		925		22		2.4
Impairment of intangible assets		6,097		—		6,097		NM
Total expense	$	559,513	$	369,936	$	189,577		51.2	%

NM – Not Meaningful

The rise in employee compensation expense reflects increased incentive compensation of $30.8 million, primarily attributable to alternative investment product incentives and operating income growth, and a $26.2 million rise in salaries and benefits largely due to higher staffing levels to support Company growth, particularly in BlackRock Solutions. General and administration expense rose during the period due to a $9.6 million, or 34%, increase in marketing and promotional expense largely related to new closed-end fund issuance and increased marketing of other products, higher professional fees of $5.2 million for legal and accounting services related to mutual fund regulatory inquiries, Sarbanes-Oxley Act compliance activities and the acquisition of SSR, a $3.1 million increase in sub advisory fees due to performance fees earned on a collateralized debt obligation and a $1.4 million increase in occupancy costs. In February 2004, the portfolio manager of certain BlackRock long-short equity hedge funds resigned from the firm. As a result, BlackRock commenced a liquidation of these hedge funds and recognized a $6.1 million impairment charge representing the carrying value of the funds’ acquired management contract. After adjusting for the benefit of a $2.7 million performance fee, the funds’ liquidation resulted in an after-tax loss of approximately $2.0 million.

- 39 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2004 as compared with the year ended December 31, 2003. (continued)

Expense (continued)

	Year ended December 31,				Variance
(Dollar amounts in thousands)	2004		2003		Amount		%
General and administration expense:
Marketing and promotional	$	37,602	$	28,052	$	9,550	34.0	%
Occupancy		23,407		22,033		1,374	6.2
Technology		18,835		18,544		291	1.6
Other general and administration		48,894		38,704		10,190	26.3
Total general and administration expense	$	128,738	$	107,333	$	21,405	19.9	%

- 40 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2004 as compared with the year ended December 31, 2003. (continued)

Operating Income and Net Income

Operating income was $165.8 million for the year ended December 31, 2004 and includes a $104.0 million expense associated with awards granted under the LTIP. Exclusive of the LTIP expense, operating income for the year ended December 31, 2004 increased $41.5 million, or 18%, compared with $228.3 million for the year ended December 31, 2003. Non-operating income increased $12.0 million, or 53%, to $34.6 million for the year ended December 31, 2004 as compared with the year ended December 31, 2003. The increase was primarily due to the recognition of a $12.9 million gain on the Company’s sale of its interest in Trepp LLC, partially offset by decreased securities gains and reduced investment income. Income tax expense was $52.3 million and $95.2 million, representing effective tax rates of 26.1% and 38.0% for the years ended December 31, 2004 and 2003, respectively. The decline in the Company’s effective tax rate was primarily attributable to net income benefits of approximately $18.1 million, associated with the resolution of an audit performed by New York State on the Company’s state income tax returns filed from 1998 through 2001 and the release of reserves allocated to the Company’s New York City tax liability due to the receipt of a favorable preliminary audit finding for the 1998-2000 tax years. Net income totaled $143.1 million for the year ended December 31, 2004 and includes the LTIP’s after tax impact of LTIP awards to be funded by a capital contribution of stock by PNC totaling $53.7 million on year-to-date earnings and a $1.6 million increase related to the Company’s sale of its interest in Trepp LLC, partially offset by $18.1 million in previously-discussed income tax benefits and the $0.6 million after tax impact of professional fees associated with the SSR acquisition recorded during year. Exclusive of these items, net income increased $22.3 million, or 14%, compared with $155.4 million for the year ended December 31, 2003.

- 41 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2003 as compared with the year ended December 31, 2002.

Revenue

Total revenue for the year ended December 31, 2003 increased $21.2 million, or 4%, to $598.2 million, compared with $577.0 million for the year ended December 31, 2002. Investment advisory and administration fees increased $9.5 million, or 2%, to $528.7 million for the year ended December 31, 2003, compared with $519.2 million for the year ended December 31, 2002. The growth in investment advisory and administration fees was primarily due to a 21% increase in separate account assets under management to $222.6 billion at December 31, 2003, partially offset by a decrease in separate accounts performance fees and a decrease in mutual fund assets under management of 3%. Other income of $69.5 million increased $11.7 million, or 20%, for the year ended December 31, 2003, compared with $57.8 million for the year ended December 31, 2002. The increase was primarily the result of increased sales in BlackRock Solutions products and services.

	Year ended December 31,				Variance
(Dollar amounts in thousands)	2003		2002		Amount			%
Investment advisory and administration fees:
Mutual funds	$	206,136	$	212,214		($6,078	)	(2.9	%)
Separate accounts		322,556		306,951		15,605		5.1
Total investment advisory and administration fees		528,692		519,165		9,527		1.8
Other income		69,520		57,812		11,708		20.3
Total revenue	$	598,212	$	576,977	$	21,235		3.7	%

Mutual fund advisory and administration fees decreased $6.1 million, or 3%, to $206.1 million for the year ended December 31, 2003, compared with $212.2 million for the year ended December 31, 2002. The decrease in mutual fund revenue was primarily due to declines in BlackRock Fund and BlackRock Liquidity Fund fees of $14.3 million and $3.1 million respectively, partially offset by an increase in closed-end fund fees of $11.1 million. The decrease in BlackRock Fund revenue includes an $18.4 million reduction due to redemptions of PNC-related assets of approximately $2.0 billion (average PNC-related assets in the BlackRock Funds declined approximately $3.4 billion year-over-year), which more than offset an increase in revenues attributable to $1.4 billion in third party net sales. The decrease in BlackRock Liquidity Fund revenue reflected a $1.3 billion decrease in average assets for the year ended December 31, 2003, compared with the year ended December 31, 2002, and $1.8 million related to a rebate of Securities and Exchange Commission registration fees. Closed-end fund revenue increased $11.1 million during 2003 due to an increase in assets of $3.2 billion primarily due to BlackRock’s new fund offerings, which generated $2.5 billion in AUM during 2003.

- 42 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2003 as compared with the year ended December 31, 2002. (continued)

Revenue (continued)

Separate account advisory fees increased $15.6 million, or 5%, to $322.6 million for the year ended December 31, 2003, compared with $307.0 million for the year ended December 31, 2002. Excluding performance fees, advisory fees on separate accounts increased $47.4 million, or 18%, to $313.7 million for the year ended December 31, 2003, compared with $266.3 million for the year ended December 31, 2002. The growth in separate account revenue, excluding performance fees, was attributable to solid relative investment returns and improving equity markets resulting in a $39.1 billion, or 21%, increase in separate account assets. Performance fees of $8.9 million for the year ended December 31, 2003 decreased $31.8 million, or 78%, compared with $40.7 million for the year ended December 31, 2002 primarily due to a decrease in performance fees earned on the Company’s fixed income hedge fund due to a previously established high water mark.

Other income for the year ended December 31, 2003 increased $11.7 million, or 20%, primarily due to an $8.9 million, or 18%, increase in fees earned from BlackRock Solutions of $58.7 million during the year ended December 31, 2003 compared to $49.9 million earned during the year ended December 31, 2002, a $1.1 million, or 33%, increase in fees earned from investment accounting assignments and increased earnings of $1.0 million from Trepp LLC. The increase in BlackRock Solutions revenue during 2004 is primarily attributable to an increase in fees earned from Aladdin implementation and ongoing service bureau engagements of $12.6 million, or 51%, partially offset by a decrease in mortgage portfolio advisory fees of $4.3 million, or 40%, due to the termination of a consulting assignment in late 2002 subsequent to the client being acquired.

- 43 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2003 as compared with the year ended December 31, 2002. (continued)

Revenue (continued)

	Year ended December 31,				Variance
(Dollar amounts in thousands)	2003		2002		Amount			%
Mutual funds revenue
BlackRock Funds	$	69,361	$	83,647		($14,286	)	(17.1	%)
Closed-end Funds		52,685		41,591		11,094		26.7
BlackRock Liquidity Funds		83,035		86,115		(3,080	)	(3.6	)
Other commingled funds		1,055		861		194		22.5
Total mutual funds revenue		206,136		212,214		(6,078	)	(2.9	)
Separate accounts revenue
Separate accounts base fees		313,681		266,252		47,429		17.8
Separate accounts performance fees		8,875		40,699		(31,824	)	(78.2	)
Total separate accounts revenue		322,556		306,951		15,605		5.1
Total investment advisory and administration fees		528,692		519,165		9,527		1.8
Other income		69,520		57,812		11,708		20.3
Total revenue	$	598,212	$	576,977	$	21,235		3.7	%

- 44 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2003 as compared with the year ended December 31, 2002. (continued)

Expense

Total expense increased $8.1 million to $369.9 million for the year ended December 31, 2003, compared with $361.8 million for the year ended December 31, 2002. The change primarily reflects increases in general and administration expense and fund administration and servicing costs paid to third parties of $18.7 million and $4.3 million, respectively, partially offset by decreases in affiliated fund administration and servicing costs and employee compensation and benefits of $13.4 million and $6.4 million, excluding the impact of increased appreciation of Rabbi trust assets of $4.6 million, respectively.

	Year ended December 31,				Variance
(Dollar amounts in thousands)	2003		2002		Amount			%
Employee compensation and benefits	$	228,905	$	230,634		($1,729	)	(0.7	%)
Fund administration and servicing costs
Affiliates		26,949		40,304		(13,355	)	(33.1	)
Other		5,824		1,475		4,349		294.8
General and administration		107,333		88,601		18,732		21.1
Amortization of intangible assets		925		824		101		12.3
Total expense	$	369,936	$	361,838	$	8,098		2.2	%

The increase in general and administrative expense primarily reflects increased marketing and promotional expense of $5.7 million associated with new closed-end fund launches and general business growth, $4.8 million in professional services and other costs incurred or reserved in connection with governmental investigations of the mutual fund industry and the implementation of Financial Accounting Standards Board (“FASB”) Interpretation No. 46R, “Consolidation of Variable Interest Entities” (revised December 2003) (“FIN 46R”), $2.8 million in increased occupancy costs related to the completion of BlackRock’s new headquarters facility in mid-2002, $1.8 million in foreign currency expense due to the decline of the U.S. dollar, $1.5 million in market data services and $1.3 million in insurance premiums. The rise in fund administration and servicing costs paid to third parties is primarily attributable to servicing costs related to new closed-end fund launches. The decline in affiliated fund administration and servicing costs was attributable to $13.4 million in decreased expense related to redemptions of PNC-related assets in 2003. Employee compensation and benefits expense, excluding the impact of increased appreciation of Rabbi trust assets, decreased $6.4 million, or 3%, and primarily consisted of a $19.0 million decrease in direct incentive compensation related to decreased performance fees earned on the Company’s fixed income hedge fund, and a $2.2 million reversal of deferred compensation expense that more than offset increases in salaries and benefits of $6.8 million to support business growth and increased general bonus accruals of $5.8 million primarily due to operating income growth. During the year ended December 31, 2003, employee compensation and benefits increased $4.6 million compared to the year ended December 31, 2002 due to increased appreciation of Rabbi trust assets related to BlackRock deferred compensation plans.

- 45 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Operating results for the year ended December 31, 2003 as compared with the year ended December 31, 2002. (continued)

Expense (continued)

	Year ended December 31,				Variance
(Dollar amounts in thousands)	2003		2002		Amount		%
General and administration expense:
Marketing and promotional	$	28,052	$	22,379	$	5,673	25.3	%
Occupancy		22,033		19,263		2,770	14.4
Technology		18,544		17,822		722	4.1
Other general and administration		38,704		29,137		9,567	32.8
Total general and administration expense	$	107,333	$	88,601	$	18,732	21.1	%

Operating Income and Net Income

Operating income was $228.3 million for the year ended December 31, 2003, representing a $13.1 million, or 6%, increase compared with the year ended December 31, 2002. During the year ended December 31, 2003, operating margin increased to 40.9% as compared to 39.9% during the year ended December 31, 2002. The increase in operating margin was due to scale benefits associated with higher fixed income, cash management and BlackRock Solutions revenue and a reduction in the Company’s bonus accrual rate in 2003. Non-operating income increased $13.8 million, or 157%, to $22.6 million during the year ended December 31, 2003 compared to $8.8 million during the year ended December 31, 2002. The increase in non-operating income was primarily due to appreciation on Rabbi trust assets related to the Company’s deferred compensation plans of $4.7 million, increased interest and dividend income on the Company’s corporate cash and investments of $4.1 million, the recognition of impairment losses totaling approximately $4.0 million on the Company’s CDO and mutual fund investments during 2002 and $1.0 million in security gains. Income tax expense was $95.2 million and $90.7 million, representing effective tax rates of 38% and 40.5% for the years ended December 31, 2003 and December 31, 2002, respectively. The decrease in the Company’s effective tax rate was due to a previously disclosed decision that the Company will file certain combined and unitary state income tax returns with PNC Bank N.A. (PNC Bank) and/or one or more PNC Bank subsidiaries. Net income totaled $155.4 million for the year ended December 31, 2003, compared with $133.2 million for the year ended December 31, 2002, representing an increase of $22.2 million, or 17%.

- 46 -

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Liquidity and Capital Resources

BlackRock meets its working capital requirements through cash generated by its operating activities. Cash provided by the Company’s operating activities totaled $231.4 million, $179.6 million and $170.2 million for the years ended December 31, 2004, 2003 and 2002, respectively. BlackRock expects that cash flows provided by operating activities will continue to serve as the principal source of working capital for the near future.

Net cash flow provided by investing activities was $7.0 million during the year ended December 31, 2004, compared to net cash used of $19.6 million and $94.9 million by investing activities for the years ended December 31, 2003 and 2002, respectively. During the year ended December 31, 2004, net cash flow provided by investing activities primarily consisted of $26.3 million in net investment sales and a $6.4 million increase in the Company’s cash and cash equivalents due to its consolidation of a joint venture under FIN 46R, partially offset by $25.6 million in capital expenditures largely related to investments in technology. During the year ended December 31, 2004, the Company sold several municipal bonds, its investment in the BlackRock Funds GNMA Portfolio and seed investments in several closed-end funds for approximately $161.8 million and sold its equity interest in Trepp LLC for approximately $11.5 million, which was partially offset by $146.4 million in seed investments of new product offerings, five of which represent consolidated investments to the Company.

In January 2005, the Company closed its previously announced acquisition of SSRM Holdings, Inc. (SSR), the holding company of State Street Research & Management Company and SSR Realty Advisors, Inc., from MetLife, Inc. for an adjusted purchase price of $284.6 million in cash and 550,000 shares of BlackRock restricted class A common stock. Additional cash consideration, which could increase the purchase price by up to 25%, may be paid over 5 years contingent on certain measures. The Company financed $150 million of the purchase price with a bridge promissory note from Morgan Stanley Senior Funding, Inc. at an annual rate of 2.875%.

In February 2005, the Company issued $250 million aggregate principal amount of convertible debentures, which will be due in 2035 and bear interest at a rate of 2.625% per annum. The Company used a portion of the net proceeds from this issuance to retire the bridge promissory note and plans to use the remainder of the net proceeds for general corporate purposes. A complete discussion of the terms of the convertible debentures is included in Note 19 to the consolidated financial statements.

During the year ended December 31, 2004, free cash flow, defined as cash provided by operating activities ($231.4 million and $179.6 million for the years ended 2004 and 2003, respectively) less purchases of property and equipment ($25.6 million and $13.5 million for the years ended 2004 and 2003, respectively), increased by $39.7 million, or 23.9%, to $205.8 million as compared to $166.1 million for the year ended December 31, 2003. The increase in free cash flow is primarily attributable to an increase in the Company’s cash basis net income, partially offset by an increased level of capital expenditures in 2004, primarily in technology.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Liquidity and Capital Resources (continued)

Net cash flow used in financing activities was $99.6 million, $102.3 million and $8.2 million for the years ended December 31, 2004, 2003 and 2002, respectively. During the year ended December 31, 2004, net cash flow used in financing activities primarily represented treasury stock activity and the payment of $63.7 million in dividends. During January 2004, BlackRock’s Board of Directors approved a two million share repurchase program. Pursuant to the repurchase program, the Company may make repurchases from time to time as market conditions warrant in open market or privately negotiated transactions at the discretion of the Company’s management. The authority to purchase 310,000 shares available under pre-existing programs terminated with the approval of this program. In addition to authorizing the new share repurchase program, the Board of Directors also approved a management stock buy-back (the Management Buy-Back) that authorized BlackRock to purchase shares owned by senior management through the repurchase program. Shares repurchased by the Company under the Management Buy-Back reduced the current two million share repurchase authorization. Eligible participants elected to sell an aggregate of 690,575 shares which, based on BlackRock’s average closing price for the five days ended January 28, 2004, approximated $40.4 million. In addition, the Company repurchased approximately 227,000 shares under the program in open market transactions for approximately $14.6 million through December 31, 2004. As a result, the Company is currently authorized to repurchase approximately 1.1 million shares under its repurchase program. Cash paid in conjunction with treasury stock transactions and the Company’s quarterly dividends was partially offset by the receipt of $15.4 million by the Company due to the exercise of employee stock options during the year ended December 31, 2004.

Total capital at December 31, 2004 was $785.5 million and was primarily comprised of stockholders’ equity.

Contractual Obligations and Commercial Commitments

The Company leases its primary office space under agreements that expire through 2017. In connection with certain lease agreements, the Company is responsible for escalation payments.

In connection with the management contract acquired on May 15, 2000 associated with the agreement and plan of merger of CORE Cap, Inc. with Anthracite, a BlackRock managed REIT, the Company recorded an $8.0 million liability using an imputed interest rate of 10%, the prevailing interest rate on the date of acquisition. For the year ended December 31, 2004, the related expense was $0.5 million. At December 31, 2004, the future commitment under the agreement is $6.5 million. If Anthracite’s management contract with BlackRock is terminated, not renewed or not extended for any reason other than cause, Anthracite would remit to the Company all future payments due under this obligation.

In the ordinary course of business, BlackRock enters into contracts (purchase obligations) with third parties pursuant to which the third parties provide services to or on behalf of BlackRock. Purchase obligations represent executory contracts which are either noncancelable or cancelable with penalty. At December 31, 2004, the Company’s obligations primarily reflect shareholder servicing arrangements related to client investments in the BlackRock Closed-end Funds, sub advisory agreements and standard service contracts with third parties for portfolio, market data and office services.

In many of the contracts, BlackRock agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnity vary from contract to contract and the amount of indemnification liability, if any, cannot be determined.

The Company has entered into a commitment to invest $14.0 million in Carbon Capital II, Inc., an alternative investment fund sponsored by BlackRock, of which $10.2 million remained unfunded at December 31, 2004.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Contractual Obligations and Commercial Commitments (continued)

On April 30, 2003, the Company purchased an investment manager of a hedge fund of funds for approximately $4.1 million in cash. Additionally, the Company has committed to purchase the remaining equity of the investment manager on March 31, 2008, subject to certain acceleration provisions. The purchase price of this remaining interest is performance-based and is not subject to a maximum, minimum or the continued employment of former employees of the investment manager with the Company. Based on the current performance of the investment manager, the Company’s obligation, if settled at December 31, 2004, would be approximately $3.2 million.

In January 2005, the Company closed its previously announced acquisition of SSR from MetLife, Inc. Under the terms of the transaction, MetLife, Inc. received at closing $284.6 million in cash and approximately 550,000 shares of BlackRock restricted class A common stock. Additional cash consideration, which could increase the purchase price by up to 25%, may be paid over 5 years contingent on certain measures. The Company is unable to estimate its potential obligation under these contingent payment provisions at this time.

In February 2005, the Company issued $250 million aggregate principal amount of convertible debentures, which will be due in 2035 and bear interest at a rate of 2.625% per annum. The Company used a portion of the net proceeds from this issuance to retire a $150 million bridge promissory note, the proceeds of which were used to fund a portion of the purchase price for the Company’s acquisition of SSR on January 31, 2005, and plans to use the remainder of the net proceeds for general corporate purposes. A complete discussion of the terms of the convertible debentures is included in Note 19 to the consolidated financial statements.

Summary of Commitments:

(Dollar amounts in thousands)	Total		2005		2006		2007		2008		2009		Thereafter
Lease Commitments	$	215,278	$	14,371	$	16,399	$	16,222	$	16,033	$	16,362	$	135,891
Purchase Obligations		26,193		16,677		5,657		3,083		776		—		—
Acquired Management Contract		6,500		1,500		1,000		1,000		1,000		1,000		1,000
Investment Commitments		10,179		10,179		—		—		—		—		—
Convertible Debentures		250,000		—		—		—		—		—		250,000
Acquisition Forward Contract		3,191		—		—		—		3,191		—		—
Total Commitments	$	511,341	$	42,727	$	23,056	$	20,305	$	21,000	$	17,362	$	386,891

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Critical Accounting Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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. Management considers the following accounting policies critical to an informed review of BlackRock’s consolidated financial statements. For a summary of these and additional accounting policies see Note 1 of the Notes to Consolidated Financial Statements beginning on page F-10.

Investments

Readily Marketable Securities

The accounting method used for the Company’s readily marketable securities is dependent upon the Company’s ownership level. If BlackRock does not possess significant influence over the issuer’s operations, the securities are classified as trading or available for sale, depending on the Company’s intent on holding the security. If BlackRock holds significant influence over the issuer of a readily marketable equity security, the investment is accounted for under the equity method of accounting and included in investments, other. Company management’s conclusion that BlackRock holds significant influence over an issuer whose security was previously classified as an available for sale security has a significant impact on the Company’s net income due to the related accounting treatment. Under the equity method, the Company’s share of the investee’s net income is recorded in investment income (loss) while unrealized gains and losses on available for sale securities are recorded in the accumulated other comprehensive income or loss component of stockholders’ equity until the securities are sold. Unrealized losses incurred during the year ended December 31, 2004 on readily marketable available for sale securities were less than $1 million.

Nonmarketable Equity Securities

Investments, other, are accounted for using the cost or equity methods of accounting. If the Company has significant influence over the investee’s operations, the equity method of accounting is used and the Company’s share of the investee’s net income is recorded as investment income (expense) for alternative investment products and other income for operating joint ventures. If the Company does not maintain significant influence over the investee’s operations, the cost method of accounting is used. Under the cost method of accounting, investment income is recognized as received or upon the sale of the security. Therefore, Company management’s conclusion that BlackRock holds significant influence over an issuer has a significant impact on the Company’s net income. Unrealized gains on investments accounted for under the cost method totaled approximately $0.6 million during the year ended December 31, 2004.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Critical Accounting Estimates (continued)

Investments (continued)

Impairment of Securities

The Company’s management periodically assesses impairment on investments to determine if it is other than temporary.

Several of the Company’s available for sale investments represent interests in collateralized debt obligations in which the Company acts in the capacity of collateral manager. The Company reviews cash flow estimates throughout the life of each collateralized debt obligation to determine if an impairment charge is required to be taken through current earnings. If the updated estimate of future cash flows (taking into account both timing and amount) is less than the last revised estimate, an impairment is recognized based on the excess of the carrying amount of the investment over its fair value.

In evaluating impairments on all other available for sale and other securities, the Company considers the length of time and the extent to which the security’s market value, if determinable, has been less than its cost, the financial condition and near-term prospects of the security’s issuer and the Company’s intended holding period for the security.

BlackRock Long Term Retention and Incentive Plan (LTIP)

The LTIP permits the grant of up to $240 million in deferred compensation awards (the “LTIP Awards”), subject to the achievement of certain performance hurdles by the Company no later than March 2007. As of January 31, 2005, the Company has awarded approximately $230 million in LTIP awards. If the performance hurdles are achieved, up to $200 million of the LTIP Awards will be funded with up to 4 million shares of BlackRock common stock to be surrendered by The PNC Financial Services Group, Inc. (“PNC”) and distributed to LTIP participants, less income tax withholding. Shares attributable to value in excess of PNC’s $200 million LTIP funding requirement will be available to support the Company’s future long-term retention and incentive programs but are not subject to surrender by PNC until the programs are approved by the Compensation Committee of the Company’s Board of Directors. In addition, shares distributed to LTIP participants will include an option to put such distributed shares back to BlackRock at fair market value. BlackRock will fund the remainder of the LTIP Awards with up to $40 million in cash.

Under the terms of the LTIP, awards fully vest if BlackRock’s average closing stock price is at least $62 for any 3-month period beginning on or after January 1, 2005 and ending on or prior to March 30, 2007. In addition, the vesting of awards is contingent on the participants’ continued employment with the Company for periods ranging from two to five years. An alternative performance hurdle provides for partial vesting of the LTIP based on specific targets for the Company’s earnings growth and relative stock price performance to peers over the term of the LTIP, subject to the authority of the Company’s Compensation Committee to reduce the amount of awards vested under the LTIP.

Due to the recent appreciation of the Company’s stock price above the $62 threshold, the Company’s management has determined that full vesting of LTIP awards is probable and recorded a charge of $104.0 million during the period reflecting LTIP awards earned through December 31, 2004 and related payroll taxes. Based on current level of LTIP awards outstanding and assuming full vesting remains probable, annual expense, during the year ended December 31, 2005 should be approximately $59.4 million.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Critical Accounting Estimates (continued)

Income Taxes

The Company accounts for income taxes under the liability method prescribed by Statement of Financial Accounting Standards (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 basis.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation generally is provided on the straight-line method over the estimated useful lives of the various classes of property and equipment. Accelerated methods are used for income tax purposes. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or lease terms, whichever is shorter. A change in an asset class’s estimated useful life by management would have a significant impact on the Company’s depreciation expense (approximately $19.7 million for the year ended December 31, 2004) due to the concentration of the Company’s property and equipment in relatively short-lived assets (useful lives of three to five years). A summary of the estimated useful lives used, by asset class, is included in Note 4 in the Notes to the Consolidated Financial Statements.

Recent Accounting Developments

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards Statement (“SFAS”) No. 123R, “Share-Based Payment.” This statement is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation” and supercedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily focusing on the accounting for transactions in which an entity obtains employee services in share-based payment transactions. Entities will be required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service, the requisite service period (usually the vesting period), in exchange for the award. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models. If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. This statement is effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. In accordance with the standard, the Company will adopt SFAS No. 123R during the year ended December 31, 2005.

Upon adoption, the Company has two application methods to choose from: the modified-prospective transition approach or the modified-retrospective transition approach. Under the modified-prospective transition method the Company would be required to recognize compensation cost for share-based awards to employees based on their grant-date fair value from the beginning of the fiscal period in which the recognition provisions are first applied as well as compensation cost for awards that were granted prior to, but not vested as of the date of adoption. Prior periods remain unchanged and pro forma disclosures previously required by SFAS No. 123 continue to be required. Under the modified-retrospective transition method, the Company would restate prior periods by recognizing compensation cost in the amounts previously reported in the pro forma footnote disclosure under SFAS No. 123. Under this method, the Company is permitted to apply this presentation to all periods presented or to the start of the fiscal year in which SFAS No. 123R is adopted. The Company would follow the same guidelines as in the modified-prospective transition method for awards granted subsequent to adoption and those that were granted and not yet vested.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Recent Accounting Developments (continued)

The Company will adopt the modified-prospective transition approach, which will reduce the Company’s net income by the grant-date fair value of all unvested stock options as of the date of adoption, July 1, 2005. In addition, diluted shares outstanding will be reduced for all shares reserved for unvested stock options expensed under SFAS 123R (approximately 1.8 million shares at December 31, 2004). The adoption of SFAS No. 123R is expected to reduce diluted earnings per share by approximately $0.01 per quarter through December 31, 2006.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets—An Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions”. SFAS No. 153 eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29, “Accounting for Nonmonetary Transactions,” and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for the fiscal periods beginning after June 15, 2005 and will be adopted by the Company for the quarter ended September 30, 2005. The adoption of SFAS No. 153 is not expected to have a significant impact on the Company’s financial statements.

FASB Staff Position (“FSP”) No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (“FSP 109-2”), provides guidance under FASB Statement No. 109, “Accounting for Income Taxes,” with respect to recording the potential impact of the repatriation provisions of the American Jobs Creation Act of 2004 (the “Jobs Act”) on enterprises’ income tax expense and deferred tax liability. The Jobs Act was enacted on October 22, 2004. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period of enactment to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying SFAS No. 109, “Accounting for Income Taxes.” The Company has not yet completed evaluating the impact of the repatriation provisions. Accordingly, as provided for in FSP 109-2, the Company has not adjusted its tax expense or deferred tax liability to reflect the repatriation provisions of the Jobs Act.

The Jobs Act created a one-time opportunity for U.S. companies to repatriate undistributed earnings from foreign subsidiaries at a substantially reduced federal tax rate. The reduced rate is achieved via an 85% dividends received deduction. In the Company’s case, foreign earnings must be repatriated by December 31, 2005 in order to qualify for this benefit. The Company has foreign subsidiaries with approximately $30 million in undistributed earnings that may be available for repatriation. There are a variety of additional technical requirements, related to such factors as the use of the repatriated earnings, which must be considered to take advantage of the reduced tax rate. The Company’s management has begun to evaluate the feasibility of repatriating the undistributed earnings of the Company’s foreign subsidiaries and expects to complete its evaluation by the end of the second quarter of 2005. Under the provisions of Accounting Principles Board Opinion No. 23, “Accounting for Income Taxes – Special Areas,” the Company has not recorded income taxes on the earnings of the foreign subsidiaries. The repatriation of undistributed earnings of foreign subsidiaries could increase the Company’s income tax expense by up to $2 million during the year ended December 31, 2005.

In December 2003, the FASB issued FASB Interpretation No. 46 (revised 2003), “Consolidation of Variable Interest Entities” (“FIN 46R”). FIN 46R addresses the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” to variable interest entities (“VIE”) and generally would require that the assets, liabilities and results of operations of a VIE be consolidated into the financial statements of the enterprise that has a controlling financial interest in it. The interpretation provides a framework for determining whether an entity should be evaluated for consolidation based on voting interests or significant financial support provided to the entity (“variable interests”).

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Recent Accounting Developments (continued)

An entity is classified as a VIE if total equity is not sufficient to permit the entity to finance its activities without additional subordinated financial support or its equity investors lack the direct or indirect ability to make decisions about an entity’s activities through voting rights, absorb the expected losses of the entity if they occur or receive the expected residual returns of the entity if they occur. Once an entity is determined to be a VIE, its assets, liabilities and results of operations should be consolidated with those of its primary beneficiary. The primary beneficiary of a VIE is the entity that either will absorb a majority of the VIE’s expected losses or has the right to receive a majority of the VIE’s expected residual returns. The expected losses and residual returns of a VIE include expected variability in its net income or loss, fees to decision makers and fees to guarantors of substantially all VIE assets or liabilities and are calculated in accordance with Statement of Financial Accounting Concept No. 7, “Using Cash Flow Information and Present Value in Accounting Measurements.”

A public enterprise with a variable interest in a VIE must apply FIN 46R to that VIE no later than the end of the first reporting period that ends after March 15, 2005, with the exception of special purpose entities (“SPEs”), as defined. A public enterprise with a variable interest in an SPE that has been deemed a VIE must apply FIN 46R to that VIE no later than the end of the first reporting period that ends after December 15, 2004. Additionally, if it is reasonably possible that an enterprise will consolidate or disclose information about a VIE when the guidance becomes effective, there are several disclosure requirements effective for all financial statements issued after January 31, 2004. The Company has included the required disclosures for VIEs in which it has significant involvement in the notes to the consolidated financial statements, which begin on page F-10 of this filing.

Pursuant to the conceptual framework set forth in FIN 46R, the Company’s management has concluded that BlackRock is the primary beneficiary of a strategic joint venture which was previously treated as an equity method investment. The aggregate statement of financial condition for the joint venture consolidated on January 1, 2004 is included in Note 1 to the Company’s consolidated financial statements.

Under previous guidance, the Company’s management determined that the Company was the primary beneficiary of six collateralized debt obligations (CDO) and consolidated the results of operations, financial position and cash flow for these entities during the three months ended September 30, 2003. The CDOs were subsequently deconsolidated under FIN 46R. A reconciliation of BlackRock’s adjusted condensed consolidated statements of financial condition and operations as of and for the three months ended September 30, 2003 to the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2003 is included in Note 1 to the Company’s consolidated financial statements.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Related Party Transactions

The Company and its consolidated subsidiaries provide investment advisory and administration services to the BlackRock Funds, the BlackRock Liquidity Funds, the BlackRock Closed-end Funds and other commingled funds. Revenues from services provided to these mutual funds, including amounts earned from PNC-related accounts, are as follows:

	Year ended December 31,
(Dollar amounts in thousands)	2004		2003		2002
Investment advisory and administration fees:
BlackRock Funds:
PNC	$	32,259	$	39,771	$	58,145
Other		37,807		29,590		25,502
BlackRock Closed-end Funds - Other		71,443		52,685		41,591
BlackRock Liquidity Funds
PNC		14,028		13,131		14,203
Other*		64,237		69,904		71,912
STIF - PNC		1,034		1,055		861
	$	220,808	$	206,136	$	212,214

* Includes the International Dollar Reserve Fund I, Ltd., a Cayman Islands open-ended limited liability company.

The Company provides investment advisory and administration services to certain PNC subsidiaries, Nomura Asset Management Co., Ltd. (Nomura), a strategic joint venture partner, and affiliates of Nomura for a fee, based on assets under management. In addition, the Company provides risk management and private client services to PNC.

Revenues from such services are as follows:

	Year ended December 31,
(Dollar amounts in thousands)	2004		2003		2002
Separate accounts - Nomura	$	9,594	$	13,021	$	10,856
Separate accounts - PNC		6,648		7,585		5,883
Private Client Services - PNC		5,525		5,525		5,525
Other income-risk management - PNC		5,000		5,000		5,000
	$	26,767	$	31,131	$	27,264

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Related Party Transactions (continued)

Total revenue earned by BlackRock for providing asset management and other services to PNC subsidiaries or PNC-related accounts for the years ended December 31, 2004, 2003 and 2002 totaled $64.5 million, $72.1 million and $89.6 million, respectively.

PNC subsidiaries and PNC-related accounts had the following investments in BlackRock sponsored mutual funds or separate accounts.

	Year ended December 31,
(Dollar amounts in millions)	2004		2003		2002
BlackRock Funds	$	7,214	$	9,850	$	11,498
BlackRock Liquidity Funds		10,424		8,280		9,415
STIF		630		744		655
Separate accounts		11,920		13,060		9,818
	$	30,188	$	31,934	$	31,386

The Company has entered into various memoranda of understanding and co-administration agreements with affiliates of PNC pursuant to which the Company pays service fees for PNC Advisors’ (PNC’s wealth management business) clients invested in the BlackRock Funds.

PNC provides general and administration services to the Company. Charges for such services were based on actual usage or on defined formulas which, in management’s view, resulted in reasonable allocations. Additionally, the Company has entered into subadvisory and consulting agreements with Nomura and an entity whose President and Chief Executive Officer serves on the Company’s Board of Directors.

Aggregate expenses included in the consolidated financial statements for transactions with related parties are as follows:

	Year ended December 31,
(Dollar amounts in thousands)	2004		2003		2002
Fund administration and servicing costs	$	18,342	$	26,949	$	40,304
General and administration		4,346		5,773		6,397
General and administration-consulting		4,571		1,447		1,616
	$	27,259	$	34,169	$	48,317

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Related Party Transactions (continued)

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 Funds. This entity finances broker sales commissions and receives all associated sales charges.

Included in accounts receivable is approximately $3.0 million and $9.8 million at December 31, 2004 and 2003, respectively, which primarily represents investment advisory and administration services provided to Nomura and PNC subsidiaries and affiliates.

Receivable from affiliates was $12.2 million and $0.1 million at December 31, 2004 and 2003, respectively. These amounts primarily represent deferred income taxes.

Accounts payable and accrued liabilities-affiliates were $3.7 million and $40.7 million at December 31, 2004 and 2003, respectively. These amounts primarily represent income taxes payable at 2003 and fund administration and servicing costs-affiliates payable to PNC in both years and do not bear interest.

Under the Management Buy-Back, eligible participants elected to sell 690,575 shares, representing 5.4% of the total holdings (defined as vested and unvested stock and stock options and, subject to satisfaction of performance goals, shares issuable under the LTIP) of senior management (8.3% of vested stock and stock options). Among the eligible participants, Laurence D. Fink, Chief Executive Officer, sold 250,000 shares; Ralph L. Schlosstein, President, sold 100,000 shares; Robert S. Kapito, Vice Chairman, sold 50,000 shares and Paul L. Audet, Chief Financial Officer, sold 25,000 shares. In all cases, the sales by these executives represented less than 10% of their total holdings.

PNC and BlackRock have entered into a tax disaffiliation agreement that sets forth each party’s rights and obligations with respect to income tax payments and refunds and addresses related matters such as the filing of tax returns and the conduct of audits or other proceedings involving claims made by taxing authorities.

For the years ended December 31, 2004, 2003 and 2002, BlackRock has filed its own consolidated federal income tax return and has filed selected state and municipal income tax returns separately and selected state and municipal income tax returns with one or more PNC subsidiaries on a combined or unitary basis. When BlackRock is included in a group’s combined or unitary state or municipal income tax filing with PNC subsidiaries, BlackRock’s share of the liability generally will 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 BlackRock have entered into a share surrender agreement whereby PNC will fund up to $200 million in LTIP awards with up to 4 million shares of BlackRock common stock. Shares attributable to value in excess of PNC’s LTIP funding requirement will be available to support the Company’s future long-term retention and incentive programs but are not subject to surrender by PNC until the programs are approved by the Compensation Committee of the Company’s Board of Directors. Based on the Company’s closing stock price on December 31, 2004 and assuming full vesting remains probable, approximately 1.4 million shares of BlackRock common stock will be available for future programs.

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 the value of 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.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

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’s 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.

Forward-looking Statements

This report and other statements BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously disclosed in BlackRock’s Securities and Exchange Commission (SEC) reports and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s advised or sponsored investment products and separately managed accounts; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or PNC; (11) terrorist activities and international hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates, which may adversely affect the value of advisory fees earned by BlackRock; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) changes in circumstances affecting the expense recognition of BlackRock’s 2002 Long-Term Retention and Incentive Plan; and (16) the integration of the business of SSRM into the business of BlackRock.

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of its business, BlackRock is exposed to the risk of interest rate, securities market and general economic fluctuations.

BlackRock’s investments consist primarily of BlackRock funds, private investment funds and debt securities. Occasionally, BlackRock invests in new mutual funds or advisory accounts (seed investments) sponsored by BlackRock in order to provide investable cash to the new mutual fund or advisory account to establish a performance history. As of December 31, 2004, the carrying value of seed investments to which the Company was exposed to equity price risk was $142.9 million. BlackRock does not hold any derivative securities to hedge its investments. The following table summarizes the fair values of the investments and provides a sensitivity analysis of the estimated carrying values of all financial instruments subject to equity price risk, assuming a 10% increase or decrease in equity prices:

December 31, 2004	Carrying Value		Carrying value assuming 10% increase		Carrying value assuming 10% decrease
Mutual funds	$	15,688	$	17,257	$	14,119
Equity securities		9,384		10,322		8,446
Total investments, trading		25,072		27,579		22,565
Mutual funds		6,279		6,907		5,651
Collateralized debt obligations		12,760		14,036		11,484
Total investments, available for sale		19,039		20,943		17,135
Other
Equity method		74,248		81,673		66,823
Cost method		34,605		38,066		31,145
Fair value		30,379		33,417		27,341
Total investments, other		139,232		153,156		125,309
Total investments subject to equity price risk	$	183,343	$	201,678	$	165,009
December 31, 2003
Mutual funds	$	10,648	$	11,713	$	9,583
Equity securities		8,021		8,823		7,219
Total investments, trading		18,669		20,536		16,802
Mutual funds		78,226		86,049		70,403
Collateralized debt obligations		15,822		17,404		14,240
Total investments, available for sale		94,048		103,453		84,643
Mutual funds		5,801		6,381		5,221
Other
Equity method		30,288		33,317		27,259
Cost method		9,139		10,053		8,225
Total investments, other		45,228		49,751		40,705
Total investments subject to equity price risk	$	157,945	$	173,740	$	142,150

At December 31, 2004 and 2003, total investments, trading, of $15.7 million and $10.6 million, respectively, and total investments, other, of $24.7 million and $19.0 million, respectively, reflect investments by BlackRock with respect to senior employee elections under BlackRock’s Voluntary and Involuntary Deferred Compensation Plans. Therefore, any change in the fair market value of these investments is offset by a corresponding change in the related deferred compensation liability.

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued)

The following table summarizes the carrying value of the Company’s investments in debt securities, which expose BlackRock to interest rate risk, at December 31, 2004 and 2003. The table also provides a sensitivity analysis of the estimated carrying value of these financial instruments, assuming 100 basis point upward and downward parallel shifts in the yield curve:

	Fair Market Value		Fair market value assuming +100 basis point shift		Fair market value assuming - 100 basis point shift
December 31, 2004
Mortgage backed securities	$	12,388	$	12,104	$	12,623
Corporate notes and bonds		9,371		8,971		9,796
Municipal debt securities		120		114		126
U.S. Treasury securities		22,275		20,022		24,660
	$	44,154	$	41,210	$	47,205
December 31, 2003
Municipal debt securities	$	76,978	$	70,099	$	84,414

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

The report of the independent registered public accounting firm and financial statements listed in the accompanying index are included in Item 15 of this report. See Index to Financial Statements on page F-1.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements on accounting and financial disclosure matters. We have not changed accountants in the two most recent fiscal years.

Item 9A. CONTROLS AND PROCEDURES

Under the direction of BlackRock’s Chief Executive Officer and Chief Financial Officer, BlackRock evaluated its disclosure controls and procedures and concluded that its disclosure controls and procedures were effective as of December 31, 2004.

No change in internal control over financial reporting occurred during the quarter ended December 31, 2004 that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.

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Part III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding directors and executive officers set forth under the captions “Item 1: Election of Directors – Information Concerning the Nominees and Directors” and “Item 1: Election of Directors – Other Executive Officers” of the Proxy Statement in connection with the 2005 Annual Meeting of Stockholders (the Proxy Statement) is incorporated herein by reference.

The information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 set forth under the caption “Item 1: Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement is incorporated herein by reference.

The information regarding BlackRock’s Code of Ethics for Chief Executive and senior Financial Officers under the caption “Item 1: Corporate Governance” in the Proxy Statement is incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION

The information contained in the sections captioned “Item 1: Compensation of Executive Officers” and “Item 1: Election of Directors-Compensation of Directors” of the Proxy Statement is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information contained in the sections captioned “Item 1: Ownership of BlackRock Common Stock” and “Item 1: Ownership of PNC Common Stock” of the Proxy Statement is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained in the section captioned “Item 1: Certain Relationships and Related Transactions” of the Proxy Statement is incorporated herein by reference.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information regarding BlackRock’s independent auditor fees and services in the section captioned “Independent Registered Public Accounting Firm” of the Proxy Statement is incorporated herein by reference.

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Part IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)    1.      Financial  Statements

Included herein at pages F-1 through F-41.

2. Financial Data Schedules

All schedules have been omitted because they are not applicable, not required, or the information required is included in the financial statements or notes thereto.

3. Exhibits

The following exhibits are filed as part of this Annual Report on Form 10-K:

Exhibit No.	Description
3.1(1)	Amended and Restated Certificate of Incorporation of the Registrant.
3.2(8)	Amended and Restated Bylaws of the Registrant.
3.3(8)	Amendment No. 1 to the Amended and Restated Bylaws of the Registrant.
3.4(8)	Amendment No. 2 to the Amended and Restated Bylaws of the Registrant.
4.1(1)	Specimen of Common Stock Certificate (per class).
4.2(1)	Amended and Restated Stockholders Agreement, dated September 30, 1999, by and among the Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.
4.3(9)	Amendment No. 1 to the Amended and Restated Stockholders Agreement, dated October 10, 2002, by and among the Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.
4.4	Indenture, dated as of February 23, 2005, between the Registrant and JPMorgan Chase Bank, N.A., as trustee, relating to the 2.625% Convertible Debentures due 2035.
4.5	Form of 2.625% Convertible Debenture due 2035 (included as Exhibit A to Exhibit 4.4).
10.1(1)	Tax Disaffiliation Agreement, dated October 6, 1999, among the Registrant, PNC Asset Management, Inc. and The PNC Financial Services Group, Inc., formerly PNC Bank Corp.
10.2(1)	1999 Stock Award and Incentive Plan. +
10.4(1)	Nonemployee Directors Stock Compensation Plan. +
10.5(1)	Initial Public Offering Agreement, dated September 30, 1999, among the Registrant, The PNC Financial Services Group, Inc., formerly PNC Bank Corp., and PNC Asset Management, Inc.
10.6(1)	Registration Rights Agreement, dated October 6, 1999, among the Registrant, PNC Asset Management, Inc. and certain holders of class B common stock of the Registrant.
10.7(1)	Services Agreement, dated October 6, 1999, between the Registrant and The PNC Financial Services Group, Inc., formerly PNC Bank Corp.
10.8(2)	BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan. +
10.9(2)	BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan. +
10.10(3)	Agreement of Lease, dated May 3, 2000, between 40 East 52nd Street L.P. and the Registrant.
10.11(4)	Amendment No. 1 to the 1999 Stock Award and Incentive Plan. +
10.12(4)	Amendment No. 1 to the BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan. +
10.13(4)	Amendment No. 1 to the BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan. +
10.14(5)	Agreement of Lease, dated September 4, 2001, between 40 East 52nd Street L.P. and the Registrant.
10.15(6)	BlackRock, Inc. 2001 Employee Stock Purchase Plan. +
10.16(11)	Amended and Restated BlackRock, Inc. Voluntary Deferred Compensation Plan. +

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Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (continued)

3. Exhibits (continued)

Exhibit No.	Description
10.17(11)	Amended and Restated BlackRock, Inc. Involuntary Deferred Compensation Plan. +
10.18(7)	Amendment No. 2 to the BlackRock, Inc. 1999 Stock Award and Incentive Plan. +
10.19(9)	BlackRock, Inc. 2002 Long Term Retention and Incentive Plan. +
10.20(9)	Share Surrender Agreement, dated October 10, 2002, among the Registrant, PNC Asset Management, Inc., and The PNC Financial Services Group, Inc.
10.21(9)	Employment Agreement, between the Registrant and Laurence D. Fink, dated October 10, 2002. +
10.22(9)	Amendment No. 1 to the Initial Public Offering Agreement, dated October 10, 2002, among The PNC Financial Services Group, Inc., PNC Asset Management, Inc. and the Registrant.
10.23(9)	Amendment No. 1 to the Registration Rights Agreement, dated October 10, 2002, among the Registrant, PNC Asset Management, Inc. and certain holders of class B common stock of the Registrant.
10.24(11)	Amended and Restated 1999 Annual Incentive Performance Plan. +
10.29(14)	First Amendment to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan. +
10.30(15)	Agreement of Lease, dated July 29, 2004, between Park Avenue Plaza Company L.P. and the Registrant.
10.31(15)	Letter Agreement, dated July 29, 2004, amending the Agreement of Lease between Park Avenue Plaza Company L.P. and the Registrant.
10.32(16)	Stock Purchase Agreement among MetLife, Inc., Metropolitan Life Insurance Company, SSRM Holdings, Inc. BlackRock, Inc. and BlackRock Financial Management, Inc., dated August 25, 2004.
10.33(17)	Form of Restricted Stock Agreement under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.
10.34(17)	Form of BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan Award Agreement. +
10.35(18)	Bridge Promissory Note between Morgan Stanley Senior Funding, Inc. and BlackRock, Inc., dated January 28, 2005
10.36	Purchase Agreement, dated February 16, 2005, between the Registrant and Morgan Stanley & Co., Inc., as representative of the initial purchasers named therein.
10.37	Second Amendment to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan. +
10.38	Registration Rights Agreement, dated as of February 23, 2005, between the Registrant and Morgan Stanley & Co. Incorporated, as representative of the initial purchasers named therein, relating to the 2.625% Convertible Debentures due 2055.
21.1	Subsidiaries of the Registrant.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1	Section 302 Certification of Chief Executive Officer.
31.2	Section 302 Certification of Chief Financial Officer.
32.1	Section 906 Certification of Chief Executive Officer and Chief Financial Officer.

(1) Incorporated by Reference to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-78367), as amended, originally filed with the Securities and Exchange Commission on May 13, 1999.

(2) Incorporated by Reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-32406), originally filed with the Securities and Exchange Commission on March 14, 2000.

(3) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2000.

(4) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2000.

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Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (continued)

3. Exhibits (continued)

(5) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2001.

(6) Incorporated by Reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-68670), originally filed with the Securities and Exchange Commission on August 30, 2001.

(7) Incorporated by Reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-68666), originally filed with the Securities and Exchange Commission on August 30, 2001.

(8) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2002.

(9) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2002.

(10) Incorporated by Reference to The PNC Financial Services Group, Inc.’s Annual Report on Form 10-K (Commission File No. 001-9718) for the year ended December 31, 2002.

(11) Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-15305), for the year ended December 31, 2002.

(12) Incorporated by Reference to the PNC Financial Services Group, Inc.’s Annual Report on Form 10-K (Commission File No. 001-9718) for the year ended December 31, 2003.

(13) Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-15305) for the year ended December 31, 2003.

(14) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2004.

(15) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2004.

(16) Incorporated by Reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K (Commission File No. 001-15305) filed on August 30, 2004.

(17) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305) for the quarter ended September 30, 2004.

(18) Incorporated by Reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K (Commission File No. 001-15305) filed on January 31, 2005.

+ Denotes Compensatory Plan.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLACKROCK, INC.
By:	/s/    LAURENCE D. FINK
	Laurence D. Fink Chairman, Chief Executive Officer and Director
March 10, 2005

Each of the officers and directors of BlackRock, Inc. whose signature appears below, in so signing, also makes, constitutes and appoints each of Robert P. Connolly and Ralph L. Schlosstein, or either of them, each acting alone, his true and lawful attorneys-in-fact, with full power and substitution, for him in any and all capacities, to execute and cause to be filed with the Securities and Exchange Commission any and all amendments to the Annual Report on Form 10-K, with exhibits thereto and other documents connected therewith and to perform any acts necessary to be done in order to file such documents, and hereby ratifies and confirms all that said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/    LAURENCE D. FINK         Laurence D. Fink	Chairman, Chief Executive Officer and Director (Principal Executive Officer)	March 10, 2005
/s/    PAUL L. AUDET         Paul L. Audet	Managing Director and Chief Financial Officer (Principal Financial Officer)	March 10, 2005
/s/    JOSEPH FELICIANI, Jr.         Joseph Feliciani, Jr.	Managing Director (Principal Accounting Officer)	March 10, 2005
/s/    WILLIAM O. ALBERTINI         William O. Albertini	Director	March 10, 2005
/s/    WILLIAM S. DEMCHAK         William S. Demchak	Director	March 10, 2005
/s/    MURRY S. GERBER         Murry S. Gerber	Director	March 10, 2005
/s/    JAMES GROSFELD         James Grosfeld	Director	March 10, 2005
/s/    DAVID H. KOMANSKY         David H. Komansky	Director	March 10, 2005
/s/    WILLIAM C. MUTTERPERL         William C. Mutterperl	Director	March 10, 2005

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SIGNATURES (continued)

/s/    FRANK T. NICKELL         Frank T. Nickell	Director	March 10, 2005
/s/    THOMAS H. O’BRIEN         Thomas H. O’Brien	Director	March 10, 2005
/s/    LINDA GOSDEN ROBINSON         Linda Gosden Robinson	Director	March 10, 2005
/s/    JAMES E. ROHR         James E. Rohr	Director	March 10, 2005
/s/    RALPH L. SCHLOSSTEIN         Ralph L. Schlosstein	Director	March 10, 2005
/s/    LAWRENCE M. WAGNER         Lawrence M. Wagner	Director	March 10, 2005

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TABLE OF CONTENTS

FINANCIAL STATEMENTS

Management’s Responsibility for Financial Reporting	F-2
Management’s Report on Internal Control Over Financial Reporting	F-3
Report of Independent Registered Public Accounting Firm	F-4
Consolidated Statements of Financial Condition	F-6
Consolidated Statements of Income	F-7
Consolidated Statements of Changes in Stockholders’ Equity	F-8
Consolidated Statements of Cash Flows	F-9
Notes to the Consolidated Financial Statements	F-10

F-1

Management’s Responsibility for Financial Reporting

BlackRock, Inc. is responsible for the preparation, quality and fair presentation of its published financial statements. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, as such, include judgments and estimates of management. BlackRock, Inc. also prepared the other information included in the Annual Report and is responsible for its accuracy and consistency with the consolidated financial statements.

Management is responsible for establishing and maintaining effective internal control over financial reporting. The internal control system is augmented by written policies and procedures and by audits performed by an internal audit staff which reports to the Audit Committee of the Board of Directors. Internal auditors test the operation of the internal control system and report findings to management and the Audit Committee, and corrective actions are taken to address identified control deficiencies and other opportunities for improving the internal control system. The Audit Committee, composed solely of outside directors, provides oversight to the financial reporting process.

F-2

Management’s Report on Internal Control Over Financial Reporting

Management of BlackRock, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment, management concluded that, as of December 31, 2004, the Company’s internal control over financial reporting is effective.

The Company’s independent registered public accounting firm has issued a report on our assessment of the Company’s internal control over financial reporting. This report begins on page F-4.

F-3

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

BlackRock, Inc.

We have audited the accompanying consolidated statements of financial condition of BlackRock, Inc. and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004. We also have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting that the Company maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on these financial statements, an opinion on management’s assessment, and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers, or persons performing similar functions, and effected by a company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-4

Report of Independent Registered Public Accounting Firm (continued)

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in Note 1 to the consolidated financial statements, in 2003, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, as amended by SFAS No. 148.

/s/ Deloitte & Touché LLP

New York, New York

March 4, 2005

F-5

BlackRock, Inc.

Consolidated Statements of Financial Condition

(Dollar amounts in thousands)

	Year ended December 31,
	2004			2003
Assets
Cash and cash equivalents	$	457,673		$	315,941
Accounts receivable		153,152			127,235
Investments		227,497			234,923
Property and equipment, net		93,701			87,006
Intangible assets		184,110			192,079
Receivable from affiliates		12,190			81
Other assets		16,912			9,958
Total assets	$	1,145,235		$	967,223
Liabilities
Accrued compensation	$	207,352		$	172,447
Long-Term Retention and Incentive Plan		103,999			—
Accounts payable and accrued liabilities
Affiliate		3,632			40,668
Other		27,185			19,430
Acquired management contract obligation		4,810			5,736
Other liabilities		12,736			14,395
Total liabilities		359,714			252,676
Minority interest		17,169			1,239
Stockholders’ equity
Common stock, class A, 19,243,878 shares issued		192			192
Common stock, class B, 45,499,510 and 46,120,737 shares issued, respectively		455			461
Additional paid-in capital		165,377			196,446
Retained earnings		650,016			570,535
Unearned compensation		(4,588	)		(10,270	)
Accumulated other comprehensive income		8,254			6,027
Treasury stock, class A, at cost 270,998 and 954,067 shares held, respectively		(17,545	)		(45,054	)
Treasury stock, class B, at cost 806,667 and 313,626 shares held, respectively		(33,809	)		(5,029	)
Total stockholders’ equity		768,352			713,308
Total liabilities, minority interest and stockholders’ equity	$	1,145,235		$	967,223

See accompanying notes to consolidated financial statements.

F-6

BlackRock, Inc.

Consolidated Statements of Income

(Dollar amounts in thousands, except share data)

	Year ended December 31,
	2004			2003			2002
Revenue
Investment advisory and administration fees
Mutual funds	$	220,949		$	206,136		$	212,214
Separate accounts		412,674			322,556			306,951
Other income
Affiliate		5,000			5,000			5,000
Other		86,688			64,520			52,812
Total revenue		725,311			598,212			576,977
Expense
Employee compensation and benefits		287,139			228,905			230,634
Long-Term Retention and Incentive Plan		103,999			—			—
Fund administration and servicing costs
Affiliates		18,342			26,949			40,304
Other		14,251			5,824			1,475
General and administration
Affiliates		8,917			7,220			8,013
Other		119,821			100,113			80,588
Amortization of intangible assets		947			925			824
Impairment of intangible assets		6,097			—			—
Total expense		559,513			369,936			361,838
Operating income		165,798			228,276			215,139
Non-operating income (expense)
Investment income		35,475			23,346			9,492
Interest expense		(835	)		(720	)		(683	)
Total non-operating income		34,640			22,626			8,809
Income before income taxes and minority interest		200,438			250,902			223,948
Income taxes		52,264			95,247			90,699
Income before minority interest		148,174			155,655			133,249
Minority interest		5,033			253			—
Net income	$	143,141		$	155,402		$	133,249
Earnings per share
Basic	$	2.25		$	2.40		$	2.06
Diluted	$	2.17		$	2.36		$	2.04
Dividend paid per share	$	1.00		$	0.40		$	0.00
Weighted-average shares outstanding
Basic		63,688,955			64,653,352			64,756,290
Diluted		65,960,473			65,860,368			65,307,548

See accompanying notes to consolidated financial statements.

F-7

BlackRock, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Year Ended December 31, 2004, 2003 and 2002

(Dollar amounts in thousands)

	Common Stock					Additional Paid-In Capital			Retained Earnings			Unearned Compensation		Accumulated Other Comprehensive Income (Loss)			Treasury Stock					Total Stockholders’ Equity
	Class A		Class B														Class A			Class B
January 1, 2002	$	159	$	487		$	184,041		$	307,498		($1,927	)		($3,537	)	$	—		($604	)	$	486,117
Net income		—		—			—			133,249		—			—			—		—			133,249
Conversion of class B common stock to class A common stock		11		(11	)		—			—		—			—			—		—			—
Issuance of class A common stock		6		—			11,969			—		(864	)		—			—		—			11,111
Issuance of class B common stock		—		—			331			—		—			—			—		—			331
Amortization of discount on issuance of class B common stock		—		—			(149	)		—		1,256			—			—		—			1,107
Treasury stock transactions		—		—			(3,881	)		—		—			—			(1,469	)	(3,358	)		(8,708	)
Tax benefit from stock options exercised		—		—			7,679			—		—			—			—		—			7,679
Foreign currency translation gain		—		—			—			—		—			1,715			—		—			1,715
Unrealized gain on investments, net		—		—			—			—		—			2,053			—		—			2,053
December 31, 2002		176		476			199,990			440,747		(1,535	)		231			(1,469	)	(3,962	)		634,654
Net income		—		—			—			155,402		—			—			—		—			155,402
Dividends paid		—		—			—			(25,614	)	—			—			—		—			(25,614	)
Conversion of class B common stock to class A common stock		12		(15	)		(15,263	)		—		—			—			15,266		—			—
Issuance of class A common stock		4		—			4,511			—		(9,693	)		—			23,199		—			18,021
Amortization of discount on issuance of class B common stock		—		—			—			—		958			—			—		—			958
Stock based compensation		—		—			802			—		—			—			—		—			802
Forfeiture of restricted common stock		—		—			(100	)		—		—			—			—		—			(100	)
Treasury stock transactions		—		—			—			—		—			—			(82,050	)	(1,067	)		(83,117	)
Tax benefit from stock options exercised		—		—			6,506			—		—			—			—		—			6,506
Foreign currency translation gain		—		—			—			—		—			3,097			—		—			3,097
Unrealized gain on investments, net		—		—			—			—		—			2,699			—		—			2,699
December 31, 2003		192		461			196,446			570,535		(10,270	)		6,027			(45,054	)	(5,029	)		713,308
Net income		—		—			—			143,141		—			—			—		—			143,141
Dividends paid		—		—			—			(63,660	)	—			—			—		—			(63,660	)
Conversion of class B common stock to class A common stock		—		(6	)		(30,966	)		—		—			—			30,972		—			—
Issuance of class A common stock		—		—			(4,663	)		—		10			—			25,549		—			20,896
Amortization of discount on issuance of class B common stock		—		—			(16	)		—		5,486			—			—		—			5,470
Stock based compensation		—		—			1,157			—		—			—			—		—			1,157
Forfeiture of restricted common stock		—		—			(5	)		—		186			—			(181	)	—			—
Treasury stock transactions		—		—			—			—		—			—			(28,831	)	(28,780	)		(57,611	)
Tax benefit from stock options exercised		—		—			3,424			—		—			—			—		—			3,424
Minimum pension liability adjustment		—		—			—			—		—			(177	)		—		—			(177	)
Foreign currency translation gain		—		—			—			—		—			2,987			—		—			2,987
Unrealized loss on investments, net		—		—			—			—		—			(583	)		—		—			(583	)
December 31, 2004	$	192	$	455		$	165,377		$	650,016		($4,588	)	$	8,254			($17,545	)	($33,809	)	$	768,352

See accompanying notes to consolidated financial statements.

F-8

BlackRock, Inc.

Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

	Year ended December 31,
	2004			2003			2002
Cash flows from operating activities
Net income	$	143,141		$	155,402		$	133,249
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		20,686			21,366			20,238
Impairment of intangible assets		6,097			—			—
Minority interest		5,033			220			—
Stock-based compensation		96,977			6,351			4,926
Deferred income taxes		(25,149	)		(2,311	)		7,053
Tax benefit from stock-based compensation		3,424			6,506			7,679
Net gain on investments		(13,636	)		(2,961	)		—
Changes in operating assets and liabilities:
Increase in accounts receivable		(27,040	)		(13,198	)		(19,699	)
Increase in investments, trading		(9,692	)		(22,057	)		(17,190	)
Decrease in receivable from affiliates		13,040			200			2,288
Decrease (increase) in other assets		(4,160	)		(540	)		946
Increase in accrued compensation		34,905			5,493			33,349
Increase in Long-Term Retention and Incentive Plan		18,969			—			—
Increase (decrease) in accounts payable and accrued liabilities		(30,539	)		23,193			(4,137	)
Increase (decrease) in other liabilities		(698	)		1,931			1,472
Cash provided by operating activities		231,358			179,595			170,174
Cash flows from investing activities
Purchase of property and equipment		(25,592	)		(13,453	)		(42,827	)
Purchase of investments		(97,636	)		(181,671	)		(353,762	)
Sale of investments		192,254			184,405			303,388
Deemed cash contribution upon consolidation of VIE		6,412			—			—
Consolidation of sponsored investment funds		(68,337	)		—			—
Acquisitions, net of cash acquired		(74	)		(8,930	)		(1,733	)
Cash provided by (used in) investing activities		7,027			(19,649	)		(94,934	)
Cash flows from financing activities
Issuance of class A common stock		—			623			2,658
Issuance of class B common stock		—			—			332
Dividends paid		(63,660	)		(25,614	)		—
Distributions paid to minority interest holders		(5,797	)		—			—
Subscriptions to consolidated sponsored investment funds		12,981			—			—
Purchase of treasury stock		(57,607	)		(83,418	)		(12,444	)
Reissuance of treasury stock		15,369			6,915			2,048
Acquired management contract obligation payment		(926	)		(842	)		(766	)
Cash used in financing activities		(99,640	)		(102,336	)		(8,172	)
Effect of exchange rate changes on cash and cash equivalents		2,987			3,097			1,715
Net increase in cash and cash equivalents		141,732			60,707			68,783
Cash and cash equivalents, beginning of year		315,941			255,234			186,451
Cash and cash equivalents, end of year	$	457,673		$	315,941		$	255,234

See accompanying notes to consolidated financial statements.

F-9

BlackRock, Inc.

Notes to the Consolidated Financial Statements

December 31, 2004

(Dollar amounts in thousands except share data)

Business

BlackRock, Inc. (together, with its subsidiaries, “BlackRock” or the “Company”) provides diversified investment management services to institutional clients, including certain subsidiaries of The PNC Financial Services Group, Inc. (“PNC”) and certain PNC-related accounts, and to individual investors through various investment vehicles. Institutional investment management services primarily consists of the active management of fixed income, equity and cash management client accounts and the management of the BlackRock Liquidity Funds (formerly the BlackRock Provident Institutional Funds) a money market mutual fund family serving the institutional market. Individual investor services primarily consists of the management of the Company’s sponsored open-end (“BlackRock Funds”) and closed-end mutual funds. BlackRock Advisors, Inc. (“BA”), BlackRock Institutional Management Corporation (“BIMC”), BlackRock Financial Management, Inc. (“BFM”), BlackRock International, Ltd. (“BI”), BlackRock Capital Management, Inc. (“BCM”) and BlackRock HPB Management, LLC (“HPB”) are registered investment advisers under the Investment Advisers Act of 1940, as amended, while BlackRock Investments, Inc. (“BII”) is a registered broker dealer under the Securities Exchange Act of 1934.

Basis of Presentation

BlackRock is indirectly majority owned by PNC. The consolidated financial statements of BlackRock include the assets, liabilities and earnings of its wholly-owned subsidiaries BA, BIMC, BFM, BI, BCM, BII, BlackRock Funding, Inc., BlackRock Overseas Investments Corporation, BlackRock Portfolio Holdings, Inc. and their subsidiaries. Intercompany accounts and transactions between the consolidated entities have been eliminated.

1. Significant Accounting Policies

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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, in which the Company is exposed to market and credit risk.

F-10

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Investments

Readily Marketable Securities

The accounting method used for the Company’s readily marketable securities is dependent upon the Company’s ownership level. If BlackRock does not possess significant influence over the issuer’s operations, the securities are classified as trading or available for sale, depending on the Company’s intent on holding the security. Investments, trading, primarily represent investments made by the Company in certain of the BlackRock Funds which are held in a Rabbi trust with respect to senior employee elections under BlackRock deferred compensation plans and are recorded at fair market value with unrealized gains and losses included in the accompanying consolidated statements of income as investment income (expense). Investments, available for sale, consist primarily of corporate investments in BlackRock funds and Collateralized Debt Obligations (CDO). The resulting unrealized gains and losses on investments, available for sale, are included in the accumulated other comprehensive income or loss component of stockholders’ equity, net of tax. If BlackRock holds significant influence over the issuer of a readily marketable equity security, the investment is accounted for under the equity method of accounting and included in investments, other. BlackRock’s share of the investee’s net income is included in investment income (expense).

Nonmarketable Equity Securities

Investments, other, consists primarily of certain institutional and private placement portfolios (“alternative investment products”) and operating joint ventures undertaken by the Company and are accounted for using the cost or equity methods of accounting. If the Company has significant influence over the investee’s operations, the equity method of accounting is used and the Company’s share of the investee’s net income is recorded as investment income (expense) for alternative investment products and other income for operating joint ventures. If the Company does not maintain significant influence over the investee’s operations, the cost method of accounting is used.

Occasionally, the Company will acquire a controlling equity interest in a sponsored investment fund as a seed investment. These funds are organized as investment companies, as defined in the American Institute of Certified Public Accountants Audit and Accounting Guide, Audits of Investment Companies (the “IC Guide”). As required by the IC Guide, all investments are carried at fair value, regardless of the Company’s ownership and the availability of a readily determinable market value for the investment, with the corresponding changes in the securities’ fair values reflected in investment income in the Company’s consolidated statement of income. In the absence of a publicly-available market value, fair value for an investment is estimated in good faith by the Company’s management based on such factors as the liquidity, financial condition and current and projected operating performance of the investment and, in the case of private investment fund investments, the net asset value provided by the fund’s investment manager. At December 31, 2004, these investments represent 33%, or approximately $75,000, of total investments.

F-11

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Investments (continued)

Realized gains and losses on trading, available for sale and other investments are calculated on a specific identification basis and, along with interest and dividend income, are included in investment income (expense) in the accompanying consolidated statements of income. The Company’s management periodically assesses impairment on investments to determine if it is other than temporary. Several of the Company’s available for sale investments represent interests in collateralized debt obligations in which the Company acts in the capacity of collateral manager. The Company reviews cash flow estimates throughout the life of each collateralized debt obligation to determine if an impairment charge is required to be taken through current earnings. If the updated estimate of future cash flows (taking into account both timing and amount) is less than the last revised estimate, an impairment is recognized based on the excess of the carrying amount of the investment over its fair value. In evaluating impairments on all other available for sale and other securities, the Company considers the length of time and the extent to which the security’s market value, if determinable, has been less than its cost, the financial condition and near-term prospects of the security’s issuer and the Company’s intended holding period for the security. Any impairment on investments which is deemed other than temporary is recorded in non-operating income (expense) on the consolidated statements of income as a realized loss.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation generally is provided on the straight-line method over the estimated useful lives of the various classes of property and equipment. Accelerated methods are used for income tax purposes. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or lease terms, whichever is shorter.

Intangible Assets

Intangible assets are comprised of goodwill, indefinite-lived intangible assets and intangible assets with a finite life. Impairment testing for goodwill at a reporting unit level is required on at least an annual basis. The Company performs its review of goodwill on September 30 of each fiscal year, barring adverse triggering events in the interim.

The Company periodically evaluates the carrying value of all other intangible assets. For finite lived intangible assets, impairment would be recognized when the future operating cash flows expected to be derived from such intangible assets are less than their carrying value. In such instances, impairment, if any, is measured on a discounted future cash flow basis. Impairments would be recognized for indefinite lived intangible assets if the asset’s carrying value exceeds its fair value.

Software Costs

The Company follows 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 of approximately $7,433 and $6,136 have been capitalized for the years ended December 31, 2004 and 2003, respectively, and are being amortized over an estimated useful life of three years.

F-12

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Stock-based Compensation

Prior to 2003, the Company accounted for all awards issued under its 1999 Stock Award and Incentive Plan (the “Award Plan”) and shares issued under the BlackRock, Inc. 2001 Employee Stock Purchase Plan (“ESPP”) under the intrinsic method of accounting. No stock-based employee compensation cost related to these plans has been reflected in the Company’s net income for the year ended December 31, 2002, as all awards granted to employees had an exercise price equal to the market value of the underlying common stock on the date of grant. Fair value disclosures are included in the notes to the consolidated financial statements.

Effective January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” prospectively to all employee awards granted, modified, or settled after January 1, 2003. Awards under the Company’s plans vest over periods ranging from two to four years. Therefore, the cost related to stock-based employee compensation included in the determination of net income for the years ended December 31, 2004, 2003 and 2002 is less than that which would have been recognized if the fair value based method had been applied to all awards since the original effective date of SFAS No. 123. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period.

	Year ended December 31,
	2004			2003			2002
Net income, as reported	$	143,141		$	155,402		$	133,249
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		4,218			1,162			657
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(13,970	)		(14,667	)		(8,985	)
Pro forma net income	$	133,389		$	141,897		$	124,921
Earnings per share:
Basic - as reported	$	2.25		$	2.40		$	2.06
Basic - pro forma	$	2.09		$	2.19		$	1.93
Diluted - as reported	$	2.17		$	2.36		$	2.04
Diluted - pro forma	$	2.02		$	2.15		$	1.91

F-13

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Treasury Stock

The Company records common stock purchased for treasury at cost. At the date of subsequent reissuance, the treasury stock account is reduced by the cost of such stock on the first-in, first-out basis.

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 and are affected by changes in assets under management, including market appreciation or depreciation and net subscriptions or redemptions. Investment advisory and administration fees for mutual funds are shown net of fees waived pursuant to expense limitations.

The Company also receives performance fees or an incentive allocation from alternative investment products and certain separate accounts. These performance fees are earned upon attaining specified investment return thresholds. Such fees are recorded as earned. Should the alternative investment products and separate accounts subject to performance fees not continue to meet specified investment return thresholds, performance fees and related employee compensation expense previously recorded may be subject to reversal. At December 31, 2004, no performance fees recorded by the Company are subject to reversal.

BlackRock provides a variety of risk management, investment analytics and investment system services to insurance companies, finance companies, pension funds, asset managers, consultants, mutual fund sponsors, REITs, commercial and mortgage banks, savings institutions and government agencies. These services are provided under the brand name BlackRock Solutions and include a wide array of risk management services and enterprise investment system outsourcing to clients. Fees earned for BlackRock Solutions services are either based on predetermined percentages of the market value of assets subject to the services or on fixed monthly or quarterly payments. The fees earned on risk management, investment analytics and investment system assignments are recorded as other income.

Administration and Servicing Costs

In connection with mutual funds advised by the Company, certain administration and servicing costs are expensed as incurred.

Comprehensive Income

All changes in stockholders’ equity, except those resulting from investments by stockholders and distributions to stockholders, are included in comprehensive income (loss).

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 common share is computed by dividing net income by the total weighted average number of shares of common stock outstanding and common stock equivalents. Diluted earnings per common share is computed using the treasury stock method.

F-14

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Business Segments

The Company’s management directs BlackRock’s operations as one business, the asset management business. As part of its asset management related services, the Company offers risk management, investment analytics and investment system services under the BlackRock Solutions brand name as a means to enhance its asset management relationships and to offset its technology-related expenses. Revenue earned for BlackRock Solutions’ products and services for the years ended December 31, 2004, 2003 and 2002 are included in note 5 to the consolidated financial statements.

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, other assets, accounts payable and accrued liabilities are carried at cost which approximates fair value due to the short maturities.

• The fair value of readily marketable investments is based on quoted market prices. If securities are not readily marketable, fair values are determined by the Company’s management. At December 31, 2004, the carrying value of investments approximates its fair value.

• At December 31, 2004, the estimated fair value of the acquired management contract obligation based on current rates offered to the Company for debt, assuming an investment rating of “AAA” or its equivalent, with a similar remaining maturity was approximately $5,590.

Derivative Instruments and Hedging Activities

SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 137 and No. 138, establishes accounting and reporting standards for derivative instruments, including certain derivatives embedded in other contracts and for hedging activities. SFAS No. 133 generally requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial condition and measure those investments at fair value.

The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in foreign currency exchange rates of its assets and liabilities. Derivative financial instruments are not entered into for trading or speculative purposes. The premium or discount on an instrument is amortized over the life of the contract. Changes in the fair value of the Company’s derivative financial instruments are recognized in current earnings, offset by the corresponding gain or loss on the related foreign denominated assets or liabilities, in the consolidated statements of income.

Income Taxes

The Company 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 basis.

F-15

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Reclassification of Prior Periods’ Statements

Certain items previously reported have been reclassified to conform with the current year’s presentation.

Recent Accounting Developments

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards Statement (“SFAS”) No. 123R, “Share-Based Payment.” This statement is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation” and supercedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily focusing on the accounting for transactions in which an entity obtains employee services in share-based payment transactions. Entities will be required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service, the requisite service period (usually the vesting period), in exchange for the award. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models. If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. This statement is effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. In accordance with the standard, the Company will adopt SFAS No. 123R during the year ended December 31, 2005.

Upon adoption, the Company has two application methods to choose from: the modified-prospective transition approach or the modified-retrospective transition approach. Under the modified-prospective transition method the Company would be required to recognize compensation cost for share-based awards to employees based on their grant-date fair value from the beginning of the fiscal period in which the recognition provisions are first applied as well as compensation cost for awards that were granted prior to, but not vested as of the date of adoption. Prior periods remain unchanged and pro forma disclosures previously required by SFAS No. 123 continue to be required. Under the modified-retrospective transition method, the Company would restate prior periods by recognizing compensation cost in the amounts previously reported in the pro forma footnote disclosure under SFAS No. 123. Under this method, the Company is permitted to apply this presentation to all periods presented or to the start of the fiscal year in which SFAS No. 123R is adopted. The Company would follow the same guidelines as in the modified-prospective transition method for awards granted subsequent to adoption and those that were granted and not yet vested. The Company will adopt the modified-prospective transition approach which will reduce the Company’s net income by the grant-date fair value of all unvested stock options as of the date of adoption, July 1, 2005. In addition, diluted shares outstanding will be reduced for all shares reserved for unvested stock options expensed under SFAS 123R (approximately 1.8 million shares at December 31, 2004). The adoption of SFAS No. 123R is expected to reduce diluted earnings per share by approximately $0.01 per quarter through December 31, 2006.

F-16

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Recent Accounting Developments (continued)

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets—An Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions”. SFAS No. 153 eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29, “Accounting for Nonmonetary Transactions,” and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for the fiscal periods beginning after June 15, 2005 and is required to be adopted by the Company for the year ended December 31, 2006. The adoption of SFAS No. 153 is not expected to have a significant impact on the Company’s financial statements.

FASB Staff Position (“FSP”) No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (“FSP 109-2”), provides guidance under FASB Statement No. 109, “Accounting for Income Taxes,” with respect to recording the potential impact of the repatriation provisions of the American Jobs Creation Act of 2004 (the “Jobs Act”) on enterprises’ income tax expense and deferred tax liability. The Jobs Act was enacted on October 22, 2004. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period of enactment to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying SFAS No. 109, “Accounting for Income Taxes.” The Company has not yet completed evaluating the impact of the repatriation provisions. Accordingly, as provided for in FSP 109-2, the Company has not adjusted its tax expense or deferred tax liability to reflect the repatriation provisions of the Jobs Act. The expected impact of the Company’s repatriation of its foreign subsidiaries’ undistributed earnings is discussed in note 15 to the consolidated financial statements.

In December 2003, the FASB issued FASB Interpretation No. 46 (revised 2003), “Consolidation of Variable Interest Entities” (“FIN 46R”). FIN 46R addresses the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” to variable interest entities (“VIE”) and generally would require that the assets, liabilities and results of operations of a VIE be consolidated into the financial statements of the enterprise that has a controlling financial interest in it. The interpretation provides a framework for determining whether an entity should be evaluated for consolidation based on voting interests or significant financial support provided to the entity (“variable interests”).

An entity is classified as a VIE if total equity is not sufficient to permit the entity to finance its activities without additional subordinated financial support or its equity investors lack the direct or indirect ability to make decisions about an entity’s activities through voting rights, absorb the expected losses of the entity if they occur or receive the expected residual returns of the entity if they occur. Once an entity is determined to be a VIE, its assets, liabilities and results of operations should be consolidated with those of its primary beneficiary. The primary beneficiary of a VIE is the entity that either will absorb a majority of the VIE’s expected losses or has the right to receive a majority of the VIE’s expected residual returns. The expected losses and residual returns of a VIE include expected variability in its net income or loss, fees to decision makers and fees to guarantors of substantially all VIE assets or liabilities and are calculated in accordance with Statement of Financial Accounting Concept No. 7, “Using Cash Flow Information and Present Value in Accounting Measurements.”

F-17

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Recent Accounting Developments (continued)

A public enterprise with a variable interest in a VIE must apply FIN 46R to that VIE no later than the end of the first reporting period that ends after March 15, 2004, with the exception of special purpose entities (“SPEs”), as defined. A public enterprise with a variable interest in an SPE which has been deemed a VIE must apply FIN 46R to that VIE no later than the end of the first reporting period that ends after December 15, 2003. Additionally, if it is reasonably possible that an enterprise will consolidate or disclose information about a VIE when the guidance becomes effective, there are several disclosure requirements effective for all financial statements issued after January 31, 2003. The Company has included the required disclosures for VIEs in which it has significant involvement, but has not consolidated, in Note 9 to these consolidated financial statements.

Pursuant to the conceptual framework set forth in FIN 46R, the Company’s management has concluded that BlackRock is the primary beneficiary of a strategic joint venture which was previously treated as an equity method investment. The aggregate statement of financial condition for the joint venture consolidated on January 1, 2004 is as follows:

	January 1, 2004
Assets
Cash and cash equivalents	$	6,412
Accounts receivable		2,564
Property and equipment, net		842
Other assets		936
Total assets	$	10,754
Liabilities and Minority Interest
Accounts payable and accrued liabilities	$	4,499
Other liabilities		75
Total liabilities		4,574
Minority interest		3,906
Total liabilities and minority interest	$	8,480

F-18

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Recent Accounting Developments (continued)

Under previous guidance, the Company’s management determined that the Company was the primary beneficiary of six CDOs and consolidated the results of operations, financial position and cash flow for these entities during the three months ended September 30, 2003. The CDOs were subsequently deconsolidated under FIN 46R. A reconciliation of BlackRock’s adjusted condensed consolidated statements of financial condition and operations as of and for the three months ended September 30, 2003 to the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2003 is as follows:

Condensed Consolidating Statement of Financial Condition

September 30, 2003

(unaudited)

	As Reported		Deconsolidation Adjustments			As Adjusted
Assets
Cash and cash equivalents	$	241,567	$	0		$	241,567
Restricted cash		148,383		(148,383	)		—
Investments		2,550,443		(2,295,715	)		254,728
Other assets		544,409		(121,010	)		423,399
Total assets	$	3,484,802		($2,565,108	)	$	919,694
Liabilities
Borrowings	$	2,035,637		($2,035,637	)	$	0
Unrealized depreciation on derivative contracts		76,305		(76,305	)		—
Other liabilities		301,872		(80,462	)		221,410
Total liabilities		2,413,814		(2,192,404	)		221,410
Mandatorily redeemable preferred stock of subsidiaries		105,547		(105,547	)		—
Minority interest		269,181		(268,259	)		922
Stockholders’ equity		696,260		1,102			697,362
Total liabilities, minority interest and stockholders’ equity	$	3,484,802		($2,565,108	)	$	919,694

F-19

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Recent Accounting Developments (continued)

Condensed Consolidated Statement of Operations

Three months ended September 30, 2003

(unaudited)

	As Reported			Deconsolidation Adjustments			As Adjusted
Revenue
Investment advisory and administration fees	$	129,601		$	3,436		$	133,037
Other income		17,307			—			17,307
Total revenue		146,908			3,436			150,344
Expense
Employee compensation and benefits		58,956			—			58,956
Other operating expenses		36,242			(2,498	)		33,744
Total expense		95,198			(2,498	)		92,700
Operating income		51,710			5,934			57,644
Non operating income (expense)
Investment income		66,923			(60,837	)		6,086
Interest expense		(24,165	)		24,013			(152	)
		42,758			(36,824	)		5,934
Income before income taxes, minority interest and cumulative effect of accounting change		94,468			(30,890	)		63,578
Income taxes		23,579			—			23,579
Income before minority interest and cumulative effect of accounting change		70,889			(30,890	)		39,999
Minority interest		30,930			(30,984	)		(54	)
Income before cumulative effect of accounting change		39,959			94			40,053
Cumulative effect of accounting change		139			(139	)		—
Net income	$	40,098			($45	)	$	40,053
Earnings per share
Basic	$	0.62		$	0.00		$	0.62
Diluted	$	0.61		$	0.00		$	0.61

F-20

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

2. Acquisition

In January 2005, the Company closed its previously announced acquisition of SSRM Holdings, Inc. (SSR), the holding company of State Street Research & Management Company and SSR Realty Advisors, Inc., from MetLife, Inc. for an adjusted purchase price of $284,559 in cash and approximately 550,000 shares of BlackRock restricted class A common stock. SSR, through its subsidiaries, actively manages stock, bond, balanced and real estate portfolios for both institutional and individual investors with approximately $55,000,000 in assets under management at December 31, 2004. Additional cash consideration may be paid over 5 years contingent on certain measures. The Company initially financed $150,000 of the purchase price with a bridge promissory note from Morgan Stanley Senior Funding, Inc. at an annual rate of 2.875%.

In February 2005, the Company issued $250,000 aggregate principal amount of convertible debentures. The Company used a portion of the net proceeds from this issuance to retire the bridge promissory note. A complete discussion of the terms of the convertible debentures is included in Note 19 to the consolidated financial statements.

A summary of the fair values of the net assets acquired in this acquisition is as follows:

Accounts receivable	$	13,901
Assets held for sale		112,184
Investments		73,922
Property and equipment		8,821
Other assets		47,305
Goodwill		10,451
Management contracts acquired		241,558
Liabilities assumed		(234,301	)
Total purchase price, including acquisition costs	$	273,841
Summary of consideration, net of cash acquired
Cash	$	236,629
Restricted class A common stock, at fair value		37,212
	$	273,841

F-21

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

2. Acquisition (continued)

The following unaudited pro forma combined financial information is presented for illustrative purposes only and is not necessarily indicative of the combined results of operations for future periods or the results of operations that actually would have been realized had BlackRock and SSR been a combined company during the specified years. The pro forma combined financial information is based on the respective historical audited financial statements and related notes of BlackRock and SSR and does not reflect acquisition-related compensation incurred by SSR during 2004 and are adjusted for benefits associated with the termination of a lease held by SSR. Management has not finalized the Company’s integration plans. Accordingly, this pro forma information does not include all costs related to the integration. When the costs are determined, they will either increase the amount of goodwill recorded or decrease net income, depending on the nature of the costs. Management expects to realize net operating synergies from this transaction due to the related product expansion and scale benefits. The pro forma information does not reflect the potential impact of these net operating synergies.

	Year ended December 31,
	2004		2003
	(unaudited)
Revenue, excluding performance fees	$	995,420	$	811,017
Performance fees		52,883		9,793
Total revenue	$	1,048,303	$	820,810
Operating income	$	235,578	$	250,132
Net income	$	184,770	$	169,460
Earnings per share:
Basic	$	2.88	$	2.60
Diluted	$	2.78	$	2.55

F-22

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

3. Investments

A summary of the cost and carrying value of investments, available for sale, is as follows:

			Gross Unrealized					Carrying Value
December 31, 2004	Cost		Gains		Losses
Mutual funds	$	6,226	$	70	($	17	)	$	6,279
Collateralized debt obligations		10,576		2,184		—			12,760
Total investments, available for sale	$	16,802	$	2,254	($	17	)	$	19,039
December 31, 2003
Mutual funds	$	78,913	$	147	($	834	)	$	78,226
Municipal debt securities		77,061		638		(721	)		76,978
Collateralized debt obligations		11,752		4,070		—			15,822
Total investments, available for sale	$	167,726	$	4,855	($	1,555	)	$	171,026

At December 31, 2004, the Company’s investments, available for sale, includes investments with a fair market value of $3,115, the cost of which has been $17 in excess of its carrying value for less than twelve months.

F-23

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

3. Investments (continued)

A summary of the cost and carrying value of investments, trading and other, is as follows:

December 31, 2004	Cost		Carrying Value
U.S. government securities	$	22,276	$	22,275
Mutual funds		13,869		15,688
Mortgage backed securities		12,435		12,388
Equity securities		5,976		9,384
Corporate notes and bonds		9,373		9,371
Municipal debt securities		119		120
Total investments, trading		64,048		69,226
Other
Equity method		70,873		74,248
Cost method		33,885		34,605
Fair value		30,688		30,379
Total investments, other		135,446		139,232
Total investments, trading and other	$	199,494	$	208,458
December 31, 2003
Mutual funds	$	9,573	$	10,648
Equity securities		5,976		8,021
Total investments, trading		15,549		18,669
Mutual funds		7,000		5,801
Other
Equity method		28,793		30,288
Cost method		9,139		9,139
Total investments, other		44,932		45,228
Total investments, trading and other	$	60,481	$	63,897

F-24

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

3. Investments (continued)

The carrying value of investments in debt securities by contractual maturity at December 31, 2004, is as follows:

Maturity Date	Carrying Value
1-5 years	$	12,411
5-10 years		15,456
After 10 years		16,287
Total	$	44,154

A summary of sale activity in the Company’s available for sale portfolio during the years ended December 31, 2004, 2003 and 2002 is as follows:

	Year ended December 31,
	2004			2003			2002
Sales proceeds	$	177,022		$	180,509		$	301,517
Gross realized gains	$	1,737		$	2,293		$	3,871
Gross realized losses		(2,239	)		(676	)		(4,120	)
Net realized gain (loss)	($	502	)	$	1,617		($	249	)

During the years ended December 31, 2004, 2003 and 2002, gross realized losses include impairments of the Company’s seed investments of approximately $1,100, $100 and $4,000, respectively.

F-25

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

4. Property and Equipment

Property and equipment consists of the following:

	Estimated useful life - in years	December 31,
		2004		2003
Land	N/A	$	3,564	$	3,564
Building	39		16,972		16,972
Building improvements	15		8,024		6,486
Leasehold improvements	1-13		42,292		40,941
Equipment and computer software	3-5		98,839		80,492
Furniture and fixtures	7		21,327		18,507
Construction in progress	N/A		3,462		822
			194,480		167,784
Less accumulated depreciation			100,779		80,778
Property and equipment, net		$	93,701	$	87,006

N/A - Not applicable

Building and building improvements reflect the Wilmington, Delaware office.

Depreciation expense was approximately $19,739, $20,441, and $19,414 for the years ended December 31, 2004, 2003 and 2002, respectively.

5. Other Income

Other income consists of the following:

	Year ended December 31,
	2004		2003		2002
BlackRock Solutions	$	80,541	$	58,715	$	49,860
Investment accounting		6,002		4,611		3,469
Other		5,145		6,194		4,483
	$	91,688	$	69,520	$	57,812

F-26

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

6. Intangible Assets

Intangible assets at December 31, 2004 and 2003 consist of the following:

	Weighted-avg. estimated useful life	December 31, 2004
		Gross Carrying Amount		Accumulated Amortization		Intangible Assets
Goodwill	N/A	$	242,766	$	65,842	$	176,924
Management contracts acquired	N/A		2,842		—		2,842
Other	N/A		23		—		23
Total goodwill and unamortized intangible assets			245,631		65,842		179,789
Management contract acquired	10.0		8,040		3,719		4,321
Total amortized intangible assets	10.0		8,040		3,719		4,321
Total intangible assets		$	253,671	$	69,561	$	184,110
	Weighted-avg. estimated useful life	December 31, 2003
		Gross Carrying Amount		Accumulated Amortization		Intangible Assets
Goodwill	N/A	$	243,787	$	65,842	$	177,945
Management contracts acquired	N/A		8,866		—		8,866
Total goodwill and unamortized intangible assets			252,653		65,842		186,811
Management contract acquired	10.0		8,040		2,915		5,125
Other	2.2		286		143		143
Total amortized intangible assets	9.7		8,326		3,058		5,268
Total intangible assets		$	260,979	$	68,900	$	192,079

a) Goodwill

The consolidated financial statements reflect the results of operations of the former BlackRock Financial Management, L.P. and BFM Advisory L.P., which were acquired by PNC on February 28, 1995. Goodwill recognized at acquisition approximated $240,000 and was amortized on a straight-line basis over 25 years prior to the adoption of SFAS No. 142 in 2002. The $1,021 decrease in goodwill is related to the reversal of an obligation to purchase the minority interest of a subsidiary and the associated decline in the subsidiary’s implied enterprise value.

F-27

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

6. Intangible Assets (continued)

b) Management Contract Acquired - Amortizable

On May 15, 2000, BlackRock entered into a contract in connection with the agreement and plan of merger of CORE Cap, Inc. with Anthracite Capital, Inc. (“Anthracite”), a BlackRock managed REIT. This agreement assigns the managerial rights and duties of CORE Cap, Inc.’s former manager to BlackRock for consideration in the amount of $12,500 to be paid by BlackRock over a ten-year period. The present value of the acquired contract using an imputed interest rate of 10%, the prevailing interest rate on the date of acquisition, was $8,040 on May 15, 2000. This amount was recorded as an intangible asset and is being amortized on a straight-line basis over ten years.

c) Management Contracts Acquired - Unamortized

During 2004 and 2002, the Company acquired an equity hedge fund manager and a hedge fund of funds manager. In conjunction with these acquisitions, the Company assumed management contracts over commingled investment vehicles which are indefinite in nature. Therefore, the fair market value of the contracts were recorded as intangible assets, not subject to amortization.

The $6,024 decrease in management contracts acquired, not subject to amortization, during 2004 primarily represents the write-off of the carrying value attributable to management contracts of certain funds acquired during 2002. In February 2004, the respective funds’ portfolio manager resigned from the Company. As a result, the Company commenced an orderly liquidation of those funds and recognized an impairment charge of $6,097 in impairment of intangible assets on the Company’s consolidated statement of income.

F-28

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

6. Intangible Assets (continued)

Future expected amortization of intangible assets expense for each of the five succeeding years is as follows:

2005	$	804
2006		804
2007		804
2008		804
2009		804

7. Derivative Financial Instruments

The Company currently enters into forward foreign currency exchange contracts with a major multinational financial institution to hedge foreign currency exposures related to non-dollar denominated seed investments in its consolidated statements of financial condition. At December 31, 2004 and 2003, the contracts had a notional amount of $13,382 and $24,801, respectively, and unrealized depreciation of $172 and $171, respectively. Unrealized depreciation on derivatives is included in other liabilities on the consolidated statements of financial condition with the respective change included in general and administration expense on the consolidated statements of income. All contracts mature during June 2005.

By using derivative financial instruments to hedge exposure to changes in exchange rates, the Company exposes itself to market risk. Market risk from forward foreign currency exchange contracts is the effect on the value of a financial instrument that results from a change in currency exchange rates. The Company manages exposure to market risk associated with foreign currency exchange contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

F-29

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

8. Commitments

a) Lease Commitments

The Company leases its primary office space under agreements which expire through 2017. Future minimum commitments under these operating leases, net of rental reimbursements of $1,569 through 2005 from a sublease arrangement, are as follows:

2005	$	14,371
2006		16,399
2007		16,222
2008		16,033
2009		16,362
Thereafter		135,891
	$	215,278

In connection with certain lease agreements, the Company is responsible for escalation payments.

Occupancy expense amounted to $23,407, $22,033 and $19,263 for the years ended December 31, 2004, 2003 and 2002, respectively.

b) Acquired Management Contract Obligation

In connection with the management contract acquired associated with the agreement and plan of merger of CORE Cap, Inc. with Anthracite, a BlackRock managed REIT, the Company recorded an $8,040 liability using an imputed interest rate of 10%, the prevailing interest rate on the date of acquisition. For the years ended December 31, 2004, 2003 and 2002, the related expense was $522, $602 and $683, respectively. At December 31, 2004, the future commitment under the agreement is as follows:

2005	$	1,500
2006		1,000
2007		1,000
2008		1,000
2009		1,000
Thereafter		1,000
		6,500
Less: imputed interest		1,690
Present value of management contract	$	4,810

F-30

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

8. Commitments (continued)

b) Acquired Management Contract Obligation (continued)

If Anthracite’s management contract with BlackRock, Inc. is terminated, not renewed or not extended for any reason other than cause, Anthracite would remit to the Company all future payments due under this obligation.

c) Indemnifications

In the ordinary course of business, BlackRock enters into contracts with third parties pursuant to which the third parties provide services on behalf of BlackRock. In many of the contracts, BlackRock agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnity vary from contract to contract and the amount of indemnification liability, if any, cannot be determined.

d) Other

The Company has entered into a commitment to invest $14,000 in Carbon Capital II, Inc., an alternative investment fund sponsored by BlackRock, of which $10,179 remained unfunded at December 31, 2004.

On April 30, 2003, the Company purchased an investment manager of a hedge fund of funds for approximately $4,100 in cash. Additionally, the Company has committed to purchase the remaining equity of the investment manager on March 31, 2008, subject to certain acceleration provisions. The purchase price of this remaining interest is performance-based and is not subject to a maximum, minimum or the continued employment of former employees of the investment manager with the Company. Based on the current performance of the investment manager, the Company’s obligation, if settled at December 31, 2004, would be approximately $3,200.

F-31

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

9. Variable Interest Entities not Subject to Consolidation

The Company is involved with various entities in the normal course of business that may be deemed to be VIEs and may hold interests therein, including investment advisory agreements and equity securities, which may be considered variable interests. The Company engages in these transactions principally to address client needs through the launch of collateralized debt obligations and private investment funds. At December 31, 2004, the aggregate assets, debt and BlackRock’s equity ownership, which represents the extent of the Company’s equity exposure, in VIEs in which BlackRock has not been deemed primary beneficiary are as follows:

December 31, 2004	Assets		Debt		BlackRock Equity Ownership
Collateralized debt obligations	$	3,152,000	$	2,700,000	$	13,800
Private investment funds		1,872,000		125,000		33,000
Total	$	5,024,000	$	2,825,000	$	46,800
December 31, 2003
Collateralized debt obligations	$	2,740,000	$	2,370,000	$	15,822
Private investment funds		375,000		227,000		5,000
Total	$	3,115,000	$	2,597,000	$	20,822

10. Employee Benefit Plans

Involuntary Deferred Compensation Plan

Effective January 2002, the Company adopted an Involuntary Deferred Compensation Plan for the purpose of providing deferred compensation and retention incentives to key officers and employees. The Involuntary Deferred Compensation Plan provides for a mandatory deferral of up to 15% of annual incentive compensation. The mandatory deferral is matched by BlackRock in an amount equal to 20% and vests on a straight-line basis over a three-year vesting period. The matching contribution and investment income related to the mandatory deferral vests on the third-year anniversary of the deferral date. The Company funds the obligation through the establishment of a Rabbi trust on behalf of the participants in the plan.

Voluntary Deferred Compensation Plan

Effective January 2002, the Company adopted a Voluntary Deferred Compensation Plan which allows participants to elect to defer between 1% and 100% of that portion of his or her annual incentive compensation not mandatorily deferred under the BlackRock Involuntary Deferred Compensation Plan. The participants must specify a deferral period of one, three, five or ten years. The Company funds the obligation through the establishment of a Rabbi trust on behalf of the participants in the plan.

F-32

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

10. Employee Benefit Plans (continued)

The Rabbi trust established for the Involuntary and Voluntary Deferred Compensation Plans is reflected in investments as trading and other securities in the Company’s consolidated statements of financial condition. The corresponding liability is reflected in the Company’s consolidated statements of financial condition as accrued compensation. Earnings in the Rabbi trust, including unrealized appreciation (depreciation), are reflected as non-operating income or loss and employee compensation and benefits in equal amounts in the accompanying consolidated statements of income.

Defined Contribution Plans

The Company’s employees participate in PNC’s Incentive Savings Plan (“ISP”), a defined contribution plan. Under the ISP, employee contributions of up to 6% of eligible compensation, subject to Internal Revenue Code limitations, are matched by the Company. ISP expenses for the Company were $5,452, $4,224 and $3,872 for the years ended December 31, 2004, 2003 and 2002, respectively. Contributions to the ISP were matched primarily by shares of BlackRock’s class A common stock in 2004 and 2003 and PNC’s common stock in 2002, respectively. 500,000 shares of BlackRock’s class A common stock have been reserved for the ISP of which approximately 345,000 shares have been issued as of December 31, 2004.

BI contributes to the BlackRock Group Personal Pension Plan (the “Pension Plan”), a defined contribution plan, for all employees who have been employed with BI for greater than three months. Under the Pension Plan, BI contributes 12.8% of each employee’s eligible compensation, which totaled $772, $663 and $542 during the years ended December 31, 2004, 2003 and 2002, respectively.

Postretirement Benefits

PNC provides certain postretirement health care and life insurance benefits for eligible employees. Expenses for postretirement benefits allocated to the Company by PNC were $111, $37 and $354 for the years ended December 31, 2004, 2003 and 2002, respectively. At December 31, 2004 and 2003, accrued postretirement benefits included in the consolidated statements of financial condition totaled $740 and $1,025, respectively. No separate financial obligation data for the Company is available with respect to such plan.

Noncontributory Defined Benefit Pension Plan

Certain employees of the Company participate in PNC’s noncontributory defined benefit pension plan. Effective July 1, 2004, PNC froze all accrued benefits related to BlackRock participants under this plan and closed this plan to new BlackRock participants. Retirement benefits are based on compensation level, age and length of service. Pension contributions are based on actuarially determined amounts necessary to fund total benefits payable to plan participants. During 2000, the Company contributed approximately $1,600 to the plan and had prepaid balances of approximately $649 and $573 in pension benefit obligation as of December 31, 2004 and 2003, respectively. These amounts were recorded in other assets on the consolidated statements of financial condition. BlackRock incurred $10 and $522 in pension expense during the years ended December 31, 2004 and 2003, respectively, and did not incur pension expense during the year ended December 31, 2002.

F-33

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

11. Stock Award and Incentive Plans

Stock Award and Incentive Plan

Pursuant to the Company’s Award Plan, options are granted at an exercise price not less than the market value of common stock on the date of grant. These options have a ten-year life, vest ratably over periods ranging from 2-4 years and become exercisable upon vesting.

Stock option activity during 2002 - 2004 is summarized below:

Outstanding at	Shares under option	Weighted-avg. exercise price
December 31, 2001	2,239,308	$	32.80
Granted	3,731,000		37.36
Exercised	130,272		14.00
Canceled	33,672		30.54
December 31, 2002	5,806,364		36.17
Granted	15,000		41.39
Exercised	209,357		20.65
Canceled	164,000		40.48
December 31, 2003	5,448,007		36.65
Exercised	375,021		33.42
Canceled	137,250		38.31
December 31, 2004	4,935,736	$	36.84

Through January 2005, the Company has issued approximately 330,000 restricted shares of class A common stock to certain employees under the Award Plan. These restricted shares vest over periods ranging from three to four years and are expensed on a straight line method over the respective vesting period. Expense incurred during the years ended December 31, 2004 and 2003, totaled $5,060 and $213, respectively.

A maximum of 9,000,000 shares of class A common stock are authorized for issuance under the Award Plan at December 31, 2004. Of this amount, 2,941,885 shares remain available for future awards. The number of shares vested at December 31, 2004 was 1,375,836.

F-34

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

11. Stock Award and Incentive Plans (continued)

Stock Award and Incentive Plan (continued)

Stock options outstanding and exercisable as of December 31, 2004 are as follows:

Range of exercise prices	Outstanding shares under option	Weighted-avg. remaining contractual life	Outstanding shares Weighted-avg. exercise price		Exercisable shares under option	Exercisable shares Weighted-avg. exercise price
$14.00	368,002	4.75	$	14.00	368,002	$	14.00
$32.47	3,000	6.29		32.47	1,500		32.47
$37.36	3,542,500	7.79		37.36	—		—
$40.03 - $44.22	1,022,234	5.99		43.27	1,006,334		43.30
	4,935,736	7.28	$	36.84	1,375,836	$	35.42

BlackRock, Inc. Long-Term Retention and Incentive Plan

On October 15, 2002, the Company finalized the BlackRock, Inc. Long-Term Retention and Incentive Plan (the “LTIP”). The LTIP permits the grant of up to $240,000 in deferred compensation awards (the “LTIP Awards”), subject to the achievement of certain performance hurdles by the Company no later than March 2007. In conjunction with the LTIP, BlackRock may issue up to 3.5 million stock options under the Award Plan with an exercise price equal to market value subject to vesting at December 31, 2006. As of January 31, 2005, the Company has awarded approximately 3.4 million stock options and approximately $230,000 in LTIP Awards, including approximately $24,000 in LTIP Awards granted in January 2005. If the performance hurdles are achieved, the LTIP Awards will be funded with up to 4 million shares of BlackRock common stock to be surrendered by PNC and distributed to LTIP participants, less income tax withholding. In addition, distributed shares to LTIP participants will include an option to put such distributed shares back to BlackRock at fair market value. BlackRock will fund the remainder of the LTIP Awards with up to $40,000 in cash.

Under the terms of the LTIP, awards fully vest if BlackRock’s average closing stock price is at least $62 for any 3-month period beginning on or after January 1, 2005 and ending on or prior to March 30, 2007. In addition, the vesting of awards is contingent on the participants’ continued employment with the Company for periods ranging from two to five years. An alternative performance hurdle provides for partial vesting of the LTIP based on specific targets for the Company’s earnings growth and relative stock price performance to peers over the term of the LTIP, subject to the authority of the Company’s Compensation Committee to reduce the amount of awards vested under the LTIP.

F-35

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

11. Stock Award and Incentive Plans (continued)

BlackRock, Inc. Long-Term Retention and Incentive Plan (continued)

Due to the recent appreciation of the Company’s stock price above the $62 threshold, the Company’s management has determined that full vesting of LTIP awards is probable and recorded a charge of $104.0 million during the year reflecting LTIP awards earned through December 31, 2004 and related payroll taxes. Based on current level of LTIP awards outstanding and assuming full vesting remains probable, annual expense, during the year ended December 31, 2005 should be approximately $59.4 million.

Employee Stock Purchase Plan

The terms of the ESPP allow eligible employees to purchase shares of the Company’s class A common stock at 85% of the lesser of fair market value on the first or last day of each six-month offering period. Eligible employees may not purchase more than 500 shares of class A common stock in any six-month offering period. In addition, for any calendar year in which the option to purchase shares is outstanding, Section 423 (b)(8) of the Internal Revenue Code restricts an ESPP participant from purchasing more than $25 worth of class A common stock based on its fair market value. Prior to January 1, 2003, no charge to earnings was recorded with respect to the ESPP. Effective January 1, 2003, the Company adopted the fair value method for measuring compensation cost related to stock options pursuant to SFAS No. 123, as amended, and incurred ESPP-related compensation expense of approximately $824 and $624 during the years ended December 31, 2004 and 2003, respectively. A total of 1,250,000 shares of class A common stock are available for issuance under the ESPP. The number of shares issued at December 31, 2004 and estimated to be issued pursuant to the ESPP for the offering period ending February 1, 2005 is approximately 265,000.

Fair Value Disclosures

The fair value of option grants and ESPP shares are estimated using the Black-Scholes option-pricing model with the following assumptions for the years ended December 31, 2004, 2003 and 2002, respectively:

	2004	2003	2002
Expected dividend yield	1.60% to 1.72%	0.00%	0.00%
Expected volatility	21.97% to 22.45%	18.76% to 24.63%	16.13% to 33.85%
Risk-free interest	1.00% to 1.74%	1.03% to 1.2%	1.69% to 1.76%
Expected term	6 months	8 years	8 years

F-36

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

11. Stock Award and Incentive Plans (continued)

Fair Value Disclosures (continued)

The fair value of ESPP shares granted during 2003 was measured on February 1, 2003 and August 1, 2003, the commencement of each grant’s offering period. The Company’s first dividend was not declared until August 18, 2003. Therefore, the Company’s estimated dividend yield, as used in the Black-Scholes option-pricing model, remained at 0% during 2003.

The weighted-average fair value of the options granted and ESPP shares in 2004, 2003 and 2002 was $12.65, $9.82 and $15.04 per share, respectively.

Deferred Compensation Plan

The Company has a Long-term Deferred Compensation Plan (the “Plan”) to provide a competitive long-term incentive for key officers and employees. The awards vested through 2004 and were expensed on a straight-line method over the respective vesting periods. Compensation expense (reversal of prior period expense) under the Plan for the years ended December 31, 2004, 2003 and 2002 was $0, ($1,821) and $2,396, respectively. There were no outstanding awards under the Plan at December 31, 2004.

12. Related Party Transactions

The Company and its consolidated subsidiaries provide investment advisory and administration services to the BlackRock Funds, the BlackRock Liquidity Funds, the BlackRock Closed-end Funds and other commingled funds.

Revenues for services provided to these mutual funds including amounts earned from PNC-related accounts are as follows:

	Year ended December 31,
	2004		2003		2002
Investment advisory and administration fees:
BlackRock Funds:
PNC	$	32,259	$	39,771	$	58,145
Other		37,807		29,590		25,502
BlackRock Closed-end Funds - Other		71,443		52,685		41,591
BlackRock Liquidity Funds
PNC		14,028		13,131		14,203
Other*		64,237		69,904		71,912
STIF - PNC		1,034		1,055		861
	$	220,808	$	206,136	$	212,214

* Includes the International Dollar Reserve Fund I, Ltd., a Cayman Islands open-ended limited liability company.

F-37

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

12. Related Party Transactions (continued)

The Company provides investment advisory and administration services to certain PNC subsidiaries, Nomura Asset Management Co., Ltd. (“Nomura”), a strategic joint venture partner, and affiliates of Nomura, for a fee, based on assets under management. In addition, the Company provides risk management and private client services to PNC.

Revenues for such services are as follows:

	Year ended December 31,
	2004		2003		2002
Separate accounts - Nomura	$	9,594	$	13,021	$	10,856
Separate accounts - PNC		6,648		7,585		5,883
Private Client Services - PNC		5,525		5,525		5,525
Other income-risk management - PNC		5,000		5,000		5,000
	$	26,767	$	31,131	$	27,264

Total revenue earned by BlackRock for providing asset management and other services to PNC subsidiaries or PNC-related accounts for the years ended December 31, 2004, 2003 and 2002 totaled $64,494, $72,067 and $89,617, respectively.

The Company has entered into various memoranda of understanding and co-administration agreements with affiliates of PNC pursuant to which the Company pays service fees for PNC Advisors’ (PNC’s wealth management business) clients invested in the BlackRock Funds.

PNC provides general and administration services to the Company. Charges for such services were based on actual usage or on defined formulas which, in management’s view, resulted in reasonable allocations. Additionally, the Company has entered into subadvisory and consulting agreements with Nomura and an entity whose President and Chief Executive Officer serves on the Company’s Board of Directors.

Aggregate expenses included in the consolidated financial statements for transactions with related parties are as follows:

	Year ended December 31,
	2004		2003		2002
Fund administration and servicing costs	$	18,342	$	26,949	$	40,304
General and administration		4,346		5,773		6,397
General and administration-consulting		4,571		1,447		1,616
	$	27,259	$	34,169	$	48,317

F-38

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

12. Related Party Transactions (continued)

PNC and BlackRock have entered into a share surrender agreement whereby PNC will fund up to $200,000 in LTIP awards with up to 4 million shares of BlackRock common stock. Shares attributable to value in excess of PNC’s LTIP funding requirement will be available to support the Company’s future long-term retention and incentive programs but are not subject to surrender by PNC until the programs are approved by the Compensation Committee of the Company’s Board of Directors. Based on the Company’s closing stock price on December 31, 2004 and assuming full vesting remains probable, approximately 1.4 million shares of BlackRock common stock will be available for future programs.

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

Included in accounts receivable is approximately $2,983 and $9,828 at December 31, 2004 and 2003, respectively, which primarily represents investment advisory and administration services provided to Nomura and PNC subsidiaries and affiliates.

Receivable from affiliates was $12,190 and $81 at December 31, 2004 and 2003, respectively. These amounts primarily represent deferred income taxes.

Payable to affiliates was $3,632 and $40,668 at December 31, 2004 and 2003, respectively. These amounts primarily represent income taxes payable at 2003 and fund administration and servicing costs-affiliates payable in both years and are non-interest bearing.

13. Net Capital Requirements

As a registered broker-dealer, BII 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, 2004 and 2003, BII’s net capital was $6,171 and $4,709 in excess of regulatory requirements, respectively.

F-39

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

14. Common Stock

BlackRock’s class A, $0.01 par value, common shares authorized was 250,000,000 shares at December 31, 2004 and 2003. BlackRock’s class B, $0.01 par value, common shares authorized was 10,000,000 shares at December 31, 2004 and 2003. Holders of class A common stock have one vote per share and holders of class B common stock have five votes per share on all stockholder matters affecting both classes.

The Company’s common shares issued and outstanding and related activity consist of the following:

	Shares issued							Shares outstanding
	Common shares Class			Treasury shares Class				Class
	A	B		A		B		A		B
January 1, 2002	15,916,944	48,674,607		—		(125,633	)	15,916,944		48,548,974
Conversion of class B stock to class A stock	1,035,424	(1,098,873	)	63,449		(16,607	)	1,098,873		(1,115,480	)
Issuance of class A common stock	648,471	—		—		—		648,471		—
Issuance of class B common stock	—	53,639		—		—		—		53,639
Treasury stock transactions	5,962	—		(102,163	)	(139,041	)	(96,201	)	(139,041	)
December 31, 2002	17,606,801	47,629,373		(38,714	)	(281,281	)	17,568,087		47,348,092
Conversion of class B stock to class A stock	1,144,059	(1,508,636	)	364,577		—		1,508,636		(1,508,636	)
Issuance of class A common stock	493,018	—		525,015		—		1,018,033		—
Treasury stock transactions	—	—		(1,804,945	)	(32,345	)	(1,804,945	)	(32,345	)
December 31, 2003	19,243,878	46,120,737		(954,067	)	(313,626	)	18,289,811		45,807,111
Conversion of class B stock to class A stock	—	(621,227	)	621,197		—		621,197		(621,227	)
Issuance of class A common stock	—	—		525,508		—		525,508		—
Treasury stock transactions	—	—		(463,636	)	(493,041	)	(463,636	)	(493,041	)
December 31, 2004	19,243,878	45,499,510		(270,998	)	(806,667	)	18,972,880		44,692,843

During the years ended December 31, 2004 and 2003, the Company paid dividends of $1.00 per share, or $63,660, and $0.40 per share, or $25,614, respectively. As a consolidated subsidiary of PNC, federal restrictions on the payment of dividends by PNC might be applied to BlackRock. The Board of Governors of the Federal Reserve System (FRB), the primary regulatory body governing PNC, is authorized to determine that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. In addition, FRB policy discourages the payment of dividends by a bank holding company that are not supported by current operating earnings.

F-40

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

15. Income Taxes

PNC and BlackRock have entered into a tax disaffiliation agreement that sets forth each party’s rights and obligations with respect to income tax payments and refunds and addresses related matters such as the filing of tax returns and the conduct of audits or other proceedings involving claims made by taxing authorities.

For the years ended December 31, 2004, 2003 and 2002, BlackRock has filed its own consolidated federal income tax return and has filed selected state and municipal income tax returns separately and selected state and municipal income tax returns with one or more PNC subsidiaries on a combined or unitary basis. When BlackRock is included in a group’s combined or unitary state or municipal income tax filing with PNC subsidiaries, BlackRock’s share of the liability generally will 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.

The American Jobs Creation Act of 2004 created a one-time opportunity for U.S. companies to repatriate undistributed earnings from foreign subsidiaries at a substantially reduced federal tax rate. The reduced rate is achieved via an 85% dividends received deduction. In the Company’s case foreign earnings must be repatriated by December 31, 2005 in order to qualify for this benefit. The Company has foreign subsidiaries with approximately $30,300 in undistributed earnings that may be available for repatriation. There are a variety of additional technical requirements, related to such factors as the use of the repatriated earnings, which must be considered to take advantage of the reduced tax rate. The Company’s management has begun to evaluate the feasibility of repatriating the undistributed earnings of the Company’s foreign subsidiaries and expects to complete its evaluation by the end of the second quarter of 2005. Under the provisions of Accounting Principles Board Opinion No. 23, “Accounting for Income Taxes – Special Areas,” the Company has not recorded income taxes on the earnings of the foreign subsidiaries. The repatriation of undistributed earnings of foreign subsidiaries could increase the Company’s income tax expense by up to $2,000 during the year ended December 31, 2005.

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

	Year ended December 31,
	2004			2003			2002
Current:
Federal	$	80,631		$	83,711		$	62,613
State and local		11,011			11,865			18,256
Foreign		3,870			1,982			2,777
Release of reserves related to New York State and New York City tax audits		(18,099	)		—			—
Total current		77,413			97,558			83,646
Deferred:
Federal		(18,380	)		(1,920	)		4,202
State and local		(6,769	)		(391	)		2,851
Total deferred		(25,149	)		(2,311	)		7,053
Total	$	52,264		$	95,247		$	90,699

F-41

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

15. Income Taxes (continued)

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities, which are shown net in receivable from affiliates and accounts payable and accrued liabilities-affiliate in the consolidated statements of financial condition, consist of the following:

	December 31,
	2004		2003
Deferred tax assets:
Compensation and benefits	$	71,804	$	28,942
Deferred state income taxes		—		8,913
Deferred revenue		1,321		3,292
Other		5,165		1,769
Gross deferred tax asset		78,290		42,916
Deferred tax liabilities:
Goodwill		39,370		34,990
Depreciation		8,369		3,213
Other		4,311		3,620
Gross deferred tax liability		52,050		41,823
Net deferred tax asset	$	26,240	$	1,093

A reconciliation of income tax expense with expected federal income tax expense computed at the applicable federal income tax rate of 35% is as follows:

	Year ended December 31,
	2004			%		2003			%		2002			%
Expected income tax expense	$	70,153		35.0	%	$	87,816		35.0	%	$	78,382		35.0	%
Increase (decrease) in income taxes resulting from:
Release of reserves related to New York State and New York City tax audits		(18,099	)	(9.0	)		—		—			—		—
Minority interest		(1,761	)	(0.9	)		—		—			—		—
Tax-exempt interest income		(1,479	)	(0.7	)		(1,072	)	(0.4	)		—		—
Other		(1,401	)	(0.7	)		1,250		0.5			(786	)	(0.3	)
Foreign taxes		1,186		0.6			(205	)	(0.1	)		(616	)	(0.3	)
State and local taxes		3,665		1.8			7,458		3.0			13,719		6.1
Income tax expense	$	52,264		26.1	%	$	95,247		38.0	%	$	90,699		40.5	%

F-42

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

16. Comprehensive Income

	Year ended December 31,
	2004			2003		2002
Net income	$	143,141		$	155,402	$	133,249
Other comprehensive income (loss):
Unrealized gain (loss) from investments, available for sale, net of taxes of ($383), $1,443 and $1,243, respectively		(583	)		2,699		2,053
Minimum pension liability adjustment		(177	)		—		—
Foreign currency translation gain		2,987			3,097		1,715
Comprehensive income	$	145,368		$	161,198	$	137,017

17. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Year ended December 31,
	2004		2003		2002
Net income	$	143,141	$	155,402	$	133,249
Basic weighted-average shares outstanding		63,688,955		64,653,352		64,756,290
Dilutive potential shares from forward sales		—		—		53,639
Dilutive potential shares from stock options		2,271,518		1,207,016		497,619
Dilutive weighted-average shares outstanding		65,960,473		65,860,368		65,307,548
Basic earnings per share	$	2.25	$	2.40	$	2.06
Diluted earnings per share	$	2.17	$	2.36	$	2.04

F-43

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

18. Supplemental Statements of Cash Flow Information

Supplemental disclosure of cash flow information:

	Year ended December 31,
	2004		2003		2002
Cash paid for interest	$	574	$	775	$	734
Cash paid for income taxes	$	97,343	$	72,181	$	75,236

Supplemental schedule of noncash transactions:

	Year ended December 31,
	2004		2003		2002
Stock-based compensation	$	0	$	6,093	$	6,321
Reissuance of treasury stock, class A at a discount to its fair market value	$	35,687	$	18,412	$	3,039

19. Subsequent Event

In February 2005, the Company issued $250,000 aggregate principal amount of convertible debentures (the “Debentures”), which will be due in 2035 and bear interest at a rate of 2.625% per annum. The Company used a portion of the net proceeds from this issuance to retire a $150,000 bridge promissory note, the proceeds of which were used to fund a portion of the purchase price for its acquisition of SSR on January 31, 2005, and plans to use the remainder of the net proceeds for general corporate purposes.

Prior to February 15, 2009, the Debentures will be convertible, only under certain conditions, at the option of the holder into cash and, in certain circumstances, shares of the Company’s class A common stock at an initial conversion rate of 9.7282 shares of class A common stock per $1 principal amount of Debentures, subject to adjustments, representing a premium of 32.5% to the last reported sale price of the Company’s class A common stock on February 16, 2005 of $77.58. On and after February 15, 2009, the Debentures will be convertible at any time prior to maturity at the option of the holder into cash and, in certain circumstances, shares of class A common stock at the above initial conversion rate, subject to adjustments.

F-44

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

19. Subsequent Event (continued)

Beginning February 20, 2010, the Company may redeem any of the Debentures at a redemption price of 100% of their principal amount, plus accrued and unpaid interest, including contingent interest and accrued and unpaid liquidated damages, if any. Holders may require the Company to repurchase the Debentures at a repurchase price equal to 100% of their principal amount plus accrued and unpaid interest, including contingent interest and accrued and unpaid liquidated damages, if any, on February 15, 2010, 2015, 2020, 2025 and 2030, or at any time prior to their maturity upon the occurrence of certain events.

F-45

BlackRock, Inc.

Notes to the Consolidated Financial Statements (continued)

20. Selected Quarterly Financial Data (unaudited):

	Quarter
	1st		2nd		3rd (a)			4th		Total
2004
Revenue	$	181,823	$	183,812	$	170,999		$	188,677	$	725,311
Operating income (loss)		69,767		62,581		(22,376	)		55,826		165,798
Net income (loss)		55,207		47,996		(9,814	)		49,752		143,141
Earnings (loss) per share:
Basic	$	0.87	$	0.75		($0.15	)	$	0.78	$	2.25
Diluted	$	0.84	$	0.73		($0.15	)	$	0.75	$	2.17
Weighted-average shares outstanding:
Basic		63,775,783		63,647,316		63,676,776			63,676,069		63,688,955
Diluted		65,807,605		65,766,979		63,676,776			66,229,527		65,960,473
Dividend Paid Per Share	$	0.25	$	0.25	$	0.25		$	0.25	$	1.00
Common stock price per share:
High	$	62.34	$	66.93	$	76.00		$	78.24	$	78.24
Low	$	53.03	$	57.80	$	60.66		$	68.83	$	53.03
Close	$	61.17	$	63.83	$	73.49		$	77.26	$	77.26
2003
Revenue	$	142,751	$	143,906	$	150,344		$	161,211	$	598,212
Operating income		54,066		54,802		57,654			61,754		228,276
Net income		35,320		38,674		40,053			41,355		155,402
Earnings per share:
Basic	$	0.54	$	0.59	$	0.62		$	0.65	$	2.40
Diluted	$	0.54	$	0.58	$	0.61		$	0.63	$	2.36
Weighted-average shares outstanding:
Basic		65,056,537		65,028,337		64,497,117			64,072,629		64,653,352
Diluted		65,867,032		66,164,326		65,692,272			65,634,589		65,860,368
Dividend Paid Per Share		—		—	$	0.20		$	0.20	$	0.40
Common stock price per share:
High	$	45.40	$	48.56	$	52.35		$	53.63	$	53.63
Low	$	39.58	$	43.20	$	43.60		$	48.73	$	39.58
Close	$	43.54	$	45.04	$	49.00		$	53.11	$	53.11

(a) In December 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretion ("FIN") 46 (revised December 2003), Consolidation of Variable Interest Entities ("FIN 46R"), which revised the conceptual framework for determining which party holds a controlling interest in a variable interest entity. Under previous guidance, the Company's management had determined that the Company was the primary beneficiary of six collaterized debt obligations ("CDO") and had consolidated the results of operations, financial position and cash flow for these entites during the three months ended September 30, 2003. Under guidance set forth in FIN 46R, the Company's management determined that the Company was not the primary beneficiary of the CDOs and elected to reflect its deconsolidation of the CDOs through a restatement of previously reported financial results. Certain reclassifications were made to BlackRock's third quarter 2003 results to conform with the current financial statement presentation. The impact of the deconsolidation of the CDO's was immaterial to BlackRock's results of operations for the three months ended September 30, 2003.

F-46

EXHIBIT INDEX

Exhibit No.	Description
3.1(1)	Amended and Restated Certificate of Incorporation of the Registrant.
3.2(8)	Amended and Restated Bylaws of the Registrant.
3.3(8)	Amendment No. 1 to the Amended and Restated Bylaws of the Registrant.
3.4(8)	Amendment No. 2 to the Amended and Restated Bylaws of the Registrant.
4.1(1)	Specimen of Common Stock Certificate (per class).
4.2(1)	Amended and Restated Stockholders Agreement, dated September 30, 1999, by and among the Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.
4.3(9)	Amendment No. 1 to the Amended and Restated Stockholders Agreement, dated October 10, 2002, by and among the Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.
4.4	Indenture, dated as of February 23, 2005, between the Registrant and JPMorgan Chase Bank, N.A., as trustee, relating to the 2.625% Convertible Debentures due 2035.
4.5	Form of 2.625% Convertible Debenture due 2035 (included as Exhibit A to Exhibit 4.4)
10.1(1)	Tax Disaffiliation Agreement, dated October 6, 1999, among BlackRock Inc., PNC Asset Management, Inc. and The PNC Financial Services Group, Inc., formerly PNC Bank Corp.
10.2(1)	1999 Stock Award and Incentive Plan. +
10.4(1)	Nonemployee Directors Stock Compensation Plan. +
10.5(1)	Initial Public Offering Agreement, dated September 30, 1999, among the Registrant, The PNC Financial Services Group, Inc., formerly PNC Bank Corp. and PNC Asset Management, Inc.
10.6(1)	Registration Rights Agreement, dated October 6, 1999, among the Registrant, PNC Asset Management, Inc. and certain holders of class B common stock of the Registrant.
10.7(1)	Services Agreement, dated October 6, 1999, between the Registrant and The PNC Financial Services Group, Inc., formerly PNC Bank Corp.
10.8(2)	BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan. +
10.9(2)	BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan. +
10.10(3)	Agreement of Lease, dated May 3, 2000, between 40 East 52nd Street L.P. and the Registrant.
10.11(4)	Amendment No. 1 to the 1999 Stock Award and Incentive Plan. +
10.12(4)	Amendment No. 1 to the BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan. +
10.13(4)	Amendment No. 1 to the BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan. +
10.14(5)	Agreement of Lease, dated September 4, 2001, between 40 East 52nd Street L.P. and the Registrant.
10.15(6)	BlackRock, Inc. 2001 Employee Stock Purchase Plan. +
10.16(11)	Amended and Restated BlackRock, Inc. Voluntary Deferred Compensation Plan. +
10.17(11)	Amended and Restated BlackRock, Inc. Involuntary Deferred Compensation Plan. +
10.18(7)	Amendment No. 2 to the BlackRock, Inc. 1999 Stock Award and Incentive Plan. +
10.19(9)	BlackRock, Inc. 2002 Long Term Retention and Incentive Plan. +

EXHIBIT INDEX (continued)

Exhibit No.	Description
10.20(9)	Share Surrender Agreement, dated October 10, 2002, among the Registrant, PNC Asset Management, Inc., and The PNC Financial Services Group, Inc.
10.21(9)	Employment Agreement, between the Registrant and Laurence D. Fink, dated October 10, 2002. +
10.22(9)	Amendment No. 1 to the Initial Public Offering Agreement, dated October 10, 2002, among The PNC Financial Services Group, Inc., PNC Asset Management, Inc. and the Registrant.
10.23(9)	Amendment No. 1 to the Registration Rights Agreement, dated October 10, 2002, among the Registrant, PNC Asset Management, Inc. and certain holders of class B common stock of the Registrant.
10.24(11)	Amended and Restated 1999 Annual Incentive Performance Plan. +
10.29(14)	First Amendment to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan. +
10.30(15)	Agreement of Lease, dated July 29, 2004, between Park Avenue Plaza Company L.P. and the Registrant.
10.31(15)	Letter Agreement, dated July 29, 2004, amending the Agreement of Lease between Park Avenue Plaza Company L.P. and the Registrant.
10.32(16)	Stock Purchase Agreement among MetLife, Inc., Metropolitan Life Insurance Company, SSRM Holdings, Inc. BlackRock, Inc. and BlackRock Financial Management, Inc., dated August 25, 2004.
10.33(17)	Form of Restricted Stock Agreement under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.
10.34(17)	Form of BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan Award Agreement. +
10.35(18)	Bridge Promissory Note between Morgan Stanley Senior Funding, Inc. and BlackRock, Inc., dated January 28, 2005
10.36	Purchase Agreement, dated February 16, 2005, between the Registrant and Morgan Stanley & Co., Inc., as representative of the initial purchasers named therein.
10.37	Second Amendment to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan.
10.38	Registration Rights Agreement, dated as of February 23, 2005, between the Registrant and Morgan Stanley & Co. Incorporated, as representatives of the initial purchases named therein, relating to the 2.625% Convertible Debentures due 2035.
21.1	Subsidiaries of the Registrant.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1	Section 302 Certification of Chief Executive Officer.
31.2	Section 302 Certification of Chief Financial Officer.
32.1	Section 906 Certification of Chief Executive Officer and Chief Financial Officer.

(1) Incorporated by Reference to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-78367), as amended, originally filed with the Securities and Exchange Commission on May 13, 1999.

(2) Incorporated by Reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-32406), originally filed with the Securities and Exchange Commission on March 14, 2000.

(3) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2000.

(4) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2000.

(5) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2001.

EXHIBIT INDEX (continued)

(6) Incorporated by Reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-68670), originally filed with the Securities and Exchange Commission on August 30, 2001.

(7) Incorporated by Reference to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-68666), originally filed with the Securities and Exchange Commission on August 30, 2001.

(8) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2003.

(9) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2002.

(10) Incorporated by reference to The PNC Financial Services Group, Inc.’s Annual Report on Form 10-K (Commission File No. 001-9718) for the year ended December 31, 2002.

(11) Incorporated by reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-15305) for the year ended December 31, 2002.

(12) Incorporated by reference to the PNC Financial Services Group, Inc.’s Annual Report on Form 10-K (Commission File No. 001-9718) for the year ended December 31, 2003.

(13) Incorporated by reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-15305) for the year ended December 31, 2003.

(14) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2004.

(15) Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2004.

(16) Incorporated by Reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K (Commission File No. 001-15305) filed on August 30, 2004.

(17) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-15305) for the quarter ended September 30, 2004.

(18) Incorporated by Reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K (Commission File No. 001-15305) filed on January 31, 2005.

+ Denotes compensatory plans.

EX-4.4

Exhibit 4.4

CONFORMED COPY

BLACKROCK, INC.

as Issuer

AND

JPMORGAN CHASE BANK, N.A.

as Trustee

INDENTURE

Dated as of February 23, 2005

2.625% Convertible Debentures due 2035

TABLE OF CONTENTS

	PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions	1
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES
Section 2.01. Designation, Amount and Issue of Debentures	14
Section 2.02. Form of Debentures	15
Section 2.03. Date and Denomination of Debentures; Payments of Interest	16
Section 2.04. Date and Denomination of Debentures; Payments of Liquidated Damages	17
Section 2.05. Execution of Debentures	18
Section 2.06. Exchange and Registration of Transfer of Debentures; Restrictions on Transfer; Depositary	18
Section 2.07. Mutilated, Destroyed, Lost or Stolen Debentures	25
Section 2.08. Temporary Debentures	26
Section 2.09. Cancellation of Debentures Paid, Etc.	27
Section 2.10. CUSIP Numbers	27
ARTICLE 3
REDEMPTION OF DEBENTURES
Section 3.01. Company’s Right to Redeem; Notices to Trustee	27
Section 3.02. Selection of Debentures to Be Redeemed	28
Section 3.03. Notice of Redemption	28
Section 3.04. Effect of Notice of Redemption	29
Section 3.05. Deposit of Redemption Price	29
Section 3.06. Debentures Redeemed in Part	30
Section 3.07. No Redemption Upon Acceleration	30
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest	30
Section 4.02. Payment of Contingent Interest	31
Section 4.03. Contingent Interest Notification	31

i

	PAGE
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal, Premium, Interest and Liquidated Damages	31
Section 5.02. Maintenance of Office or Agency	32
Section 5.03. Appointments to Fill Vacancies in Trustee’s Office	33
Section 5.04. Provisions as to Paying Agent	33
Section 5.05. Existence	34
Section 5.06. Rule 144A Information Requirement	34
Section 5.07. Stay, Extension and Usury Laws	35
Section 5.08. Compliance Certificate	35
Section 5.09. Liquidated Damages	35
Section 5.10. Further Instruments and Acts	35
Section 5.11. Calculation of Tax Original Issue Discount	35
Section 5.12. Resale Of The Debentures	36
ARTICLE 6
LISTS OF DEBENTUREHOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Lists of Debentureholders	36
Section 6.02. Preservation and Disclosure of Lists	36
Section 6.03. Reports by Trustee	37
Section 6.04. Reports by Company	37
ARTICLE 7
DEFAULTS AND REMEDIES
Section 7.01. Events of Default	37
Section 7.02. Payments of Debentures on Default; Suit Therefor	40
Section 7.03. Application of Monies Collected by Trustee	42
Section 7.04. Proceedings by Debentureholders	43
Section 7.05. Proceedings by Trustee	44
Section 7.06. Remedies Cumulative and Continuing	44
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders	44
Section 7.08. Notice of Defaults	45
Section 7.09. Undertaking to Pay Costs	45
ARTICLE 8
CONCERNING THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee	46
Section 8.02. Reliance on Documents, Opinions, Etc.	48
Section 8.03. No Responsibility for Recitals, Etc.	49

ii

	PAGE
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures	49
Section 8.05. Monies to Be Held in Trust	49
Section 8.06. Compensation and Expenses of Trustee	49
Section 8.07. Officers’ Certificate as Evidence	50
Section 8.08. Conflicting Interests of Trustee	51
Section 8.09. Eligibility of Trustee	51
Section 8.10. Resignation or Removal of Trustee	51
Section 8.11. Acceptance by Successor Trustee	52
Section 8.12. Succession by Merger, Etc.	53
Section 8.13. Limitation on Rights of Trustee as Creditor	54
Section 8.14. Trustee’s Application for Instructions from the Company	54
ARTICLE 9
CONCERNING THE DEBENTUREHOLDERS
Section 9.01. Action by Debentureholders	54
Section 9.02. Proof of Execution by Debentureholders	55
Section 9.03. Who Are Deemed Absolute Owners	55
Section 9.04. Company-Owned Debentures Disregarded	55
Section 9.05. Revocation of Consents; Future Holders Bound	56
ARTICLE 10
DEBENTUREHOLDERS’ MEETINGS
Section 10.01. Purpose of Meetings	56
Section 10.02. Call of Meetings by Trustee	57
Section 10.03. Call of Meetings by Company or Debentureholders	57
Section 10.04. Qualifications for Voting	57
Section 10.05. Regulations	58
Section 10.06. Voting	58
Section 10.07. No Delay of Rights by Meeting	59
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Debentureholders	59
Section 11.02. Supplemental Indentures With Consent of Debentureholders	61
Section 11.03. Effect of Supplemental Indentures	62
Section 11.04. Notation on Debentures	62
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee	62

iii

	PAGE
.ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate, Etc. on Certain Terms	63
Section 12.02. Successor Corporation to Be Substituted	63
Section 12.03. Opinion of Counsel to Be Given Trustee	64
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture	64
Section 13.02. Deposited Monies to Be Held in Trust by Trustee	65
Section 13.03. Paying Agent to Repay Monies Held	65
Section 13.04. Return of Unclaimed Monies	65
Section 13.05. Reinstatement	66
ARTICLE 14
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Debentures Solely Corporate Obligations	66
ARTICLE 15
CONVERSION OF DEBENTURES
Section 15.01. Conversion Privilege	67
Section 15.02. Conversion Procedure	71
Section 15.03. Adjustment of Conversion Rate	74
Section 15.04. Shares to Be Fully Paid	85
Section 15.05. Effect of Reclassification, Consolidation, Merger or Sale	85
Section 15.06. Certain Covenants	89
Section 15.07. Responsibility of Trustee	89
Section 15.08. Notice to Holders Prior to Certain Actions	90
Section 15.09. Shareholder Rights Plans	91
ARTICLE 16
REPURCHASE OF DEBENTURES AT OPTION OF HOLDERS
Section 16.01. Repurchase at Option of Holders	91
Section 16.02. Repurchase at Option of Holders Upon a Designated Event	93
Section 16.03. Withdrawal of Repurchase Notice or Designated Event Repurchase Notice	96
Section 16.04. Deposit of Repurchase Price or Designated Event Repurchase Price	96
Section 16.05. Covenant to Comply with Securities Laws	97

iv

	PAGE
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding on Company’s Successors	97
Section 17.02. Official Acts by Successor Corporation	98
Section 17.03. Addresses for Notices, Etc.	98
Section 17.04. Governing Law	98
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates to Trustee	98
Section 17.06. Legal Holidays	99
Section 17.07. No Security Interest Created	99
Section 17.08. Trust Indenture Act	99
Section 17.09. Benefits of Indenture	99
Section 17.10. Table of Contents, Headings, Etc.	100
Section 17.11. Authenticating Agent	100
Section 17.12. Execution in Counterparts	101
Section 17.13. Tax Treatment of the Debentures	101

Exhibit A	Form of Debenture
Exhibit B	Form of Conversion Notice
Exhibit C	Form of Option to Elect Repayment Upon a Designated Event
Exhibit D	Form of Option to Elect Repayment on a Repurchase Date
Exhibit E	Form of Assignment and Transfer
Schedule A	Table of Additional Shares
Schedule B	Schedule of Changes to Principal Amount

v

INDENTURE dated as of February 23, 2005 between BlackRock, Inc., a Delaware corporation, as issuer (hereinafter sometimes called the “Company”, as more fully set forth in Section 1.01), and JPMorgan Chase Bank, N.A., a national banking association, as trustee (hereinafter sometimes called the “Trustee”, as more fully set forth in Section 1.01).

W I T N E S S E T H:

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of its 2.625% Convertible Debentures due 2035 (hereinafter sometimes called the “Debentures”), initially in an aggregate principal amount not to exceed $250,000,000, and in order to provide the terms and conditions upon which the Debentures are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and

WHEREAS, the Debentures, the certificate of authentication to be borne by the Debentures, a form of assignment, a form of option to elect repayment upon a Designated Event (as defined herein), a form of option to elect repayment on a Repurchase Date (as defined herein), a form of conversion notice and certificate of transfer to be borne by the Debentures are to be substantially in the forms hereinafter provided for; and

WHEREAS, all acts and things necessary to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and to constitute these presents a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Debentures have in all respects been duly authorized.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to declare the terms and conditions upon which the Debentures are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Debentures by the holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Debentures (except as otherwise provided below), as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions.

(a) The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of

this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture, which are defined in the Trust Indenture Act or which are by reference therein defined in the Securities Act (except as herein otherwise expressly provided or unless the context otherwise requires) shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this Indenture. The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subdivision. The terms defined in this Article include the plural as well as the singular.

“Accepted Purchased Shares” The term “Accepted Purchased Shares” shall have the meaning specified in Section 15.03(g)(i).

“Acquisition Value” The term “Acquisition Value” of the Common Stock means, for each Trading Day in the Valuation Period with respect to a Public Acquirer Change of Control, the value of the consideration paid per share of Common Stock in connection with such Public Acquirer Change of Control, as follows: (i) for any cash, 100% of the face amount of such cash; (ii) for any Acquirer Common Stock, 100% of the Last Reported Sale Price of such Acquirer Common Stock on each such Trading Day; and (iii) for any other securities, assets or property, 102% of the fair market value of such security, asset or property on each such Trading Day, as determined by two independent nationally recognized investment banks selected by the Trustee for this purpose.

“Additional Shares” The term “Additional Shares” shall have the meaning specified in Section 15.01(d)(ii).

“Adjustment Determination Date” The term “Adjustment Determination Date” shall have the meaning specified in Section 15.03(m).

“Adjustment Event” The term “Adjustment Event” shall have the meaning specified in Section 15.03(m).

“Affiliate” The term “Affiliate” of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, “control,” when used with respect to any specified person means the power to direct or cause the direction of the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Board of Directors” The term “Board of Directors” means the Board of Directors of the Company or a committee of such Board duly authorized to act for it hereunder.

2

“Board Resolution” The term “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, or duly authorized committee thereof (to the extent permitted by applicable law), and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” The term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking institutions in The City of New York or the city in which the Corporate Trust Office is located are authorized or obligated by law or executive order to close or be closed.

“Capital Stock” The term “Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

“Change of Control” The term “Change of Control” means the occurrence after the original issuance of the Debentures of any of the following events:

(i) any Person acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of (A) shares of Class A Common Stock entitling that Person to exercise 50% or more of the total voting power of all shares of the Class A Common Stock that are entitled to vote generally in elections of directors; or (B) shares of the Capital Stock entitling that Person to exercise 50% (or 90% if such Person is The PNC Financial Services Group, Inc., or any of its Affiliates) or more of the total voting power of all shares of the Class A Common Stock that are entitled to vote generally in elections of directors; or

(ii) any transaction or event or any series of transactions or events (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization, asset sale, lease of assets or otherwise) in connection with which all or substantially all of the Class A Common Stock not beneficially owned by PNC Financial Services Group, Inc. or any of its Affiliates is exchanged for, converted into, acquired for or constitutes solely the right to receive stock, other securities, other property, assets or cash, other than any transaction or series of transactions: (A) that does not result in any reclassification, conversion, exchange or cancellation of the outstanding shares of Class A Common Stock (other than the cancellation of any of the outstanding shares of Class A Common Stock held by the Person with whom the Company mergers or consolidates), or (B) pursuant to which the holders of Class A Common Stock immediately prior to the transaction

3

have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of Capital Stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after the transaction, or (C) that is effected solely to change the Company’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity; or

(iii) the first day on which a majority of the members of the Board of Directors are not Continuing Directors.

Notwithstanding the foregoing definition, a Change of Control shall not be deemed to have occurred under clause (ii) above if at least 90% of the consideration (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in a transaction otherwise constituting a Change of Control under clause (ii) above consists of shares of common stock traded on a national securities exchange or quoted on the Nasdaq National Market (or will be so traded or quoted immediately following the transaction) and as a result of the transaction the Debentures become convertible into such common stock or into consideration based on the value of such common stock.

For purposes of this definition, whether a Person is a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the Exchange Act and “Person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

“Class A Common Stock” The term “Class A Common Stock” shall mean shares of the class designated as class A common stock of the Company, par value $0.01 per share, at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and that have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and that are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

“close of business” The term “close of business” means 5 p.m. (New York City time).

“Commission” The term “Commission” shall mean the Securities and Exchange Commission.

4

“Common Stock” The term “Common Stock” shall mean any stock of any class of the Company that has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and that is not subject to redemption by the Company. Subject to the provisions of Section 15.05, however, shares issuable on conversion of Debentures shall include only shares of Class A Common Stock.

“Company” The term “Company” shall mean BlackRock, Inc., a Delaware corporation, and subject to the provisions of Article 12, shall include its successors and assigns.

“Company Notice” The term “Company Notice” shall have the meaning specified in Section 16.01(a).

“Contingent Interest” The term “Contingent Interest” means interest that accrues and is payable as provided in Article 4.

“Continuing Directors” The term “Continuing Directors” means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors as of February 16, 2005 or (b) who becomes a member of the Board of Directors subsequent to that date and whose appointment, election or nomination for election by shareholders is duly approved by a majority of the Continuing Directors on the Board of Directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Company on behalf of the Board of Directors in which such individual is named as nominee for director.

“Conversion Agent” The term “Conversion Agent” shall have the meaning specified in Section 5.02.

“Conversion Date” The term “Conversion Date” shall have the meaning specified in Section 15.02(d).

“Conversion Obligation” The term “Conversion Obligation” shall have the meaning specified in Section 15.01(a).

“Conversion Price” The term “Conversion Price” means as of any date $1,000 divided by the Conversion Rate as of such date.

“Conversion Rate” The term “Conversion Rate” shall have the meaning specified in Section 15.01(a).

“Conversion Settlement Date” The term “Conversion Settlement Date” shall have the meaning specified in Section 15.02(d).

5

“Conversion Value” The term “Conversion Value” shall have the meaning specified in Section 15.02(a).

“Corporate Trust Office” The term “Corporate Trust Office,” or other similar term, shall mean the principal corporate trust office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office is, at the date as of which this Indenture is dated, located at JPMorgan Chase Bank, N.A., 4 New York Plaza, New York, New York 10004, Attention: Institutional Trust Services (BlackRock, Inc. 2.625% Convertible Debentures due 2035).

“Current Market Price” The term “Current Market Price” means, in respect of shares of Class A Common Stock on any day and in respect of an issuance or distribution on the Class A Common Stock, the average of the Last Reported Sale Prices per share of Class A Common Stock or the security issued or distributed on the Class A Common Stock for each of the ten consecutive Trading Days ending on the earlier of the day in question and the day before the “Ex-Dividend Date” with respect to such issuance or distribution requiring such computation.

“Custodian” The term “Custodian” means JPMorgan Chase Bank, N.A., as custodian for The Depository Trust Company, with respect to the Debentures in global form, or any successor entity thereto.

“Debenture” or “Debentures” The terms “Debenture” or “Debentures” shall mean any Debenture or Debentures, as the case may be, authenticated and delivered under this Indenture.

“Debentureholder” or “holder” The terms “Debentureholder” or “holder” as applied to any Debenture, or other similar terms (but excluding the term “beneficial holder”), shall mean any person in whose name at the time a particular Debenture is registered on the Debenture register.

“Debenture registrar” The term “Debenture registrar” shall have the meaning specified in Section 2.06(a).

“Debenture register” The term “Debenture register” shall have the meaning specified in Section 2.06(a).

“Default” The term “Default” shall mean any event that is, or after notice or passage of time, or both, would be, an Event of Default.

“Depositary” The term “Depositary” means, with respect to the Debentures issuable or issued in whole or in part in global form, the person specified in Section 2.06(d) as the Depositary with respect to such Debentures, until a successor shall have been appointed and become such pursuant to the

6

applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.

“Designated Event” The term “Designated Event” means the occurrence of (a) a Change of Control or (b) a Termination of Trading.

“Designated Event Expiration Time” The term “Designated Event Expiration Time” shall have the meaning specified in Section 16.02(b).

“Designated Event Notice” The term “Designated Event Notice” shall have the meaning specified in Section 16.02(b).

“Designated Event Repurchase Date” The term “Designated Event Repurchase Date” shall have the meaning specified in Section 16.02(a).

“Designated Event Repurchase Notice” The term “Designated Event Repurchase Notice” shall have the meaning specified in Section 16.02(a)(i).

“Designated Event Repurchase Price” The term “Designated Event Repurchase Price” shall have the meaning specified in Section 16.02(a).

“Determination Date” The term “Determination Date” shall have the meaning specified in Section 15.02(b).

“Distributed Property” The term “Distributed Property” shall have the meaning specified in Section 15.03(d).

“Dividend Threshold Amount” The term “Dividend Threshold Amount” shall have the meaning specified in Section 15.03(e)

“Effective Date” The term “Effective Date” shall have the meaning specified in Section 15.01(d)(ii).

“Event of Default” The term “Event of Default” means with respect to the Debentures any event specified in Section 7.01, continued for the period of time, if any, and after the giving of notice, if any, therein designated.

“Ex-Dividend Date” The term “Ex-Dividend Date” means, with respect to any issuance or distribution on the Common Stock or any other equity security, the first date on which the shares of Common Stock or such other equity security trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance or distribution.

“Exchange Act” The term “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

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“Exchange Property” The “Exchange Property” shall have the meaning specified in Section 15.05.

“Exchange Property Value” The term “Exchange Property Value” shall have the meaning specified in Section 15.05(c).

“Exchange Property Weighted Average Price” The term “Exchange Property Weighted Average Price” shall have the meaning specified in Section 15.05(c).

“Expiration Time” The term “Expiration Time” shall have the meaning specified in Section 15.03(f).

“Global Debenture” The term “Global Debenture” shall have the meaning specified in Section 2.06(b).

“Indebtedness” The term “Indebtedness” shall mean, with respect to any Person, and without duplication, (a) all indebtedness, obligations and other liabilities (contingent or otherwise) of such Person for borrowed money (including obligations of the Company in respect of overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection agreements, and any loans or advances from banks, whether or not evidenced by Debentures or similar instruments, and all commitment, stand by and other fees due and payable to financial institutions with respect to credit facilities available to such Person) or evidenced by bonds, debentures, Debentures or similar instruments (whether or not the recourse of the lender is to the whole of the assets of such Person or to only a portion thereof) (other than any account payable or other accrued current liability or obligation incurred in the ordinary course of business in connection with the obtaining of materials or services); (b) all reimbursement obligations and other liabilities (contingent or otherwise) of such Person with respect to letters of credit, bank guarantees or bankers’ acceptances; (c) all obligations and liabilities (contingent or otherwise) in respect of leases of real or personal property or other assets of such Person required, in conformity with generally accepted accounting principles, to be accounted for as capitalized lease obligations on the balance sheet of such Person; (d) all direct or indirect guaranties or similar agreements by such Person in respect of, and obligations or liabilities (contingent or otherwise) of such Person to assure a creditor against loss in respect of indebtedness of another Person of the kind described in clauses (a) through (c); (e) any indebtedness described in clauses (a) through (d) secured by any mortgage, pledge, lien or other encumbrance existing on property that is owned or held by such Person, regardless of whether the indebtedness or other obligation secured thereby shall have been assumed by such Person; and (f) any and all deferrals, renewals, extensions and refundings of, or amendments, modifications or supplements to, any indebtedness, obligation or liability of the kind described in clauses (a) through (e).

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“Indenture” The term “Indenture” shall mean this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.

“Initial Purchasers” The term “Initial Purchasers” means Morgan Stanley & Co. Incorporated.

“Last Reported Sale Price” The term “Last Reported Sale Price” of the Class A Common Stock, or any other security for which a Last Reported Sale Price is to be determined, on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and asked prices or, if more than one in either case, the average of the average bid and the average asked prices) on that date as reported in composite transactions for the principal United States securities exchange on which the Class A Common Stock or such other security is traded or, if the Class A Common Stock or such other security is not listed on a United States national or regional securities exchange, as reported by Nasdaq. If the Class A Common Stock or such other security is not listed for trading on a United States national or regional securities exchange and not reported by Nasdaq on the relevant date, the “Last Reported Sale Price” will be the last quoted bid price for the Class A Common Stock or such other security in the over-the-counter market on the relevant date as reported by Pink Sheets LLC or any similar organization. If the Class A Common Stock or such other security is not so quoted, the “Last Reported Sale Price” will be the average of the mid-point of the last bid and asked prices of Class A Common Stock or such other security on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

“Liquidated Damages” The term “Liquidated Damages” means all Liquidated Damages Amounts as defined in the Registration Rights Agreement.

“Measurement Period” The term “Measurement Period” shall have the meaning specified in Section 15.01(a)(i)

“Net Exchange Property Amount” The term “Net Exchange Property Amount” shall have the meaning specified in Section 15.05(d)(ii).

“Net Share Amount” The term “Net Share Amount” shall have the meaning specified in Section 15.02(b)(ii).

“Net Shares” The term “Net Shares” shall have the meaning specified in Section 15.02(b)(ii).

“non-electing share” The term “non-electing share” shall have the meaning specified in Section 15.05(b).

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“Notice of Conversion” The term “Notice of Conversion” shall have the meaning specified in Section 15.02(c).

“Offer Expiration Time” The term “Offer Expiration Time” shall have the meaning specified in Section 15.03(g).

“Officers’ Certificate” The term “Officers’ Certificate,” when used with respect to the Company, shall mean a certificate signed by (a) one of the President, the Chief Executive Officer, any Executive or Senior Vice President, Managing Director or any Vice President (whether or not designated by a number or numbers or word added before or after the title “Vice President”) and (b) by one of the Treasurer or any Assistant Treasurer, Secretary or any Assistant Secretary or Controller of the Company, which is delivered to the Trustee. Each such certificate shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section. One of the officers giving an Officers’ Certificate pursuant to Section 5.08 shall be the principal executive, financial or accounting officer of the Company.

“Opinion of Counsel” The term “Opinion of Counsel” shall mean an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or other counsel acceptable to the Trustee, which is delivered to the Trustee. Each such opinion shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section.

“outstanding” The term “outstanding,” when used with reference to Debentures, shall, subject to the provisions of Section 9.04, mean, as of any particular time, all Debentures authenticated and delivered by the Trustee under this Indenture, except:

(i) Debentures theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

(ii) Debentures, or portions thereof, for the payment repurchase of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);

(iii) Debentures in lieu of which, or in substitution for which, other Debentures shall have been authenticated and delivered pursuant to the terms of Section 2.07 unless proof satisfactory to the Trustee is presented that any such Debentures are held by protected purchasers in due course; and

(iv) Debentures converted pursuant to Article 15.

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“Paying Agent” The term “Paying Agent” shall have the meaning specified in Section 5.02.

“Person” or person The term “person” shall mean an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.

“Portal Market” The term “Portal Market” shall mean The Portal Market operated by the National Association of Securities Dealers, Inc. or any successor thereto.

“Predecessor Debenture” The term “Predecessor Debenture” of any particular Debenture shall mean every previous Debenture evidencing all or a portion of the same debt as that evidenced by such particular Debenture; and, for the purposes of this definition, any Debenture authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the same debt as the lost, destroyed or stolen Debenture that it replaces.

“Principal Return” The term “Principal Return” shall have the meaning specified in Section 15.02(b)(i).

“Public Acquirer Change of Control” means any transaction described in clause (ii) of the definition of Change of Control (disregarding for this purpose the exception set forth in clause (ii)(B) of such definition), where the acquirer, the person formed by or surviving the transaction, or any entity that it is a direct or indirect “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the total voting power of all shares of such acquirer’s or person’s capital stock that are entitled to vote generally in the election of directors has a class of common stock traded on a national securities exchange or quoted on Nasdaq or which will be so traded or quoted when issued or exchanged in connection with such Change of Control; provided that if there is more than one such entity, the relevant entity will be such entity with the most direct beneficial ownership to such acquirer’s or person’s capital stock. Such acquirer’s, person’s or other entity’s class of common stock traded on a national securities exchange or quoted on Nasdaq or which will be so traded or quoted when issued or exchanged in connection with such Change of Control is herein referred to as “Acquirer Common Stock.”

“Purchase Agreement” The term “Purchase Agreement” means that certain Purchase Agreement, dated as of February 16, 2005, between the Company and the Initial Purchasers.

“Purchased Shares” The term “Purchased Shares” shall have the meaning specified in Section 15.03(f)(i).

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“QIB” The term “QIB” shall mean a “qualified institutional buyer” as defined in Rule 144A.

“Record Date” The term “Record Date” shall have the meaning specified in Section 15.03(h)(iii).

“Redemption Date” The term “Redemption Date” means the date specified in a notice of redemption on which the Debentures may be redeemed in accordance with the terms of the Debentures and this Indenture.

“Redemption Price” The term “Redemption Price” shall have the meaning specified in Section 3.01.

“Registration Rights Agreement” The term “Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of February 23, 2005, between the Company and the Initial Purchasers.

“Repurchase Date” The term “Repurchase Date” has the meaning specified in Section 16.01(a).

“Repurchase Notice” The term “Repurchase Notice” has the meaning specified in Section 16.01(a).

“Repurchase Price” The term “Repurchase Price” has the meaning specified in Section 16.01(a).

“Resale Restriction Termination Date” The term “Resale Restriction Termination Date” shall have the meaning specified in Section 2.06(d).

“Responsible Officer” The term “Responsible Officer”, when used with respect to the Trustee, shall mean an officer of the Trustee in the Corporate Trust Office, having direct responsibility for the administration of this Indenture, and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“Restricted Securities” The term “Restricted Securities” has the meaning specified in Section 2.06(d).

“Rule 144A” The term “Rule 144A” shall mean Rule 144A as promulgated under the Securities Act.

“Securities Act” The term “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

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“Stock Price” The term “Stock Price” means the price paid per share of Class A Common Stock in connection with a Change of Control pursuant to which Additional Shares shall be added to the Conversion Rate pursuant to Section 15.01(d) hereof, which shall be equal to (i) if holders of Class A Common Stock receive only cash in such Change of Control, the cash amount paid per share of Class A Common Stock and (ii) in all other cases, the average of the Last Reported Sale Prices of the Class A Common Stock for the ten Trading Days up to but not including the effective date of such Change of Control.

“Subsidiary” The term “Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“Tax Original Issue Discount” The term “Tax Original Issue Discount” means the amount of ordinary interest income on a Debenture that must be accrued as original issue discount for United States federal income tax purposes pursuant to Treasury regulation section 1.1275-4 or any successor provision.

“Ten Day Weighted Average Price” The term “Ten Day Weighted Average Price” shall have the meaning specified in Section 15.02(a)(ii).

“Termination of Trading” A “Termination of Trading” means any time that the Class A Common Stock (or other common stock into which the Debentures are then convertible) is neither listed for trading on a United States national or regional securities exchange nor approved for trading on the Nasdaq National Market.

“Trading Day” The term “Trading Day” means, with respect to the Common Stock or any other securities, a day during which trading in securities generally occurs on the principal United States securities exchange on which the Common Stock or such other security is traded or, if the Common Stock or such other security is not listed on a United States national or regional securities exchange, on Nasdaq. If the Common Stock or such other security is not listed for trading on a United States national or regional securities exchange and not reported by Nasdaq, the term “trading day” will mean a day during which trading in securities generally occurs on the principal market on which Common Stock or such other security is then traded.

“Trading Price” The term “Trading Price” shall have the meaning specified in Section 15.01(a).

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“transfer” The term “transfer” shall have the meaning specified in Section 2.06(d).

“Trigger Event” The term “Trigger Event” shall have the meaning specified in Section 15.03(d).

“Trust Indenture Act” The term “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture, except as provided in Section 11.03 and Section 15.05; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939 as so amended.

“Trustee” The term “Trustee” shall mean JPMorgan Chase Bank, N.A., and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at the time serving as successor trustee hereunder.

“Volume Weighted Average Price” The term “Volume Weighted Average Price” with respect to any share of Class A Common Stock on any Trading Day shall mean the volume weighted average price on the New York Stock Exchange or, if the Class A Common Stock is not listed on the New York Stock Exchange, on the principal Unites States securities exchange or over-the-counter market on which Class A Common Stock is then listed or traded, from 9:30 a.m. to 4:00 p.m. (New York City time) on that Trading Day as displayed by Bloomberg (Bloomberg key-strokes: BLK Equity VAP) (or if such volume weighted average price is not available, the market value of one share of Class A Common Stock on such Trading Day as determined by the Board of Directors in good faith using a volume weighted method).

ARTICLE 2

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES

Section 2.01. Designation, Amount and Issue of Debentures. The Debentures shall be designated as the “2.625% Convertible Debentures due 2035.” Debentures not to exceed the aggregate principal amount of $250,000,000, upon the execution of this Indenture, or (except pursuant to Section 2.06, Section 2.07, Section 15.02 and Section 16.02) from time to time thereafter, may be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Debentures upon the written order of the Company, signed by the Company’s (a) Chief Executive Officer, President, Executive or Senior Vice President, Managing Director or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”) and (b) Treasurer or Assistant

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Treasurer or its Secretary or any Assistant Secretary, without any further action by the Company hereunder, provided, however, that said Debentures may not be executed, delivered or authenticated unless and until the Trustee shall have received an Officers’ Certificate stating that the Debentures are substantially in the form set forth in Exhibit A of the Indenture and an Opinion of Counsel substantially to the effect that the Indenture, to the extent applicable, and Debentures have been duly authorized and, if executed and authenticated in accordance with the provisions of the Indenture and delivered to and duly paid for by the Purchasers thereof on the date of such opinion, would be entitled to the benefits of the Indenture and would be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting creditors’ rights generally, general principles of equity, and such other matters as shall be specified therein; provided further that additional Debentures may be issued in an unlimited aggregate principal amount so long as such Debentures are part of the same issue, within the meaning of Treasury Regulations Sections 1.1275-1(f) and 1.1275-2(k)(2), as the Debentures initially issued hereunder. The Trustee shall be fully protected in relying upon such Officers’ Certificate and Opinion of Counsel.

Section 2.02. Form of Debentures. The Debentures and the Trustee’s certificate of authentication to be borne by such Debentures shall be substantially in the form set forth in Exhibit A, which is incorporated in and made a part of this Indenture.

Any of the Debentures may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Debentures may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Debentures are subject.

The Global Debenture shall represent such of the outstanding Debentures as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Debentures from time to time endorsed thereon and that the aggregate amount of outstanding Debentures represented thereby may from time to time be increased or reduced to reflect redemptions, repurchases, conversions, transfers or exchanges permitted hereby. Any endorsement of the Global Debenture to reflect the amount of any increase or decrease in the amount of outstanding Debentures represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the holder of such Debentures in accordance with this Indenture.

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Payment of principal, accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, and premium, if any (including any Repurchase Price or Designated Event Repurchase Price), on the Global Debenture shall be made to the holder of such Debenture on the date of payment, unless a record date or other means of determining holders eligible to receive payment is provided for herein.

The terms and provisions contained in the form of Debenture attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Section 2.03. Date and Denomination of Debentures; Payments of Interest. The Debentures shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. Each Debenture shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Debenture attached as Exhibit A hereto. Interest on the Debentures shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

The Person in whose name any Debenture (or its Predecessor Debenture) is registered on the Debenture Register at the close of business on any record date with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date. Interest shall be payable at the office of the Company maintained by the Company for such purposes in the Borough of Manhattan, City of New York, which shall initially be an office or agency of the Trustee. The Company shall pay interest (i) on any Debentures in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Debenture Register (or upon written notice by such Person, by wire transfer in immediately available funds, if such Person is entitled to interest on aggregate principal in excess of $2 million) or (ii) on any Global Debenture by wire transfer of immediately available funds to the account of the Depositary or its nominee. The term “record date” with respect to any interest payment date shall mean the February 1 or August 1 preceding the applicable February 15 or August 15 interest payment date, respectively.

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Any interest on any Debenture which is payable, but is not punctually paid or duly provided for, on any February 15 or August 15 (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Debentureholder on the relevant record date by virtue of his having been such Debentureholder, and such Defaulted Interest shall be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Debentures (or their respective Predecessor Debentures) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Debenture and the date of the proposed payment (which shall be not less than twenty-five (25) days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Interest which shall be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment, and not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment. The Company shall promptly notify the Trustee of such special record date and the Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first-class postage prepaid, to each holder at his address as it appears in the Debenture Register, not less than ten (10) days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Debentures (or their respective Predecessor Debentures) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (2) of this Section 2.03.

(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Debentures may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Section 2.04. Date and Denomination of Debentures; Payments of Liquidated Damages. The Debentures shall be issuable in fully registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. Every Debenture shall be dated the date of its authentication and shall pay Liquidated Damages in the manner and to the persons set forth in the Registration Rights Agreement.

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Section 2.05. Execution of Debentures. The Debentures shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chairman or Vice-Chairman of the Board of Directors, Chief Executive Officer, President, any of its Executive or Senior Vice Presidents, Managing Director, or any of its Vice Presidents (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”). Only such Debentures as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Debenture attached as Exhibit A hereto, manually executed by the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.11), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Debenture executed by the Company shall be conclusive evidence that the Debenture so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture.

In case any officer of the Company who shall have signed any of the Debentures shall cease to be such officer before the Debentures so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Debentures nevertheless may be authenticated and delivered or disposed of as though the person who signed such Debentures had not ceased to be such officer of the Company; and any Debenture may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Debenture, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.

Section 2.06. Exchange and Registration of Transfer of Debentures; Restrictions on Transfer; Depositary.

(a) The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office and in any other office or agency of the Company designated pursuant to Section 5.02 being herein sometimes collectively referred to as the “Debenture register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Debentures and of transfers of Debentures. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time. The Trustee is hereby appointed “Debenture registrar” for the purpose of registering Debentures and transfers of Debentures as herein provided. The Company may appoint one or more co-registrars in accordance with Section 5.02.

Upon surrender for registration of transfer of any Debenture to the Debenture registrar or any co-registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.06, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or

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transferees, one or more new Debentures of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

Debentures may be exchanged for other Debentures of any authorized denominations and of a like aggregate principal amount, upon surrender of the Debentures to be exchanged at any such office or agency maintained by the Company pursuant to Section 5.02. Whenever any Debentures are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Debentures which the Debentureholder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

All Debentures presented or surrendered for registration of transfer or for exchange, redemption, repurchase or conversion shall (if so required by the Company, the Trustee, the Debenture registrar or any co-registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Debentureholder thereof or his attorney-in-fact duly authorized in writing.

No service charge shall be charged to the Debentureholder for any exchange or registration of transfer of Debentures, but the Company or the Trustee may require payment of a sum sufficient to cover any tax, assessments or other governmental charges that may be imposed in connection therewith.

None of the Company, the Trustee, the Debenture registrar or any co-registrar shall be required to exchange or register a transfer of (a) any Debentures for a period of thirty (30) days next preceding any selection of Debentures to be redeemed, (b) any Debentures or portions thereof called for redemption pursuant to Section 3.02, (c) any Debentures surrendered for conversion or, if a portion of any Debenture is surrendered for conversion, such portion thereof surrendered for conversion or (d) any Debentures, or a portion of any Debenture, surrendered for repurchase (and not withdrawn) in accordance with Article 16 hereof.

All Debentures issued upon any registration of transfer or exchange of Debentures in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Debentures surrendered upon such registration of transfer or exchange.

(b) So long as the Debentures are eligible for book-entry settlement with the Depositary, unless otherwise required by law, all Debentures shall be represented by a Debenture in global form (a “Global Debenture”) registered in the name of the Depositary or the nominee of the Depositary. The transfer and exchange of beneficial interests in a Global Debenture, which does not involve the issuance of a definitive Debenture, shall be effected through the Depositary

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(but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.

(c) Any Global Debenture may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian, the Depositary or by the National Association of Securities Dealers, Inc. in order for the Debentures to be tradable on The Portal Market or as may be required for the Debentures to be tradable on any other market developed for trading of securities pursuant to Rule 144A or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Debentures may be listed or traded or designated for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Debentures are subject.

(d) Every Debenture that bears or is required under this Section 2.06(d) to bear either of the legends set forth in this Section 2.06(d) (together with any Common Stock issued upon conversion of the Debentures and required to bear either of the legends set forth in Section 2.06(e), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.06(d) (including one of the legends set forth below), unless such restrictions on transfer shall be waived by written consent of the Company, and the holder of each such Restricted Security, by such holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in Section 2.06(d) and Section 2.06(e), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.

Until the date (the “Resale Restriction Termination Date”) that is two (2) years after the last date of original issuance of the Debentures, any certificate evidencing such Debenture (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof which shall bear the legend set forth in Section 2.06(e), if applicable) shall bear a legend in substantially the following form (unless such Debentures have been transferred pursuant to a registration statement that has been declared effective under the Securities Act and which continues to be effective at the time of such transfer, pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

THIS DEBENTURE AND THE SHARES OF BLACKROCK, INC. (THE “COMPANY”) COMMON STOCK (“COMMON STOCK”) ISSUABLE UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

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(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NONE OF THIS DEBENTURE, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE OR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS DEBENTURE, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH DEBENTURE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THIS DEBENTURE (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE DEBENTURES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND THE WITHIN MENTIONED TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF THIS DEBENTURE IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS DEBENTURE COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.

Any Debenture (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of such Debenture for exchange to the Debenture registrar in accordance with the provisions of this Section 2.06, be exchanged for

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a new Debenture or Debentures, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.06(d).

Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.06(d)), a Global Debenture may not be transferred as a whole or in part except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary, provided that a Global Debenture may be exchanged in whole or in part for a definitive Debenture registered in the name of any Person other than the Depositary if (x) any holder of a beneficial interest in such Global Debenture through the Depositary requests to exchange such beneficial interest for a Debenture in registered form, in accordance with customary procedures or (y) the Company determines, in its sole discretion, not to have Debentures represented by a Global Debenture.

The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Debenture. Initially, the Global Debenture shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.

If at any time the Depositary for a Global Debenture notifies the Company that it is unwilling or unable to continue as Depositary for such Debenture, the Company may appoint a successor Depositary with respect to such Debenture. If a successor Depositary for such Global Debenture is not appointed by the Company within ninety (90) days after the Company receives such notice, the Company will execute, and the Trustee, upon receipt of an Officers’ Certificate for the authentication and delivery of Debentures, will authenticate and deliver Debentures in definitive form in an aggregate principal amount equal to the principal amount of such Global Debenture, in exchange for such Global Debenture, and upon delivery of the Global Debenture to the Trustee such Global Debenture shall be canceled.

Definitive Debentures issued in exchange for all or a part of the Global Debenture pursuant to this Section 2.06(d) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such definitive Debentures to the persons in whose names such definitive Debentures are so registered.

At such time as all interests in a Global Debenture have been converted, canceled, repurchased or transferred, such Global Debenture shall be, upon

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receipt thereof, canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Debenture is exchanged for definitive Debentures, converted, canceled, repurchased or transferred to a transferee who receives definitive Debentures therefor or any definitive Debenture is exchanged or transferred for part of such Global Debenture, the principal amount of such Global Debenture shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on such Global Debenture, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase.

(e) Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of such Debenture shall bear a legend in substantially the following form (unless the Debenture or such Common Stock has been sold pursuant to the exemption from registration provided by Rule 144 under the Securities Act or pursuant to a registration statement that has been declared effective under the Securities Act, and which continues to be effective at the time of such transfer, or such Common Stock has been issued upon conversion of Debentures that have been transferred pursuant to a registration statement that has been declared effective under the Securities Act or pursuant to the exemption from registration provided by Rule 144 under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):

THE COMMON STOCK OF BLACKROCK, INC. EVIDENCED HEREBY (THE “SECURITY”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE COMPANY’S 2.625% CONVERTIBLE DEBENTURES DUE 2035 ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A

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QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY TO THE COMPANY AND THE TRANSFER AGENT FOR THE COMMON STOCK OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT, AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF THIS SECURITY IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRANSFER AGENT FOR THIS COMMON STOCK. THIS LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.

Any such Common Stock as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.06(e).

(f) Any Debenture or Common Stock issued upon the conversion or exchange of a Debenture that, prior to the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), is purchased or owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction that results in such Debentures or Common Stock, as the case may be, no longer being “restricted securities” (as defined under Rule 144).

(g) Notwithstanding any provision of Section 2.06 to the contrary, in the event Rule 144(k) as promulgated under the Securities Act (or any successor rule) is amended to change the two-year period under Rule 144(k) (or the corresponding period under any successor rule), from and after receipt by the Trustee of the Officers’ Certificate and Opinion of Counsel provided for in this Section 2.06(g), (i) each reference in Section 2.06(d) to “two (2) years” and in the

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restrictive legend set forth in such paragraph to “TWO YEARS” shall be deemed for all purposes hereof to be references to such changed period, (ii) each reference in Section 2.06(e) to “two (2) years” and in the restrictive legend set forth in such paragraph to “TWO YEARS” shall be deemed for all purposes hereof to be references to such changed period and (iii) all corresponding references in the Debentures (including the definition of Resale Restriction Termination Date) and the restrictive legends thereon shall be deemed for all purposes hereof to be references to such changed period, provided that such changes shall not become effective if they are otherwise prohibited by, or would otherwise cause a violation of, the then-applicable federal securities laws. The provisions of this Section 2.06(g) will not be effective until such time as the Opinion of Counsel and Officers’ Certificate have been received by the Trustee hereunder. This Section 2.06(g) shall apply to successive amendments to Rule 144(k) (or any successor rule) changing the holding period thereunder.

Section 2.07. Mutilated, Destroyed, Lost or Stolen Debentures. In case any Debenture shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its written request the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Debenture, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Debenture, or in lieu of and in substitution for the Debenture so destroyed, lost or stolen. In every case the applicant for a substituted Debenture shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof.

The Trustee or such authenticating agent may authenticate any such substituted Debenture and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require. Upon the issuance of any substituted Debenture, the Company or the Trustee may require the payment by the holder of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Debenture which has matured or is about to mature or has been called for redemption or has been tendered for repurchase upon a Designated Event or has been surrendered for repurchase on a Repurchase Date or is about to be converted into Common Stock shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Debenture, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Debenture), as the case may be, if the applicant for such

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payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence of their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof.

Every substitute Debenture issued pursuant to the provisions of this Section 2.07 by virtue of the fact that any Debenture is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Debenture shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Debentures duly issued hereunder. To the extent permitted by law, all Debentures shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment or conversion or redemption or repurchase of mutilated, destroyed, lost or stolen Debentures and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment or conversion of negotiable instruments or other securities without their surrender.

Section 2.08. Temporary Debentures. Pending the preparation of Debentures in certificated form, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Debentures (printed or lithographed). Temporary Debentures shall be issuable in any authorized denomination, and substantially in the form of the Debentures in certificated form but with such omissions, insertions and variations as may be appropriate for temporary Debentures, all as may be determined by the Company. Every such temporary Debenture shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Debentures in certificated form. Without unreasonable delay the Company will execute and deliver to the Trustee or such authenticating agent Debentures in certificated form (other than in the case of Debentures in global form) and thereupon any or all temporary Debentures (other than any Global Debenture) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 5.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Debentures an equal aggregate principal amount of Debentures in certificated form. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Debentures shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Debentures in certificated form authenticated and delivered hereunder.

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Section 2.09. Cancellation of Debentures Paid, Etc. All Debentures surrendered for the purpose of payment, repurchase, conversion, exchange or registration of transfer, shall, if surrendered to the Company or any Paying Agent or any Debenture registrar or any Conversion Agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no Debentures shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall destroy canceled Debentures in accordance with its customary procedures and, after such destruction, shall deliver a certificate of such destruction to the Company, at the Company’s written request. If the Company shall acquire any of the Debentures, such acquisition shall not operate as satisfaction of the indebtedness represented by such Debentures unless and until the same are delivered to the Trustee for cancellation.

Section 2.10. CUSIP Numbers. The Company in issuing the Debentures may use “CUSIP” numbers (if then generally in use), and, if so, the trustee shall use “CUSIP” numbers in Company Notices as a convenience to holders of the Debentures; provided, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Debentures or Company Notice and that reliance may be placed only on the other identification numbers printed on the Debentures. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

ARTI CLE 3

REDEMPTION OF DEBENTURES

Section 3.01. Company’s Right to Redeem; Notices to Trustee. Prior to February 20, 2010, the Debentures will not be redeemable at the Company’s option. Beginning on February 20, 2010, the Company, at its option, may redeem the Debentures for cash at any time as a whole, or from time to time in part, at a redemption price (the “Redemption Price”) equal to 100% of the principal amount of the Debentures to be redeemed plus accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on the Debentures to be redeemed to (but excluding) the Redemption Date; provided, however, that, if the Redemption Date falls after a Record Date and on or prior to the succeeding Interest Payment Date, the Redemption Price shall be equal to 100% of the principal amount of the Debentures to be redeemed. If the Company elects to redeem Debentures, it shall notify the Trustee in writing of the Redemption Date, the principal amount of Debentures to be redeemed and the Redemption Price.

The Company shall give the notice to the Trustee provided for in this Section 3.01 not less than thirty (30) days but not more than sixty (60) days before the Redemption Date, unless the Trustee consents to a shorter period,

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accompanied by an Officers’ Certificate to the effect that such redemption will comply with the conditions herein.

Section 3.02. Selection of Debentures to Be Redeemed. If fewer than all the Debentures are to be redeemed, the Trustee shall select the Debentures to be redeemed pro rata or by lot or by a method that complies with applicable legal and securities exchange requirements, if any, and that the Trustee considers appropriate and in accordance with methods generally used at the time of selection by trustees in similar circumstances. The Trustee shall make the selection from outstanding Debentures not previously called for redemption. Debentures and portions of Debentures the Trustee selects shall be in principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to Debentures called for redemption also apply to portions of Debentures called for redemption. The Trustee shall notify the Company as promptly as practicable of the Debentures or portions of Debentures to be redeemed.

Debentures and portions of Debentures that are to be redeemed are convertible, pursuant to this Article 3, by the holder thereof until the close of business one Business Day prior to the Redemption Date. If any Debenture selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Debenture so selected, the converted portion of such Debenture shall be deemed (so far as may be) to be from the portion selected for redemption. Debentures that have been converted during a selection of Debentures to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection.

Section 3.03. Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Company or the Trustee (provided that the Company provided the notice specified in Section 3.01 to the Trustee not less than 45 days before the Redemption Date) shall mail a notice of redemption by first-class mail, postage prepaid, to the holders of each Debenture to be redeemed.

The notice shall identify the Debentures to be redeemed and shall state:

(1) the Redemption Date;

(2) the Redemption Price;

(3) the then existing Conversion Rate;

(4) the name and address of the Paying Agent and the Conversion Agent;

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(5) that Debentures called for redemption may be converted at any time before the close of business on the date that is one Business Day immediately prior to the Redemption Date;

(6) that holders who want to convert their Debentures must satisfy the requirements for conversion set forth in the Debentures and this Indenture;

(7) that Debentures called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;

(8) if fewer than all of the outstanding Debentures are to be redeemed, the certificate numbers, if any, and principal amounts of the particular Debentures to be redeemed; and

(9) the CUSIP number(s) of the Debentures.

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense, provided that the Company makes such request at least three Business Days prior to the date by which such notice of redemption must be given to holders in accordance with this Section 3.03.

Section 3.04. Effect of Notice of Redemption. Once notice of redemption is given, Debentures called for redemption become due and payable on the Redemption Date and at the Redemption Price stated in the notice except for Debentures which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Debentures shall be paid at the Redemption Price stated in the notice.

Section 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. (New York City time) on the Redemption Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary thereof is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the Redemption Price of all Debentures to be redeemed on that date other than Debentures or portions of Debentures called for redemption which on or prior thereto have been delivered by the Company to the Trustee for cancellation or have been converted. Subject to receipt of funds and/or Debentures by the Paying Agent, payment for Debentures surrendered for redemption will be made promptly after the later of (x) the Redemption Date with respect to such Debenture and (y) the time of delivery of such Debenture to the Paying Agent by the holder thereof, by mailing checks for the amount payable to the holders of such Debentures entitled thereto as they shall appear in the Debenture Register, provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Paying Agent shall as promptly as practicable return to the Company any money not required for that purpose because of conversion of Debentures pursuant to Section 15.01. If such money is

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then held by the Company in trust and is not required for such purpose it shall be discharged from such trust.

If the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to redeem on the Redemption Date all the Debentures or portions thereof that are to be redeemed as of the Redemption Date, then on and after the Business Day following the Redemption Date (i) such Debentures will cease to be outstanding, (ii) interest, including Contingent Interest, if any, and Liquidated Damages, if any, will cease to accrue on such Debentures, and (iii) all other rights of the holders of such Debentures will terminate, whether or not book-entry transfer of the Debentures has been made or the Debentures have been delivered to the Trustee or Paying Agent, other than the right to receive the Redemption Price upon delivery of the Debentures.

Section 3.06. Debentures Redeemed in Part. Upon surrender of a Debenture that is redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the holder a new Debenture in an authorized denomination equal in principal amount to the unredeemed portion of the Debenture surrendered. In the event of any redemption in part, the Company will not be required to (i) issue, register the transfer of or exchange any Debenture during a period beginning at the opening of business 15 days before any selection of Debentures for redemption and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all holders of Debentures to be so redeemed, or (ii) register the transfer of or exchange any Debenture so selected for redemption, in whole or in part, except the unredeemed portion of any Debenture being redeemed in part.

Section 3.07. No Redemption Upon Acceleration. Notwithstanding the foregoing, the Company may not redeem the Debentures if it failed to pay any interest, including Contingent Interest, if any, and Liquidated Damages, if any, and such failure to pay is continuing, or if the principal amount of the Debentures has been accelerated, and such acceleration has not been rescinded, on or prior to such Redemption Date.

ARTICLE 4

CONTINGENT INTEREST

Section 4.01. Contingent Interest. Beginning with the six-month interest period commencing February 15, 2010, the Company will pay contingent interest to the Debentureholders during a six month interest period if the Trading Price for each $1,000 principal amount of Debentures for each of the ten Trading Days immediately preceding the first day of the applicable six-month interest period equals or exceeds $1,200. During any six-month interest period when contingent interest is payable, the contingent interest payable on each $1,000

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principal amount of Debentures shall equal 0.25% of the average Trading Price per $1,000 principal amount of Debentures during the ten Trading Days immediately preceding the first day of applicable six-month interest period.

The Trustee’s sole responsibility pursuant to this Section 4.01 hereof shall be to obtain the Trading Price of the Debentures for each of the ten Trading Days immediately preceding the first day of the applicable six-month interest period and to provide such information to the Company. The Company shall determine whether holders are entitled to receive Contingent Interest, and if so, provide notice pursuant to Section 4.03. Notwithstanding any term contained in this Indenture or any other document to the contrary, the Trustee shall have no responsibilities, duties or obligations for or with respect to (i) determining whether the Company must pay Contingent Interest or (ii) determining the amount of Contingent Interest, if any, payable by the Company.

Section 4.02. Payment of Contingent Interest. Contingent Interest for any six-month interest period shall be paid on the applicable interest payment date to the Person in whose name any Debenture (or its Predecessor Debenture) is registered on the Debenture Register at the corresponding Record Date. Contingent Interest due under this Article 4 shall be treated for all purposes of this Indenture like any other interest accruing on the Debentures.

Section 4.03. Contingent Interest Notification. By the first Business Day of a six-month interest period during which Contingent Interest will be paid, the Company will disseminate a press release through Dow Jones & Company, Inc. or Bloomberg Business News stating that Contingent Interest will be paid on the Debentures and identifying the six-month interest period (or publish the information on its website or through such other public medium it may use at that time).

ARTICLE 5

PARTICULAR COVENANTS OF THE COMPANY

Section 5.01. Payment of Principal, Premium, Interest and Liquidated Damages. The Company covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and premium, if any (including the redemption price upon redemption pursuant to Article 3), accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on each of the Debentures at the places, at the respective times and in the manner provided herein and in the Debentures. Each installment of accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on the Debentures due on any Payment Date (as defined in the Registration Rights Agreement) may be paid by mailing checks for the amount payable to or upon the written order of the Debentureholders entitled thereto as they shall appear on the registry books of the Company, provided that, with respect to any Debentureholder with an aggregate principal amount equal to or in excess of

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$2,000,000, at the request of such holder in writing to the Company, accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on such holder’s Debentures shall be paid by wire transfer in immediately available funds in accordance with the wire transfer instructions supplied by such holder from time to time to the Trustee and Paying Agent (if different from Trustee) at least two days prior to the applicable record date; provided further that payment of accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, made to the Depositary shall be paid by wire transfer in immediately available funds in accordance with such wire transfer instructions and other procedures provided by the Depositary from time to time.

Section 5.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Debentures may be surrendered for registration of transfer or exchange or for presentation for payment, redemptions or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Debentures and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not designated or appointed by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the Borough of Manhattan, The City of New York.

The Company may also from time to time designate one or more other offices or agencies where the Debentures may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York, for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms Paying Agent and Conversion Agent include any such additional or other offices or agencies, as applicable.

The Company hereby initially designates the Trustee as the Paying Agent, Debenture registrar, Custodian and Conversion Agent and the Corporate Trust Office and the office of agency of the Trustee in the Borough of Manhattan shall be considered as one such office or agency of the Company for each of the aforesaid purposes.

So long as the Trustee is the Debenture registrar, the Trustee agrees to mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the third paragraph of Section 8.11.

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Section 5.03. Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 5.04. Provisions as to Paying Agent.

(a) If the Company shall appoint a Paying Agent other than the Trustee or if the Trustee shall appoint such a Paying Agent, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.04:

(i) that it will hold all sums held by it as such agent for the payment of the principal of and premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on the Debentures (whether such sums have been paid to it by the Company or by any other obligor on the Debentures) in trust for the benefit of the holders of the Debentures;

(ii) that it will give the Trustee notice of any failure by the Company (or by any other obligor on the Debentures) to make any payment of the principal of and premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on the Debentures when the same shall be due and payable; and

(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

The Company shall, on or before each due date of the principal of, or premium, if any, or accrued and unpaid interest, including Contingent Interest, if any, or Liquidated Damages, if any, on the Debentures, deposit with the Paying Agent a sum sufficient to pay such principal, premium, if any, or accrued and unpaid interest, including Contingent Interest, if any, or Liquidated Damages, if any, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action, provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 10:00 a.m., New York City time, on such date.

(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, premium, if any, accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on the Debentures, set aside, segregate and hold in trust for the benefit of the holders of the Debentures a sum sufficient to pay such principal, premium, if any, accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, so becoming due and will notify the Trustee in writing of any

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failure to take such action and of any failure by the Company (or any other obligor under the Debentures) to make any payment of the principal of, premium, if any, accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on the Debentures when the same shall become due and payable.

(c) Anything in this Section 5.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 5.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.

(d) Anything in this Section 5.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 5.04 is subject to Section 13.03 and Section 13.04.

Section 5.05. Existence. Subject to Article 12, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 5.06. Rule 144A Information Requirement. Within the period prior to the expiration of the holding period applicable to sales of Debentures or any Common Stock issuable on conversion thereof under Rule 144(k) under the Securities Act (or any successor provision), the Company covenants and agrees that it shall, during any period in which it is not subject to Section 13 or 15(d) under the Exchange Act, make available to any holder or beneficial Debentureholder or any such Common Stock, in each case which continue to be Restricted Securities, in connection with any sale thereof and any prospective Purchasers of Debentures or such Common Stock from such holder or beneficial holder, the information required pursuant to Rule 144A(d)(4) under the Securities Act upon the written request of any holder or beneficial holder of the Debentures or such Common Stock and it will take such further action as any holder or beneficial holder of such Debentures or such Common Stock may reasonably request, all to the extent required from time to time to enable such holder or beneficial holder to sell its Debentures or Common Stock without registration under the Securities Act within the limitation of the exemption provided by Rule 144A, as such rule may be amended from time to time. Upon the written request of any holder or any beneficial holder of the Debentures or such Common Stock, the Company will deliver to such holder a written statement as to whether it has complied with such requirements.

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Section 5.07. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Debentures as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 5.08. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year ending on December 31, 2005) an Officers’ Certificate stating whether or not to the best of their knowledge the signers know of any default or Event of Default that occurred during such period. If they do, such Officers’ Certificate shall describe the default or Event of Default and its status.

Section 5.09. Liquidated Damages. If Liquidated Damages are payable by the Company pursuant to the Registration Rights Agreement, the Company shall deliver to the Trustee a certificate to that effect stating (i) the amount of such Liquidated Damages that are payable and (ii) the date on which such damages are payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Liquidated Damages are payable. If the Company has paid Liquidated Damages directly to the persons entitled to them, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment.

Section 5.10. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

Section 5.11. Calculation of Tax Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of Tax Original Issue Discount (including daily rates and accrual periods) accrued on the Debentures as of the end of such year and (ii) such other specific information relating to such Tax Original Issue Discount as may then be reasonably requested by the Trustee and relevant under the Internal Revenue Code of 1986, as amended from time to time, or the Treasury regulations promulgated thereunder.

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Section 5.12. Resale Of The Debentures. During the period of two years after the last date of original issuance of the Debentures the Company shall not, and shall not permit any of its Affiliates to, resell any of the Debentures or the shares of Class A Common Stock, if any, issued upon conversion of the Debentures, that constitute “restricted securities” under Rule 144 under the Securities Act that have been reacquired by any of them.

ARTICLE 6

LISTS OF DEBENTUREHOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 6.01. Lists of Debentureholders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than fifteen (15) days after each May 1 and November 1 in each year beginning with May 1, 2005, and at such other times as the Trustee may request in writing, within thirty (30) days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Debentureholders as of a date not more than fifteen (15) days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Debenture registrar.

Section 6.02. Preservation and Disclosure of Lists.

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Debentureholders contained in the most recent list furnished to it as provided in Section 6.01 or maintained by the Trustee in its capacity as Debenture registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 6.01 upon receipt of a new list so furnished.

(b) The rights of Debentureholders to communicate with other Debentureholders with respect to their rights under this Indenture or under the Debentures and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.

(c) Every Debentureholder, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Debentureholders made pursuant to the Trust Indenture Act.

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Section 6.03. Reports by Trustee.

(a) Within sixty (60) days after May 15 of each year commencing with the year 2005, the Trustee shall transmit to Debentureholders such reports dated as of May 15 of each year in which such reports are made concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

(b) A copy of such report shall, at the time of such transmission to Debentureholders, be filed by the Trustee with each stock exchange and automated quotation system upon which the Debentures are listed and with the Company. The Company will notify the Trustee in writing within a reasonable time when the Debentures are listed on any stock exchange or automated quotation system and when any such listing is discontinued.

Section 6.04. Reports by Company.

(a) After this Indenture has been qualified under the Trust Indenture Act, the Company shall file with the Trustee and the Commission, and transmit to Debentureholders, such information, documents and other reports and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.

(b) Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officers’ Certificate).

ARTICLE 7

DEFAULTS AND REMEDIES

Section 7.01. Events of Default. The following events shall be Events of Default with respect to the Debentures:

(a) default in the payment of the principal of and premium, if any, on the Debentures as and when the same shall become due and payable either at maturity or in connection with any redemption, repurchase or otherwise; or

(b) default for thirty (30) days in the payment of any installment of interest, including Contingent Interest, upon any of the Debentures as and when the same shall become due and payable; or

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(c) default for thirty (30) days in the payment of any installment of Liquidated Damages, if any, upon any of the Debentures as and when the same shall become due and payable; or

(d) failure on the part of the Company duly to observe or perform any other of the covenants on the part of the Company in the Debentures or in this Indenture (other than a covenant default in whose performance or whose breach is elsewhere in this Section specifically dealt with) and the continuance of such failure for a period of sixty (60) days after the date on which written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee, or to the Company and a Responsible Officer of the Trustee by the holders of at least 25% in aggregate principal amount of Debentures at the time outstanding, determined in accordance with Section 9.04; or

(e) a default in the payment of the Repurchase Price or Designated Event Repurchase Price in respect of any Debenture on the Repurchase Date or Designated Event Repurchase Date in accordance with the provisions of Article 16; or

(f) failure on the part of the Company to provide a written notice of a Designated Event in accordance with Section 16.02; or

(g) the Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

(h) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization or other relief with respect to the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of ninety (90) consecutive days; or

(i) following the exercise by a Debentureholder of the right to convert any Debenture in accordance with Article 15 hereof, the Company fails to pay the Principal Return or deliver the Net Shares when due within five calendar days following the applicable date of payment and delivery set forth in Article 15; or

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(j) acceleration of Indebtedness of the Company that, in the aggregate, is equal to or exceeds $25,000,000 and such Indebtedness is not discharged, or such acceleration is not rescinded or annulled, within a period of thirty (30) days after the date on which written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee, or to the Company and a Responsible Officer of the Trustee by the holders of at least 25% in aggregate principal amount of Debentures at the time outstanding, determined in accordance with Section 9.04.

In case one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 7.01(g) or Section 7.01(h) with respect to the Company), unless the principal of all of the Debentures shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding determined in accordance with Section 9.04, by notice in writing to the Company (and to the Trustee if given by Debentureholders), may declare the principal of and premium, if any, on all the Debentures and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Debentures contained to the contrary notwithstanding. If an Event of Default specified in Section 7.01(g) or Section 7.01(h) occurs and is continuing with respect to the Company, the principal of all the Debentures and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, shall be immediately due and payable. This provision, however, is subject to the conditions that if, at any time after the principal of the Debentures shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, upon all Debentures and the principal of and premium, if any, on any and all Debentures that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, (to the extent that payment of such interest is enforceable under applicable law) and on such principal and premium, if any, at the rate of 3.625% per year) and amounts due to the Trustee pursuant to Section 8.06, and if any and all defaults under this Indenture, other than the nonpayment of principal of and premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on Debentures that shall

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have become due by acceleration, shall have been cured or waived pursuant to Section 7.07, then and in every such case the holders of a majority in aggregate principal amount of the Debentures then outstanding, by written notice to the Company and to the Trustee, may waive all defaults or Events of Default with respect to the Debentures and rescind and annul such declaration and its consequences; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or Event of Default, or shall impair any right consequent thereon. The Company shall notify the Responsible Officer of the Trustee, promptly upon becoming aware thereof, of any Event of Default by delivering to the Trustee a statement specifying such Event of Default.

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such waiver or rescission and annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Debentureholders, and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Debentureholders, and the Trustee shall continue as though no such proceeding had been instituted.

Section 7.02. Payments of Debentures on Default; Suit Therefor. In the event that the Trustee or the holders of not less than twenty-five percent (25%) in aggregate principal amount of the Debentures then outstanding hereunder have declared the principal of and premium, if any, on all Debentures (including accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any) to be due and payable immediately in accordance with Section 7.01, and the Company shall have failed forthwith to pay such amounts, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid (including such further amounts as shall be sufficient to cover the reasonable costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence or bad faith), and may prosecute any such action or proceeding to judgment or final degree, and may enforce any such judgment or final decree against the Company or any other obligor on the Debentures and collect in the manner provided by law out of the property of the Company or any other obligor on the Debentures wherever situated the monies adjudged or decreed to be payable.

In the case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Debentures under title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator,

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sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the case of any other judicial proceedings relative to the Company or such other obligor upon the Debentures, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Debentures shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 7.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, in respect of the Debentures, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Debentureholders allowed in such judicial proceedings relative to the Company or any other obligor on the Debentures, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due the Trustee under Section 8.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Debentureholders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Debentureholders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees, and including any other amounts due to the Trustee under Section 8.06 hereof, incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property which the holders of the Debentures may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Debentureholder any plan of reorganization, arrangement, adjustment or composition affecting the Debentureholder or the rights of any Debentureholder thereof, or to authorize the Trustee to vote in respect of the claim of any Debentureholder in any such proceeding.

All rights of action and of asserting claims under this Indenture, or under any of the Debentures, may be enforced by the Trustee without the possession of

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any of the Debentures, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the holders of the Debentures.

In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the holders of the Debentures, and it shall not be necessary to make any holders of the Debentures parties to any such proceedings.

Section 7.03. Application of Monies Collected by Trustee. Any monies collected by the Trustee pursuant to this Article 7 with respect to the Debentures shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Debentures, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

First, to the payment of all amounts due the Trustee under Section 8.06;

Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on the Notes in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate borne by the Notes, such payments to be made ratably to the Persons entitled thereto;

Third, in case the principal of the outstanding Debentures shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount then owing and unpaid upon the Debentures for principal and premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Debentures, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Debentures, then to the payment of such principal and premium, if any, and interest without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, or of any installment of interest over any other installment of interest, or of any Debenture over any other Debenture, ratably to the aggregate of such principal and premium, if any, and accrued and unpaid interest; and

Fourth, to the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.

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Section 7.04. Proceedings by Debentureholders. No holder of any Debenture shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such indemnity it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request shall have been given to the Trustee by the Debentureholders pursuant to Section 7.07; it being understood and intended, and being expressly covenanted by the taker and holder of every Debenture with every other taker and holder and the Trustee, that no one or more Debentureholders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Debentureholder, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Debentureholders (except as otherwise provided herein). For the protection and enforcement of this Section 7.04, each and every Debentureholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Notwithstanding any other provision of this Indenture and any provision of any Debenture, the right of any Debentureholder to receive payment of the principal of and premium, if any (including the redemption price upon redemption pursuant to Article 3), and accrued and unpaid interest, including Contingent Interest, and accrued and unpaid Liquidated Damages, if any, on such Debenture, on or after the respective due dates expressed in such Debenture or in the notice of redemption, or to institute suit for the enforcement of any such payment on or after such respective dates against the Company shall not be impaired or affected without the consent of such Debentureholder.

Anything in this Indenture or the Debentures to the contrary notwithstanding, the holder of any Debenture, without the consent of either the Trustee or the holder of any other Debenture, in his own behalf and for his own benefit, may enforce, and may institute and maintain any proceeding suitable to enforce, his rights of conversion as provided herein.

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Section 7.05. Proceedings by Trustee. In case of an Event of Default the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

Section 7.06. Remedies Cumulative and Continuing. Except as provided in the last paragraph of Section 2.07, all powers and remedies given by this Article 7 to the Trustee or to the Debentureholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Debentures, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Debentures to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such default or any acquiescence therein; and, subject to the provisions of Section 7.04, every power and remedy given by this Article 7 or by law to the Trustee or to the Debentureholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Debentureholders.

Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders. The holders of a majority in aggregate principal amount of the Debentures at the time outstanding determined in accordance with Section 9.04 shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to Debentures; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The holders of a majority in aggregate principal amount of the Debentures at the time outstanding determined in accordance with Section 9.04 may on behalf of the holders of all of the Debentures waive any past default or Event of Default hereunder and its consequences except (i) a default in the payment of premium, accrued and unpaid interest, including Contingent Interest, if any, or accrued and unpaid Liquidated Damages, if any, on, or the principal of, the Debentures when due which has not been cured pursuant to the provisions of Section 7.01, (ii) a failure by the Company to convert any Debentures into Common Stock or (iii) a default in respect of a covenant or provisions hereof which under Article 11 cannot be modified or amended without the consent of the holders of all Debentures then outstanding. Upon any such waiver the Company, the Trustee and the holders of the Debentures shall be restored to their former positions and rights hereunder;

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but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 7.07, said default or Event of Default shall for all purposes of the Debentures and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

Section 7.08. Notice of Defaults. The Trustee shall, within ninety (90) days after the occurrence of a default of which a Responsible Officer has actual knowledge, mail to all Debentureholders as the names and addresses of such holders appear upon the Debenture register, notice of all defaults known to a Responsible Officer, unless such defaults shall have been cured or waived before the giving of such notice; and provided that, except in the case of default in the payment of the principal of, or premium, if any, accrued and unpaid interest, including Contingent Interest, if any, or accrued and unpaid Liquidated Damages, if any, on any of the Debentures, including without limiting the generality of the foregoing any default in the payment of any Repurchase Price or Designated Event Repurchase Price, then in any such event the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Debentureholders.

Section 7.09. Undertaking to Pay Costs. All parties to this Indenture agree, and each holder of any Debenture by his acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 7.09 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Debentureholder, or group of Debentureholders, holding in the aggregate more than 10% in principal amount of the Debentures at the time outstanding determined in accordance with Section 9.04, or to any suit instituted by any Debentureholder for the enforcement of the payment of the principal of or premium, if any, accrued and unpaid interest, including Contingent Interest, if any, or accrued and unpaid Liquidated Damages, if any, on any Debenture (including, but not limited to, the Repurchase Price or Designated Event Repurchase Price with respect to the Debentures being repurchased as provided in this Indenture) on or after the due date expressed in such Debenture or to any suit for the enforcement of the right to convert any Debenture in accordance with the provisions of Article 15.

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ARTICLE 8

CONCERNING THE TRUSTEE

Section 8.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that

(a) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:

(i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and, after it has been qualified thereunder, the Trust Indenture Act, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture and the Trust Indenture Act against the Trustee; and

(ii) in the absence of bad faith and willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be established by a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts;

(c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Debentures at the time outstanding determined as provided in Section 9.04 relating to the time,

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method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

(d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;

(e) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-registrar with respect to the Debentures;

(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless such Responsible Officer of the Trustee had actual knowledge of such event;

(g) in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing trust account. In no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investments prior to its stated maturity or the failure of the party directing such investments prior to its stated maturity or the failure of the party directing such investment to provide timely written investment direction, and the Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company; and

(h) in the event that the Trustee is also acting as Custodian, Debenture Registrar, Paying Agent, Conversion Agent or transfer agent hereunder, the rights and protections afforded to the Trustee pursuant to this Article 8 shall also be afforded to such Custodian, Debenture Registrar, Paying Agent, Conversion Agent or transfer agent.

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not assured to it.

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Section 8.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 8.01:

(a) the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

(c) the Trustee may consult with counsel and require an opinion of counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Debentureholders pursuant to the provisions of this Indenture, unless such Debentureholders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby;

(e) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require indemnity satisfactory to the Trustee from the Debentureholders against such expenses or liability as a condition to so proceeding; the reasonable expenses of every such examination shall be paid by the Company or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Company upon demand; and

(f) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Trustee shall not be responsible for any misconduct

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or negligence on the part of any agent, custodian, nominee or attorney appointed by it with due care hereunder.

In no event shall the Trustee be liable for any consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action other than through the Trustee’s willful misconduct or gross negligence. The Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Debentures, unless either (1) a Responsible Officer shall have actual knowledge of such default or Event of Default or (2) written notice of such default or Event of Default shall have been given to the Trustee by the Company or by any holder of the Debentures; and the permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 8.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the Debentures (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Debentures. The Trustee shall not be accountable for the use or application by the Company of any Debentures or the proceeds of any Debentures authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.

Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures. The Trustee, any Paying Agent, any Conversion Agent or Debenture registrar, in its individual or any other capacity, may become the owner or pledgee of Debentures with the same rights it would have if it were not Trustee, Paying Agent, Conversion Agent or Debenture registrar.

Section 8.05. Monies to Be Held in Trust. Subject to the provisions of Section 13.04, all monies received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed from time to time by the Company and the Trustee.

Section 8.06. Compensation and Expenses of Trustee. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements

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and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence, willful misconduct or bad faith. The Company also covenants to indemnify the Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith and its agents and any authenticating agent for, and to hold them harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on the part of the Trustee, its officers, directors, agents or employees, or such agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim of liability in the premises. The obligations of the Company under this Section 8.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Debentures upon all property and funds held or collected by the Trustee as such, except, subject to the effect of Section 7.06, funds held in trust herewith for the benefit of the holders of particular Debentures prior to the date of the accrual of such unpaid compensation or indemnifiable claim. The Trustee’s right to receive payment of any amounts due under this Section 8.06 shall not be subordinate to any other liability or indebtedness of the Company (even though the Debentures may be so subordinated). The obligation of the Company under this Section 8.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal or the Trustee. The indemnification provided in this Section 8.06 shall extend to the officers, directors, agents and employees of the Trustee.

When the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 7.01(g) or Section 7.01(h) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

Section 8.07. Officers’ Certificate as Evidence. Except as otherwise provided in Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence, willful misconduct, recklessness and bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee, and such Officers’ Certificate, in the absence of negligence, willful misconduct, recklessness and bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

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Section 8.08. Conflicting Interests of Trustee. After qualification under the Trust Indenture Act, if the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

Section 8.09. Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If such person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 8.10. Resignation or Removal of Trustee.

(a) The Trustee may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof to the Debentureholders at their addresses as they shall appear on the Debenture register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment sixty (60) days after the mailing of such notice of resignation to the Debentureholders, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six months may, subject to the provisions of Section 7.09, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

(b) In case at any time any of the following shall occur:

(i) the Trustee shall fail to comply with Section 8.08 within a reasonable time after written request therefor by the Company or by any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six (6) months, or

(ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 8.09 and shall fail to resign after written request therefor by the Company or by any such Debentureholder, or

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(iii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 7.09, any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

(c) The holders of a majority in aggregate principal amount of the Debentures at the time outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless within ten (10) days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so removed or any Debentureholder, upon the terms and conditions and otherwise as in Section 8.10(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee.

(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 8.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 8.11.

Section 8.11. Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 8.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 8.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such

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rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of holders of particular Debentures, to secure any amounts then due it pursuant to the provisions of Section 8.06.

No successor trustee shall accept appointment as provided in this Section 8.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 8.08 and be eligible under the provisions of Section 8.09.

Upon acceptance of appointment by a successor trustee as provided in this Section 8.11, each of the Company and the former trustee, at the written direction and at the expense of the Company shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Debentureholders at their addresses as they shall appear on the Debenture register. If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.

Section 8.12. Succession by Merger, Etc. Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that in the case of any corporation succeeding to all or substantially all of the corporate trust business of the Trustee such corporation shall be qualified under the provisions of Section 8.08 and eligible under the provisions of Section 8.09.

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Debentures shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Debentures so authenticated; and in case at that time any of the Debentures shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Debentures either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Debentures or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Debentures in the name of any predecessor

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Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

Section 8.13. Limitation on Rights of Trustee as Creditor. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Debentures), after qualification under the Trust Indenture Act, the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of the claims against the Company (or any such other obligor).

Section 8.14. Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the holders of the Debentures under this Indenture, including, without limitation, under Article IV hereof) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

ARTICLE 9

CONCERNING THE DEBENTUREHOLDERS

Section 9.01. Action by Debentureholders. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Debentures may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Debentureholders in person or by agent or proxy appointed in writing, or (b) by the record of the Debentureholders voting in favor thereof at any meeting of Debentureholder duly called and held in accordance with the provisions of Article 10, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Debentureholders. Whenever the Company or the Trustee solicits the taking of any action by the holders of the Debentures, the Company or the Trustee may fix in advance of such solicitation, a date as the record date for determining Debentureholders entitled to take such action. The record date shall

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be not more than fifteen (15) days prior to the date of commencement of solicitation of such action.

Section 9.02. Proof of Execution by Debentureholders. Subject to the provisions of Section 8.01, Section 8.02 and Section 10.05, proof of the execution of any instrument by a Debentureholder or his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Debentures shall be proved by the Debenture register or by a certificate of the Debenture registrar. The record of any Debentureholders’ meeting shall be proved in the manner provided in Section 10.06.

Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Debenture registrar may deem the person in whose name such Debenture shall be registered upon the Debenture register to be, and may treat him as, the absolute owner of such Debenture (whether or not such Debenture shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Debenture registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on such Debenture, for conversion of such Debenture and for all other purposes; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Debenture registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Debenture. Notwithstanding anything to the contrary in this Indenture or the Debentures following an event which, after notice or passage of time or both, would become a Default, any holder of a beneficial interest in a Global Debenture may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other person, such holder’s right to exchange such beneficial interest for a Debenture in certificated form in accordance with the provisions of this Indenture.

Section 9.04. Company-Owned Debentures Disregarded. In determining whether the holders of the requisite aggregate principal amount of Debentures have concurred in any direction, consent, waiver or other action under this Indenture, Debentures that are owned by the Company or any other obligor on the Debentures or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on such Debentures shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent,

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waiver or other action only Debentures that a Responsible Officer knows are so owned shall be so disregarded. Debentures so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 9.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Debentures and that the pledgee is not the Company, any other obligor on the Debentures or a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers’ Certificate listing and identifying all Debentures, if any, known by the Company to be owned or held by or for the account of any of the above described persons; and, subject to Section 8.01, the Trustee shall be entitled to accept such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the fact that all Debentures not listed therein are outstanding for the purpose of any such determination.

Section 9.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Debentures specified in this Indenture in connection with such action, any holder of a Debenture that is shown by the evidence to be included in the Debentures the holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 9.02, revoke such action so far as concerns such Debenture. Except as aforesaid, any such action taken by the holder of any Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of such Debenture and of any Debentures issued in exchange or substitution therefor, irrespective of whether any notation in regard thereto is made upon such Debenture or any Debenture issued in exchange or substitution therefor.

ARTICLE 10

DEBENTUREHOLDERS’ MEETINGS

Section 10.01. Purpose of Meetings. A meeting of Debentureholders may be called at any time and from time to time pursuant to the provisions of this Article 10 for any of the following purposes:

(a) to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any default or Event of Default hereunder and its consequences, or to take any other action authorized to be taken by Debentureholders pursuant to any of the provisions of Article 7;

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(b) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 8;

(c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 11.02; or

(d) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Debentures under any other provision of this Indenture or under applicable law.

Section 10.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of Debentureholders to take any action specified in Section 10.01, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the Debentureholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 9.01, shall be mailed to holders of such Debentures at their addresses as they shall appear on the Debenture register. Such notice shall also be mailed to the Company. Such notices shall be mailed not less than twenty (20) nor more than ninety (90) days prior to the date fixed for the meeting.

Any meeting of Debentureholders shall be valid without notice if the holders of all Debentures then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the holders of all Debentures outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.

Section 10.03. Call of Meetings by Company or Debentureholders. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the holders of at least 10% in aggregate principal amount of the Debentures then outstanding, shall have requested the Trustee to call a meeting of Debentureholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within twenty (20) days after receipt of such request, then the Company or such Debentureholders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 10.01, by mailing notice thereof as provided in Section 10.02.

Section 10.04. Qualifications for Voting. To be entitled to vote at any meeting of Debentureholders a person shall (a) be a holder of one or more Debentures on the record date pertaining to such meeting or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Debentures. The only persons who shall be entitled to be present or to speak at any meeting of Debentureholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

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Section 10.05. Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Debentureholders, in regard to proof of the holding of Debentures and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Debentureholders as provided in Section 10.03, in which case the Company or the Debentureholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of a majority in principal amount of the Debentures represented at the meeting and entitled to vote at the meeting.

Subject to the provisions of Section 9.04, at any meeting of Debentureholders each Debentureholder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Debentures held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debenture challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Debentures held by him or instruments in writing as aforesaid duly designating him as the proxy to vote on behalf of other Debentureholders. Any meeting of Debentureholders duly called pursuant to the provisions of Section 10.02 or Section 10.03 may be adjourned from time to time by the holders of a majority of the aggregate principal amount of Debentures represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

Section 10.06. Voting. The vote upon any resolution submitted to any meeting of Debentureholders shall be by written ballot on which shall be subscribed the signatures of the Debentureholders or of their representatives by proxy and the principal amount of the Debentures held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Debentureholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 10.02. The record shall show the principal amount of the Debentures

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voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the matters therein stated.

Section 10.07. No Delay of Rights by Meeting. Nothing contained in this Article 10 shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Debentureholders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Debentureholders under any of the provisions of this Indenture or of the Debentures.

ARTICLE 11

SUPPLEMENTAL INDENTURES

Section 11.01. Supplemental Indentures Without Consent of Debentureholders. The Company, when authorized by the resolutions of the Board of Directors, and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

(a) to make provision with respect to the conversion rights of the Debentureholders pursuant to the requirements of Article 15;

(b) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Debentures, any property or assets;

(c) to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article 12;

(d) to add to the covenants of the Company such further covenants, restrictions or conditions for the benefit of the Debentureholders, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace

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after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default;

(e) to increase, from time to time, the per annum interest rate on the Debentures for any period;

(f) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture which shall not materially adversely affect the interests of the holders of the Debentures;

(g) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Debentures;

(h) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualifications of this Indenture under the Trust Indenture Act, or under any similar federal statute hereafter enacted; or

(i) to provide the holders of Debentures with additional rights to require the Company to purchase the Debentures on additional purchase dates.

Upon the written request of the Company, accompanied by a Board Resolution authorizing the execution of such supplemental indenture, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions of this Section 11.01 may be executed by the Company and the Trustee without the consent of the holders of any of the Debentures at the time outstanding, notwithstanding any of the provisions of Section 11.02.

Notwithstanding any other provision of the Indenture or the Debentures, the Registration Rights Agreement and the obligation to pay Liquidated Damages thereunder may be amended, modified or waived solely in accordance with the provisions of the Registration Rights Agreement.

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Section 11.02. Supplemental Indentures With Consent of Debentureholders. With the consent (evidenced as provided in Article 9) of the holders of not less than a majority in aggregate principal amount of the Debentures at the time outstanding (determined in accordance with Article 9), the Company, when authorized by the resolutions of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the holders of the Debentures, provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Debenture, or reduce the rate or extend the time for payment of accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on repurchase, redemption or conversion thereof, impair, or change in any respect adverse to the Debentureholder, the obligation of the Company to repurchase any Debenture at the option of the holder on any Repurchase Date or upon the happening of a Designated Event, or change the time at which the Debentures may or must be redeemed or repurchased, or impair or adversely affect the right of any Debentureholder to institute suit for the payment thereof, or change the currency in which the Debentures are payable, or impair the right to convert the Debentures into Common Stock, cash or other property receivable upon conversion, subject to the terms set forth herein, including Section 15.05, or reduce the number of shares of Common Stock or the amount of any other property receivable upon conversion of the Debentures, reduce the quorum or voting requirement for the Debentures as set forth in this Indenture, modify the provisions of this Section 11.02, except to increase the percentage in principal amount of Debentures whose holders must consent to an amendment or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of holders of outstanding Debentures affected by such modification or waiver without the consent of the holder of each such Debenture so affected, or (ii) reduce the aforesaid percentage of Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Debentures then outstanding.

Upon the written request of the Company, accompanied by a copy of the Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Debentureholders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

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It shall not be necessary for the consent of the Debentureholders under this Section 11.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

Section 11.03. Effect of Supplemental Indentures. Any supplemental indenture executed pursuant to the provisions of this Article 11 shall comply with the Trust Indenture Act, as then in effect, provided that this Section 11.03 shall not require such supplemental indenture or the Trustee to be qualified under the Trust Indenture Act prior to the time such qualification is in fact required under the terms of the Trust Indenture Act or the Indenture has been qualified under the Trust Indenture Act, nor shall it constitute any admission or acknowledgment by any party to such supplemental indenture that any such qualification is required prior to the time such qualification is in fact required under the terms of the Trust Indenture Act or the Indenture has been qualified under the Trust Indenture Act. Upon the execution of any supplemental indenture pursuant to the provisions of this Article 11, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Debentureholders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 11.04. Notation on Debentures. Debentures authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 11 may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Debentures so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 17.11) and delivered in exchange for the Debentures then outstanding, upon surrender of such Debentures then outstanding.

Section 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee. In addition to the documents required by Section 17.05, upon its request, the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 11.

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ARTICLE 12

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 12.01. Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of Section 12.02 and notwithstanding anything to the contrary in this Indenture, the Company shall not consolidate or merge with or into any other Person (whether or not affiliated with the Company), or sell, convey or lease its assets and properties substantially as an entirety to any Person unless the Company is the surviving Person or the Person formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance or transfer, or that leases the assets and properties of the Company substantially as an entirety shall be a corporation organized under the laws of the United States of America, any state thereof or the District of Columbia; and unless, after giving effect to any such consolidation, merger, sale, conveyance or lease, there shall be no Event of Default under this Indenture, and no event which, after notice or passage of time or both, would become an Event of Default. Further, upon any such consolidation, merger, sale, conveyance or lease, the due and punctual payment of the principal of and premium, if any, accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on all of the Debentures, according to their terms, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Company, shall be expressly assumed by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee by the Person (if other than the Company) formed by such consolidation, or into which the Company shall have been merged, or which shall have acquired or leased the Company’s assets or properties substantially as an entirety, and such supplemental indenture shall provide for the applicable conversion rights set forth in Article 15.

Section 12.02. Successor Corporation to Be Substituted. In case of any such consolidation, merger, sale, conveyance or lease and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on all of the Debentures and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such successor Person shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the party of the first part. Such successor Person thereupon may cause to be signed, and may issue either in its own name or in the name of BlackRock, Inc. any or all of the Debentures issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to

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be authenticated and delivered, any Debentures which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Debentures which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Debentures so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debentures theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Debentures had been issued at the date of the execution hereof. In the event of any such consolidation, merger, sale, conveyance or lease, the person named as the “Company” in the first paragraph of this Indenture or any successor which shall thereafter have become such in the manner prescribed in this Article 12 may be dissolved, wound up and liquidated at any time thereafter and such person shall be released from its liabilities as obligor and maker of the Debentures and from its obligations under this Indenture.

In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and form (but not in substance) may be made in the Debentures thereafter to be issued as may be appropriate.

Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance or lease and any such assumption complies with the provisions of this Article 12.

ARTICLE 13

SATISFACTION AND DISCHARGE OF INDENTURE

Section 13.01. Discharge of Indenture. When (a) the Company shall deliver to the Trustee for cancellation all Debentures theretofore authenticated (other than any Debentures that have been destroyed, lost or stolen and in lieu of or in substitution for which other Debentures shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Debentures not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, and the Company shall deposit with the Trustee, in trust, funds sufficient to pay at maturity or at redemption all of the Debentures (other than any Debentures that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Debentures shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, due or to become due to such date of maturity or Redemption Date, as the case may be, accompanied by a verification report, as to the sufficiency of the deposited amount, from an independent certified public accountant or other financial professional, and if in either case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company,

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then this Indenture shall cease to be of further effect except as to (i) the right to receive payments of principal of and premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on, the Debentures and the other rights, duties and obligations of Debentureholders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee, (ii) the rights, obligations and immunities of the Trustee hereunder and (iii) the obligations of the Company under Section 8.06, and the Trustee, on written demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 17.05 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Debentures.

Section 13.02. Deposited Monies to Be Held in Trust by Trustee. Subject to Section 13.04, all monies deposited with the Trustee pursuant to Section 13.01 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the holders of the particular Debentures for the payment of which such monies have been deposited with the Trustee, of all sums due and to become due thereon for principal and premium and accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any.

Section 13.03. Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies then held by any Paying Agent of the Debentures (other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies.

Section 13.04. Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies deposited with or paid to the Trustee for payment of the principal of, premium, if any, or accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on Debentures (including any Principal Return, Redemption Price, Repurchase Price or Designated Event Repurchase Price) and not applied but remaining unclaimed by the Debentureholders for two years after the date upon which the principal of, premium, if any, or accrued and unpaid interest, including Contingent Interest, if any, or accrued and unpaid Liquidated Damages, if any, on such Debentures, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on written request and all liability of the Trustee shall thereupon cease with respect to such monies; and the holder of any of the Debentures shall thereafter look only to the Company for any payment which such holder may be entitled to collect unless an applicable abandoned

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property law designates another person. The Trustee shall, promptly after such payment of the principal of, premium, if any, or accrued and unpaid interest, including Contingent Interest, if any, or accrued and unpaid Liquidated Damages, if any, on Debentures (including any Principal Return, Redemption Price, Repurchase Price or Designated Event Repurchase Price), as described in this Section 13.04 and upon written request of the Company, return to the Company any funds in excess of the amount required for such payment.

Section 13.05. Reinstatement. If (i) the Trustee or the Paying Agent is unable to apply any money in accordance with Section 13.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application and (ii) the holders of at least a majority in principal amount of the then outstanding Debentures so request by written notice to the Trustee, the Company’s obligations under this Indenture shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 13.02; provided, however, that if the Company makes any payment of interest, including Contingent Interest, or Liquidated Damages on or principal of any Debenture following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Debentureholders to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 14

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 14.01. Indenture and Debentures Solely Corporate Obligations. No recourse for the payment of the principal of or premium, if any, or accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on any Debenture, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or Subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debentures.

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ARTICLE 15

CONVERSION OF DEBENTURES

Section 15.01. Conversion Privilege.

(a) Subject to the conditions described below, and upon compliance with the provisions of this Article 15, a Debentureholder shall have the right, at such holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Debenture at any time prior to the close of business on the Business Day immediately preceding February 15, 2035 into cash and fully paid and shares of Class A Common Stock, if any, at a rate (the “Conversion Rate”) of 9.7282 shares of Class A Common Stock (subject to adjustment as provided in this Indenture) per $1,000 principal amount of Debenture (the “Conversion Obligation”); provided that, prior to the close of business on the Business Day immediately preceding February 15, 2009 holders may convert their Debentures only as described below:

(i) during the five Business Day period immediately after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Debentures for each day of such Measurement Period was less than 103% of the product of the Last Reported Sale Price on such date and the Conversion Rate on such date, all as determined by the Trustee, as provided below.

(ii) as provided in Section 15.01(b), Section 15.01(c), and Section 15.01(d).

The Trustee shall not determine the Trading Price of the Debentures unless requested by the Company to do so in writing, and the Company shall have no obligation to make such request unless a Debentureholder provides the Company with reasonable evidence that the Trading Price of the Debentures would be less than 103% of the product of (a) the then-applicable Conversion Rate of the Debentures and (b) the Last Reported Sale Price at such time, at which time the Company shall instruct the Trustee to determine the Trading Price of the Debentures beginning on the next Trading Day and on each successive Trading Day until the Trading Price per Debenture is greater than or equal to 103% of the product of (a) the then-applicable Conversion Rate of the Debentures and (b) the Last Reported Sale Price on such date.

If the condition set forth in Section 15.01(a)(i) above has been met, the Company shall so notify the Debentureholders. If after the condition in Section 15.01(a)(i) has been met, the Trading Price per $1,000 principal amount of Debentures is greater than 103% of the product of the Last Reported Sale Price of Class A Common Stock and the Conversion Rate for such date, the Company shall so notify the Debentureholders. The Company shall disseminate a press release through Dow Jones & Company, Inc. or Bloomberg Business News

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stating that the condition in Section 15.01(a)(i) has been met or ceased to be met (or publish the information on its website or through such other public medium it may use at that time).

“Trading Price” means, with respect to each $1,000 principal amount of Debentures (as used in this definition, a “Debenture”) as of any date (each such date a “date of determination”), the average of the secondary market bid quotations per Debenture obtained by the Trustee for $2,000,000 principal amount of Debentures at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that if three such bids cannot reasonably be obtained by the trustee, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Trustee, that one bid shall be used. If the Trustee cannot reasonably obtain at least one such bid for $2,000,000 principal amount of Debentures from a nationally recognized securities dealer, then the Trading Price of a Debenture will be deemed to be less than 103% of the product of (a) the then-applicable Conversion Rate of the Debentures and (b) the Last Reported Sale Price on such date of determination.

(b) In the event that:

(i) the Company distributes to all holders of Class A Common Stock rights entitling them to purchase, for a period expiring within 45 days after such distribution, Class A Common Stock at less than the average of the Last Reported Sale Prices of Class A Common Stock for the 10 Trading Days preceding the announcement of such distribution; or

(ii) the Company distributes to all holders of Common Stock assets or debt securities of the Company or rights to purchase the Company’s securities, which distribution has a per share value exceeding 10% of the Last Reported Sale Price of the Class A Common Stock on the Trading Day immediately preceding the date of declaration of such distribution,

then, in each case, the Debentures may be surrendered for conversion at any time on and after the date that the Company gives notice to the holders of such right, which shall be not less than 20 days prior to the Ex-Dividend Date for such distribution, until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date or the date the Company announces that such distribution will not take place. Notwithstanding the foregoing, the Debentures will not be convertible pursuant to clauses (i) or (ii) above if the Company provides that Debentureholders shall participate in such distribution without conversion.

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(c) In the event that the Company is party to a consolidation, merger, binding share exchange or sale or transfer of all or substantially all of the Company’s assets, in each case pursuant to which the Class A Common Stock would be converted into cash, securities or other property, a Debentureholder may surrender Debentures for conversion at any time from and after the date that is 15 days prior to the anticipated effective date of the transaction until 15 days after the actual date of such transaction, unless such transaction occurs on or prior to February 15, 2010 and also constitutes a Change of Control (regardless of whether such transaction is excluded from the definition pursuant to the penultimate paragraph thereof) (in which case the Debentures will instead be convertible in accordance with Section 15.01(d) below). The Company shall notify Debentureholders and the Trustee (whether or not such transaction also constitutes a Change of Control) at the same time the Company publicly announces such transaction (but in no event less than 15 days prior to the effective date of such transaction). Following the effective date of such transaction, the right to convert the Debentures at the Conversion Rate, and the settlement thereof, shall be modified as set forth under Section 15.05.

(d)(i) In the event that a Change of Control (regardless of whether such transaction is excluded from the definition pursuant to the penultimate paragraph thereof and disregarding for this purpose the exception set forth in clause (ii)(B) of the definition of Change of Control) occurs on or prior to February 15, 2010, a Debentureholder may surrender Debentures for conversion at any time from and after the date that is 15 days before the anticipated effective date of such Change of Control until the Designated Event Repurchase Date relating to such Change of Control. The Company shall give notice to all record Debentureholders and the Trustee at least 20 Trading Days prior to the anticipated effective date of any such Change of Control. Such notice will also specify whether the Company made the election specified in Section 15.01(e)(i) hereof.

(ii) If a Debentureholder elects to convert Debentures in connection with a Change of Control (disregarding for this purpose the exception set forth in clause (ii)(B) of the definition of Change of Control) pursuant to this subsection at any time from and after the date that is 15 days prior to the anticipated effective date of the transaction until 15 days after the actual date of such transaction, the Conversion Rate for such converting Debentureholder shall be increased by an additional number of shares of Common Stock (the “Additional Shares”) as described below.

The number of Additional Shares shall be determined by reference to the table attached as Schedule A hereto, based on the effective date of such Change of Control transaction (the “Effective Date”) and the Stock Price; provided that if the Stock Price is between two Stock Price amounts in the table or such Effective Date is between two Effective Dates in the table, the number of Additional Shares

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shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower Stock Price amounts and the two nearest Effective Dates, as applicable, based on a 365-day year; provided further that if the Stock Price is above $300.00 per share of Common Stock (subject to adjustment), no Additional Shares will be added to the Conversion Rate; and provided that if the Stock Price is below $77.58 per share (subject to adjustment), no Additional Shares will be added to the Conversion Rate.

The Stock Prices set forth in the first row of the table in Schedule A hereto shall be adjusted as of any date on which the Conversion Rate of the Debentures is adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares within the table shall be adjusted in the same manner as the Conversion Rate as set forth in Section 15.03 (other than by operation of an adjustment to the Conversion Rate by adding Additional Shares).

Notwithstanding the foregoing, in no event shall the total number of shares of Common Stock issuable upon conversion exceed 12.8882 shares per $1,000 principal amount of Debentures, subject to adjustment in the same manner as the Conversion Rate as set forth in Section 15.03.

Any conversion of Debentures in connection with a Change of Control as provided in this subsection, and the settlement thereof, shall be as set forth in Section 15.05.

(e) Notwithstanding the foregoing, and in lieu of adjusting the Conversion Rate as set forth in Section 15.01(a)(ii), in the case of a Public Acquirer Change of Control, the Company may elect that, from and after the Effective Date of such Public Acquirer Change of Control, the right to convert a Debenture will be changed into a right to convert a Debenture into a number of shares of Acquirer Common Stock specified below. The Conversion Rate on and following the Effective Date of such Public Acquirer Change of Control shall be a number of shares of Acquirer Common Stock equal to the product of:

(i) the Conversion Rate in effect immediately prior to the Effective Date of such Public Acquirer Change of Control, times

(ii) the average of the quotients obtained, for each Trading Day in the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Effective Date of such Public Acquirer Change of Control (the “Valuation Period”), of:

(A) the Acquisition Value of Class A Common Stock on each such Trading Day in the Valuation Period, divided by

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(B) the Last Reported Sale Price of the Acquirer Common Stock on each such Trading Day in the Valuation Period.

Section 15.02. Conversion Procedure.

(a) Upon conversion of any Debenture, subject to this Section 15.02 and Section 15.01 and Section 15.05, the Company shall satisfy the Conversion Obligation with respect to such Debenture by payment and delivery of cash and, if applicable, shares of Class A Common Stock, the aggregate value of which (the “Conversion Value”) shall be equal to the product of:

(i)(A) the aggregate principal amount of Debentures to be converted divided by 1,000 multiplied by (B) the then applicable Conversion Rate (plus Additional Shares, if any); and

(ii) the average of the daily Volume Weighted Average Price of Class A Common Stock for each of the ten consecutive Trading Days (appropriately adjusted to take into account the occurrence during such period of stock splits and similar events) beginning on the second Trading Day immediately following the day the Debentures are tendered for conversion (the “Ten Day Weighted Average Price”).

(b) The Company shall deliver the Conversion Value to converting holders as follows:

(i) an amount in cash (the “Principal Return”) equal to the lesser of (A) the Conversion Value of the Debentures to be converted and (B) the aggregate principal amount of the Debentures to be converted;

(ii) if the Conversion Value of the Debentures to be converted is greater than the Principal Return, an amount in whole shares of Class A Common Stock (the “Net Shares”), determined as set forth below, equal to such aggregate Conversion Value less the Principal Return (the “Net Share Amount”); and

(iii) an amount in cash, in lieu of any fractional shares of Class A Common Stock as set forth below.

The number of Net Shares to be paid shall be determined by dividing the Net Share Amount by the Ten Day Weighted Average Price. Debentureholders will not receive fractional shares upon conversion of Debentures. In lieu of

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fractional shares, holders will receive cash for the value of the fractional shares, which cash payment shall be based on the Ten Day Weighted Average Price.

The Conversion Value, Principal Return, number of Net Shares and Net Share Amount shall be determined by the Company at the end of the ten consecutive Trading Day period (the “Determination Date”) beginning on the second Trading Day immediately following the day the Debentures are tendered for conversion; provided that with respect to any Debentures surrendered for conversion pursuant to Section 15.01(d) above, the Determination Date shall be the last Trading Day in the period on which the applicable Stock Price is determined (pursuant to the definition thereof) in connection with the determination of Additional Shares, if any, to be added to the Conversion Rate.

(c) Before any holder of a Debenture shall be entitled to convert the same as set forth above, such holder shall (1) in the case of a Global Debenture, comply with the procedures of the Depositary in effect at that time and furnish appropriate endorsement and transfer documents, and (2) in the case of a Debenture issued in certificated form, surrender such Debentures, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, and give irrevocable written notice to the Conversion Agent in the form on the reverse of such certificated Debenture (or a facsimile thereof) (a “Notice of Conversion”) at said office or place that such holder elects to convert the same and shall state in writing therein the principal amount of Debentures to be converted and the name or names (with addresses) in which such holder wishes the certificate or certificates for the Net Shares, if any, included upon settlement the Conversion Obligation, if any, to be registered. No Notice of Conversion with respect to any Debentures may be tendered by a holder thereof if such holder has also tendered a Repurchase Notice or Designated Event Repurchase Notice and not validly withdrawn such Repurchase Notice or Designated Event Repurchase Notice in accordance with Section 16.03.

If more than one Debenture shall be surrendered for conversion at one time by the same holder, the Conversion Obligation with respect to such Debentures, if any, that shall be payable upon conversion shall be computed on the basis of the aggregate principal amount of the Debentures (or specified portions thereof to the extent permitted thereby) so surrendered.

(d) A Debenture shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that is the later of: (i) the date the holder has complied with the requirements set forth in clause (c) above or (ii) the Determination Date. Payment of the cash and Net Shares, if any, in satisfaction of the Conversion Obligation shall be made by the Company promptly following the Determination Date, but in no event later than three Business Days thereafter (the “Conversion Settlement Date”) by paying in cash

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the Principal Return (together with any cash in lieu of fractional shares) to the holder of a Debenture surrendered for conversion, or such holder’s nominee or nominees, and issue, or cause to be issued, and deliver to the Conversion Agent or to such holder, or such holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the number of full shares of Class A Common Stock equal to the Net Shares, if any, to which such holder shall be entitled as part of such Conversion Obligation.

(e) In case any Debenture shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the holder of the Debenture so surrendered, without charge to such holder, a new Debenture or Debentures in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Debentures.

(f) If a holder submits a Debenture for conversion, the Company shall pay all stamp and other duties, if any, which may be imposed by the United States or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of shares of Class A Common Stock, if any, upon the conversion. However, the holder shall pay any such tax which is due because the holder requests any Net Shares to be issued in a name other than the holder’s name. The Trustee may refuse to deliver the certificates representing the shares of Class A Common Stock being issued in a name other than the holder’s name until the Trustee receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the holder’s name. Nothing herein shall preclude any tax withholding required by law or regulations.

(g) Except as provided in Section 15.03, no adjustment shall be made for dividends on any shares issued upon the conversion of any Debenture as provided in this Article.

(h) Upon the conversion of an interest in a Global Debenture, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Debenture as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Debentures effected through any Conversion Agent other than the Trustee.

(i) (i) Debentureholders at the close of business on a record date will receive payment of interest payable on the corresponding interest payment date notwithstanding the conversion of such Debentures at any time after the close of business on such record date. Debentures surrendered for conversion during the period from the close of business on any record date to the opening of business on the corresponding interest payment date must be accompanied by payment of an amount equal to the interest that the holder is to receive on the Debentures; provided, however, that no such payment need be made (1) if the Company has

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specified a Redemption Date that is after a record date but on or prior to the next interest payment date, (2) if the Company has specified a Repurchase Date following a Designated Event that is after a record date but on or prior to the next succeeding interest payment date or (3) to the extent of any overdue interest, overdue Contingent Interest or Liquidated Damages, if any, at the time of conversion with respect to such Debenture. Except as described above, no payment or adjustment will be made for accrued interest on converted Debentures.

(ii) The Person in whose name the certificate for such shares of Class A Common Stock is registered shall be treated as a stockholder of record on and after the Conversion Date; provided, however, that no surrender of Debentures on any date when the stock transfer books of the Company shall be closed shall be effective to constitute the Person or Persons entitled to receive the shares of Class A Common Stock upon such conversion as the record holder or holders of such shares of Class A Common Stock on such date, but such surrender shall be effective to constitute the Person or Persons entitled to receive such shares of Class A Common Stock as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open; such conversion shall be at the Conversion Rate in effect on the date that such Debentures shall have been surrendered for conversion, as if the stock transfer books of the Company had not been closed. Upon conversion of Debentures, such Person shall no longer be a Debentureholder.

Section 15.03. Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company as follows:

(a) In case the Company shall hereafter pay a dividend or make a distribution to all holders of the outstanding Class A Common Stock in shares of Class A Common Stock, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect at the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution by a fraction,

(i) the numerator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the close of business on the date fixed for the determination of stockholders entitled to receive such dividend or other distribution plus the total number of shares of Class A Common Stock constituting such dividend or other distribution; and

(ii) the denominator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the date fixed for such determination,

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such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. If any dividend or distribution of the type described in this Section 15.03(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(b) In case the Company shall issue rights or warrants to all holders of its outstanding shares of Class A Common Stock entitling them (for a period expiring within forty-five (45) days after the record date fixed for such issuance) to subscribe for or purchase shares of Class A Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) Trading Days immediately preceding the declaration date for such distribution, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the declaration date for such distribution by a fraction,

(i) the numerator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the declaration date for such distribution plus the total number of additional shares of Class A Common Stock offered for subscription or purchase, and

(ii) the denominator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the close of business on the declaration date for such distribution plus the number of shares that the aggregate offering price of the total number of shares so offered would purchase at a price equal to the average of the Last Reported Sale Prices of the Class A Common Stock for the 10 Trading Days immediately preceding the declaration date for such distribution.

Such adjustment shall be successively made whenever any such rights or warrants are issued, and shall become effective immediately after the opening of business on the day following the declaration date for such distribution. To the extent that shares of Class A Common Stock are not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Class A Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such declaration date for such distribution had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Class A Common Stock at a price less than the average of the Last Reported Sale Prices of the Class A Common Stock for the 10 Trading Days immediately preceding the declaration date for such distribution, and in determining the aggregate offering price of such shares of Class A Common Stock, there shall be taken into account any consideration received by

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the Company for such rights or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

(c) In case outstanding shares of Class A Common Stock shall be subdivided into a greater number of shares of Class A Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Class A Common Stock shall be combined into a smaller number of shares of Class A Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(d) In case the Company shall, by dividend or otherwise, distribute to all holders of its Class A Common Stock shares of any class of Capital Stock of the Company or evidences of its indebtedness, cash or other assets (including securities, but excluding (1) any Class A Common Stock, rights or warrants referred to in Section 15.03(a) or Section 15.03(b), (2) dividends and distributions (A) in connection with the liquidation, dissolution or winding up of the Company or (B) paid exclusively in cash and (3) any Capital Stock, evidences of indebtedness, cash or assets distributed upon a merger or consolidation to which Section 15.05 applies) (any of such shares of Capital Stock, indebtedness, cash (excluding any such cash dividends to the extent that the amount of such cash together with any cash dividends paid on the Class A Common Stock during the quarter in which the distribution referred to in Section 15.03(e) occurs, do not exceed the Dividend Threshold Amount) or other property hereinafter in this Section 15.03(d)) called the “Distributed Property”)), then, in each such case (unless the Company distributes such Distributed Property for distribution to the Debentureholders on such dividend or distribution date (as if each Debentureholder had converted such Debenture entirely into Class A Common Stock immediately prior to the Record Date (as defined in Section 15.03(h)(iii) for such distribution or dividend of Distributed Property)) the Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,

(i) the numerator of which shall be the Current Market Price on such Record Date; and

(ii) the denominator of which shall be the Current Market Price on such Record Date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive, and

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described in a resolution of the Board of Directors) on the Record Date of the portion of the Distributed Property so distributed applicable to one share of Class A Common Stock,

such adjustment to become effective immediately prior to the opening of business on the day following such Record Date; provided that if the then fair market value (as so determined) of the portion of the Distributed Property so distributed applicable to one share of Class A Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Debentureholder shall have the right to receive upon conversion the amount of Distributed Property such holder would have received had such holder converted each Debenture entirely into Class A Common Stock on the Record Date. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 15.03(d) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price on the applicable Record Date.

Notwithstanding the foregoing, if the Distributed Property distributed by the Company to all holders of its Class A Common Stock consist of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Company, the Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,

(i) the numerator of which shall be the sum of (A) the average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date plus (B) the fair market value of the securities distributed in respect of each share of Class A Common Stock for which this Section 15.03(d) applies, which shall equal the number of securities distributed in respect of each share of Class A Common Stock multiplied by the average of the Last Reported Sale Prices of those securities distributed for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date; and

(ii) the denominator of which shall be the average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date,

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such adjustment to become effective immediately prior to the opening of business on the day following such Record Date; provided that the Company may in lieu of the foregoing adjustment make adequate provision so that each Debentureholder shall have the right to receive upon conversion the amount of Distributed Property such holder would have received had such holder converted its Debentures entirely into Class A Common Stock on the Record Date with respect to such distribution.

Rights or warrants distributed by the Company to all holders of Class A Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company’s Capital Stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of Class A Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Class A Common Stock, shall be deemed not to have been distributed for purposes of this Section 15.03 (and no adjustment to the Conversion Rate under this Section 15.03 will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 15.03(d). If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 15.03 was made, (1) in the case of any such rights or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Class A Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Class A Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

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For purposes of this Section 15.03(d), Section 15.03(a), and Section 15.03(b), any dividend or distribution to which this Section 15.03(d) is applicable that also includes shares of Class A Common Stock, or rights or warrants to subscribe for or purchase shares of Class A Common Stock to which Section 15.03(b) applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock other than such shares of Class A Common Stock or rights or warrants to which Section 15.03(b) applies (and any Conversion Rate adjustment required by this Section 15.03(d) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Class A Common Stock or such rights or warrants (and any further Conversion Rate adjustment required by Section 15.03(a) and Section 15.03(b) with respect to such dividend or distribution shall then be made), except (A) the Record Date of such dividend or distribution shall be substituted as “the date fixed for the determination of stockholders entitled to receive such dividend or other distribution”, “the date fixed for the determination of stockholders entitled to receive such rights or warrants” and “the date fixed for such determination” within the meaning of Section 15.03(a) and Section 15.03(b) and (B) any shares of Class A Common Stock included in such dividend or distribution shall not be deemed “outstanding at the close of business on the date fixed for such determination” within the meaning of Section 15.03(a).

(e) In case the Company shall, by dividend or otherwise, distribute cash to all holders of its Class A Common Stock (excluding (I) any dividend or distribution in connection with the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or (II) any cash dividends paid on the Class A Common Stock to the extent that the aggregate cash dividends per share of Class A Common Stock in such quarter, together with the amount of cash, if any, excluded from the definition of Distributed Property with respect to any distribution referred to in Section 15.03(d) occurring in such quarter, do not exceed $0.30, subject to adjustment as set forth below (the “Dividend Threshold Amount”)) then the Conversion Rate shall be adjusted by multiplying the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution by a fraction,

(i) the numerator of which shall be the Current Market Price on such record date minus the Dividend Threshold Amount; and

(ii) the denominator of which shall be the Current Market Price on such record date minus the amount of cash so distributed applicable to one share of Class A Common Stock,

such adjustment to be effective immediately prior to the opening of business on the day following the record date; provided that if the portion of the cash so distributed applicable to one share of Class A Common Stock is equal to or

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greater than the Current Market Price on the record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Debentureholder shall have the right to receive upon conversion of a Debenture (or any portion thereof) the amount of cash such holder would have received had such holder converted such Debenture (or portion thereof) entirely into Class A Common Stock on the Record Date. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

The Dividend Threshold Amount shall be subject to adjustments from time to time in a manner inversely proportional to adjustments to the Conversion Rate, provided that following any transaction or event described in Section 15.05 as a result of which the Debentures are convertible, into property that includes shares of Common Stock other than Class A Common Stock, the Dividend Threshold Amount will be the Dividend Threshold Amount immediately prior to the effective date of such transaction or event multiplied by a fraction,

(x) the numerator of which shall be (A) if such shares of Common Stock are traded on a United States national or regional securities exchange or quoted on the Nasdaq National Market, the average of the Last Reported Sale Prices of such shares for the five Trading Day period commencing on the Trading Day immediately following such effective date and (B) otherwise, the fair market value of such shares as determined in good faith by the Board of Directors, and

(y) the denominator of which shall be the average of the Last Reported Sale Prices of the Class A Common Stock for the five Trading Day period ending on the Trading Day immediately preceding such effective date.

For the avoidance of doubt, for purposes of this Section 15.03(e), in the event of any reclassification of the Class A Common Stock, as a result of which the Debentures become convertible into more than one class of Common Stock, whether cash dividends or distributions in any quarter exceed the Dividend Threshold Amount shall be determined based on the aggregate cash dividends or distributions paid in such quarter on all classes of Common Stock into which the Debentures are convertible and if an adjustment to the Conversion Rate is required pursuant to this Section 15.03(e), references in this Section to one share of Class A Common Stock or to the Current Market Price or Last Reported Sale Price of one share of Class A Common Stock shall be deemed to refer to a unit or to the price of a unit consisting of the number of shares of each class of Common Stock into which the Debentures are then convertible equal to the numbers of shares of such class issued in respect of one share of Class A Common Stock in such reclassification. The above provisions of this paragraph shall similarly apply to successive reclassifications.

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(f) In case a tender or exchange offer made by the Company or any Subsidiary for all or any portion of the Class A Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders of consideration per share of Class A Common Stock having a Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) that as of the last time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) exceeds the Last Reported Sale Price of a share of Class A Common Stock on the Trading Day next succeeding the Expiration Time, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Expiration Time by a fraction,

(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted up to any such maximum, being referred to as the “Purchased Shares”) and (y) the product of the number of shares of Class A Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Last Reported Sale Price of a share of Class A Common Stock on the Trading Day next succeeding the Expiration Time, and

(ii) the denominator of which shall be the number of shares of Class A Common Stock outstanding (including any Purchased Shares) at the Expiration Time multiplied by the Last Reported Sale Price of a share of Class A Common Stock on the Trading Day next succeeding the Expiration Time,

such adjustment to become effective immediately prior to the opening of business on the day following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

(g) In case of a tender or exchange offer made by a Person other than the Company or any Subsidiary for an amount that increases the offeror’s ownership of Class A Common Stock to more than 25% of the Class A Common Stock outstanding and shall involve the payment by such Person of consideration per share of Class A Common Stock having a Fair Market Value (as determined

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by the Board of Directors, whose determination shall be conclusive, and described in a resolution of the Board of Directors) that as of the last time (the “Offer Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it shall have been amended) that exceeds the Closing Price of a share of Class A Common Stock on the Trading Day next succeeding the Offer Expiration Time, and in which, as of the Offer Expiration Time the Board of Directors is not recommending rejection of the offer, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Offer Expiration Time by a fraction

(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the “Accepted Purchased Shares”) and (y) the product of the number of shares of Class A Common Stock outstanding (less any Accepted Purchased Shares) at the Offer Expiration Time and the Last Reported Sale Price of a share of Class A Common Stock on the Trading Day next succeeding the Offer Expiration Time, and

(ii) the denominator of which shall be the number of shares of Class A Common Stock outstanding (including any Accepted Purchased Shares) at the Offer Expiration Time multiplied by the Last Reported Sale Price of a share of Class A Common Stock on the Trading Day next succeeding the Offer Expiration Time,

such adjustment to become effective immediately prior to the opening of business on the day following the Offer Expiration Time. If such Person is obligated to purchase shares pursuant to any such tender or exchange offer, but such Person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made. Notwithstanding the foregoing, the adjustment described in this Section 15.03(g) shall not be made if, as of the Offer Expiration Time, the offering documents with respect to such offer disclose a plan or intention to cause the Company to engage in any transaction described in Article 12.

(h) For purposes of this Section 15.03, the following terms shall have the meaning indicated:

(i) “Current Market Price” shall have the meaning set forth in Section 1.01, except that if another issuance, distribution, subdivision or

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combination to which Section 15.03 applies occurs during the period applicable for calculating “Current Market Price” pursuant to the definition thereof, “Current Market Price” shall be calculated for such period in a manner determined by the Board of Directors to reflect the impact of such issuance, distribution, subdivision or combination on the Last Reported Sale Price of the Class A Common Stock during such period.

(ii) “Fair Market Value” shall mean the amount which a willing buyer would pay a willing seller in an arm’s-length transaction.

(iii) “Record Date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Class A Common Stock have the right to receive any cash, securities or other property or in which the Class A Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

(i) The Company may make such increases in the Conversion Rate, in addition to those required by clauses (a), (b), (c), (d), (e), (f) or (g) of this Section 15.03 as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.

(j) To the extent permitted by applicable law, the Company from time to time may increase the Conversion Rate by any amount if the Board of Directors shall have made a determination that such increase would be in the best interests of the Company, which determination shall be conclusive. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the holder of each Debenture at his last address appearing on the Debenture register provided for in Section 2.06 a notice of the increase at least one full Business Day prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(k) All calculations under this Article 15 shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be. No adjustment shall be made for the Company’s issuance of rights to purchase Class A Common Stock pursuant to a Company plan for reinvestment of dividends or interest or for any issuance of Class A Common Stock or convertible or exchangeable securities or rights to

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purchase Common Stock or convertible or exchangeable securities, other than as provided in this Section 15.03. To the extent the Debentures become convertible into cash, assets, property or securities, no adjustment need be made thereafter upon the issuance of the cash, assets, property or such securities or upon the issuance of any cash, assets, property or securities that are issued upon exercise or conversion of any securities issued upon the conversion of the Debentures. Interest will not accrue on any cash into which the Debentures are convertible.

(l) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the holder of each Debenture at his last address appearing on the Debenture register provided for in Section 2.06 of this Indenture, within twenty (20) days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(m) In any case in which this Section 15.03 provides that an adjustment shall become effective immediately after (1) a record date or Record Date for an event, (2) the date fixed for the determination of stockholders entitled to receive a dividend or distribution pursuant to Section 15.03(a), (3) a date fixed for the determination of stockholders entitled to receive rights or warrants pursuant to Section 15.03(b), or (4) the Expiration Time or Offer Expiration Time, as the case may be, for any tender or exchange offer pursuant to Section 15.03(f) or Section 15.03(g), (each an “Adjustment Determination Date”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Debenture converted after such Adjustment Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 15.03. For purposes of this Section 15.03(m), the term “Adjustment Event” shall mean:

(i) in any case referred to in clause (1) hereof, the occurrence of such event,

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(ii) in any case referred to in clause (2) hereof, the date any such dividend or distribution is paid or made,

(iii) in any case referred to in clause (3) hereof, the date of expiration of such rights or warrants, and

(iv) in any case referred to in clause (4) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.

(n) For purposes of this Section 15.03, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Class A Common Stock held in the treasury of the Company.

Section 15.04 Shares to Be Fully Paid. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Class A Common Stock to provide for conversion of the Debentures from time to time as such Debentures are presented for conversion.

Section 15.05. Effect of Reclassification, Consolidation, Merger or Sale. If any of the following events occur, namely (i) any reclassification or change of the outstanding shares of Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a split, subdivision or combination), (ii) any consolidation, merger or combination of the Company with another Person as a result of which holders of Class A Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Class A Common Stock, or (iii) any sale or conveyance of all or substantially all of the properties and assets of the Company to any other Person as a result of which holders of Class A Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Class A Common Stock, then:

(a) the Company or the successor or purchasing corporation, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture if such supplemental indenture is then required to so comply) providing for the conversion and settlement of the Debentures as set forth in this Indenture. Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article or pursuant to Section 15.01(e), as the case may be. If, in the case of any such reclassification, change, consolidation, merger,

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combination, sale or conveyance, the Exchange Property includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the holders of the Debentures as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent required by the Board of Directors and practicable the provisions providing for the repurchase rights set forth in Article 16 herein.

In the event the Company shall execute a supplemental indenture pursuant to this Section 15.05, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefore, the kind or amount of shares of stock or other securities or property (including cash) that will constitute the Exchange Property after any such reclassification, change, combination, consolidation, merger, sale or conveyance, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Debentureholders.

(b) Notwithstanding the provisions of Section 15.02(a), and subject to the provisions of Section 15.01, including, without limitation, Section 15.01(e), the Conversion Value with respect to each $1,000 principal amount of Debentures tendered for conversion on or after the second Trading Day immediately preceding the effective date of any such transaction, shall be calculated (as provided in clause (d) below) based on the kind and amount of shares of stock and other securities or property or assets (including cash) or any combination thereof received upon such reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of Class A Common Stock holding, immediately prior to the transaction, a number of shares of Class A Common Stock equal to the Conversion Rate (plus Additional Shares, to the extent that the holder is entitled to Additional Shares in accordance with Section 15.01(d) upon conversion) immediately prior to such transaction (the “Exchange Property”), assuming such holder of Class A Common Stock did not exercise his rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each share of Class A Common Stock in respect of which such rights of election shall not have been exercised (“non-electing share”), then for the purposes of this Section 15.05 the kind and amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares).

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(c) The Conversion Value in respect of any Debentures tendered for conversion on or after the second Trading Day immediately preceding the effective date of any such transaction shall be equal to the average of the daily values of the Exchange Property pertaining to such Debentures as determined in the next sentence (the “Exchange Property Value”) for each of the ten consecutive Trading Days (appropriately adjusted to take into account the occurrence during such period of stock splits and similar events) beginning on the later of (A) the second Trading Day immediately following the day the Debentures are tendered for conversion and (B) the effective date of such transaction (the “Exchange Property Weighted Average Price”). For the purpose of determining the value of any Exchange Property:

(i) Any shares of common stock of the successor or purchasing corporation or any other corporation that are included in the Exchange Property shall be valued as set forth in Section 15.02 as if such shares were “Common Stock” using the procedures set forth in the definition of “Last Reported Sale Price” in Section 1.01; and

(ii) Any other property (other than cash) included in the Exchange Property shall be valued in good faith by the Board of Directors or by a New York Stock Exchange member firm selected by the Board of Directors.

(d) The Company shall deliver such Conversion Value to holders of Debentures so converted as follows:

(i) An amount equal to the Principal Return, determined as set forth in Section 15.02(b)(i); and

(ii) If the Conversion Value of the Debentures so converted is greater than the Principal Return, an amount of Exchange Property, determined as set forth below, equal to such aggregate Conversion Value less the Principal Return (the “Net Exchange Property Amount”).

The amount of Exchange Property to be delivered shall be determined by dividing the Net Exchange Property Amount by the Exchange Property Weighted Average Price. If the Exchange Property includes more than one kind of property, the amount of Exchange Property of each kind to be delivered shall be in the proportion that the Exchange Property Value of such kind of Exchange Property bears to the Exchange Property Value of all the Exchange Property. If the foregoing calculations would require the Company to deliver a fractional share or unit of Exchange Property to a holder of Debentures being converted, the Company shall deliver cash in lieu of such fractional share or unit based on its Exchange Property Weighted Average Price.

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(e) Notwithstanding clauses (b), (c) and (d) above, if the Debentures are tendered for conversion prior to the effective date of any such transaction pursuant to Section 15.01(d) above, and the Principal Return and Net Shares, if any, have been determined, but have not been delivered prior to the effective date of such transaction, then the Company shall (i) pay the Principal Return in cash and (ii) subject to Section 15.01(e), instead of delivering Net Shares, if applicable, deliver an amount of Exchange Property that a holder of Common Stock, holding, immediately prior to the transaction, a number of shares of Common Stock equal to the Net Shares, would receive, assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each non-electing share, then for the purposes of this Section 15.05 the kind and amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). If the foregoing calculations would require the Company to deliver a fractional share or unit of Exchange Property to a holder of Debenture being converted, the Company shall deliver cash in lieu of such fractional share or unit based on the Exchange Property Value (as so determined).

(f) Notwithstanding clauses (b), (c), (d) and (e) above, if Debentures are tendered for conversion at a time when neither of the ten day weighted averaging periods contemplated in clause (c) or clause (e) applies in full to the determination of the Conversion Value, then the Conversion Value and the amount of cash and Exchange Property comprising the Principal Return and the Net Shares will be determined proportionally, with the weighted average amount relating to the portion of the ten day period falling prior to the effective date being valued as contemplated by clause (e) and with the weighted average amount relating to the portion of that period falling on or after the effective date being valued as contemplated by clause (c).

(g) The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Debentureholder, at his address appearing on the Debenture register provided for in this Indenture, within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

(h) The above provisions of this Section shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances.

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Section 15.06. Certain Covenants.

(a) Before taking any action which would cause an adjustment reducing the Conversion Rate below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Debentures, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

The Company covenants that all shares of Common Stock issued upon conversion of Debentures will be fully paid and non-assessable by the Company and free from all taxes, liens and changes with respect to the issue thereof.

(b) The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Debentures hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, the Company will in good faith and as expeditiously as possible, to the extent then permitted by the rules and interpretations of the Commission (or any successor thereto), endeavor to secure such registration or approval, as the case may be.

(c) The Company further covenants that if at any time the Common Stock shall be listed on any other national securities exchange or automated quotation system the Company will, if permitted and required by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Debentures.

Section 15.07. Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Debentureholder to determine the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Debenture; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Without limiting the generality of the foregoing, neither the Trustee nor any

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Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 15.05 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Debentureholders upon the conversion of their Debentures after any event referred to in such Section 15.05 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 8.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

Section 15.08. Notice to Holders Prior to Certain Actions. In case:

(a) the Company shall declare a dividend (or any other distribution) on its Class A Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 15.03; or

(b) the Company shall authorize the granting to all of the holders of its Class A Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants; or

(c) of any reclassification of the Class A Common Stock of the Company (other than a subdivision or combination of its outstanding Class A Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any shareholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

the Company shall cause to be filed with the Trustee and to be mailed to each Debentureholder at his address appearing on the Debenture register, provided for in Section 2.06 of this Indenture, as promptly as possible but in any event at least ten days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Class A Common Stock of record shall be entitled to exchange their Class A Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall

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not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.

Section 15.09. Shareholder Rights Plans. Each share of Common Stock issued upon conversion of Debentures pursuant to this Article 15 shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any shareholder rights plan adopted by the Company, as the same may be amended from time to time. If at the time of conversion, however, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable shareholder rights agreement so that the holders of the Debentures would not be entitled to receive any rights in respect of Common Stock issuable upon conversion of the Debentures, the Conversion Rate will be adjusted as provided in Section 15.03(d).

ARTICLE 16

REPURCHASE OF DEBENTURES AT OPTION OF HOLDERS

Section 16.01. Repurchase at Option of Holders.

(a) Debentures shall be purchased by the Company at the option of the holder for cash on February 15, 2010, 2015, 2020, 2025, 2030, or the next Business Day after each such date if any such date is not a Business Day (each, a “Repurchase Date”), at a purchase price (the “Repurchase Price”) equal to 100% of the principal amount of the Debentures to be repurchased. The Company shall pay any accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, thereon to (but excluding) such Repurchase Date to the holders of such Debentures on the record date immediately preceding such Repurchase Date. Unless the Company has issued a notice of redemption to redeem the Debentures as set forth in Section 3.01, not later than 20 Business Days prior to any Repurchase Date, the Company shall mail a notice (the “Company Notice”) by first class mail to the Trustee and to each holder (and to beneficial owners as required by applicable law). The notice shall include a form of repurchase notice to be completed by a holder and shall state:

(i) the Repurchase Price and the Conversion Rate;

(ii) the name and address of the Paying Agent and the Conversion Agent;

(iii) that Debentures as to which a Repurchase Notice has been given may be converted if they are otherwise convertible only in accordance with Article 15 hereof and the terms of the Debentures if the

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applicable Repurchase Notice has been withdrawn in accordance with the terms of this Indenture;

(iv) that Debentures must be surrendered to the Paying Agent to collect payment;

(v) that the Repurchase Price for any Debenture as to which a Repurchase Notice has been given and not withdrawn will be paid promptly following the later of the Repurchase Date and the time of surrender of such Debenture as described in (iv);

(vi) the procedures the holder must follow to exercise its repurchase rights under this Section 16.01 and a brief description of those rights;

(vii) briefly, the conversion rights, if any, with respect to the Debentures;

(viii) the procedures for withdrawing a Repurchase Notice; and

(ix) the CUSIP number of the Securities.

At the Company’s request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Company Notice shall be prepared by the Company.

Purchases of Debentures hereunder shall be made, at the option of the holder thereof, upon:

(A) delivery to the Paying Agent by the holder of a written notice of repurchase (a “Repurchase Notice”) during the period beginning at any time from the opening of business on the date that is 20 Business Days prior to the relevant Repurchase Date until the close of business on the last Business Day prior to the Repurchase Date stating:

(1) the certificate number of the Debentures which the holder will deliver to be purchased or the appropriate Depositary procedures if certificated Debentures have not been issued for such Debenture,

(2) the portion of the principal amount of the Debenture which the holder will deliver to be purchased, which portion must be in principal amounts of $1,000 or an integral multiple of $1,000, and

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(3) that such Debenture shall be purchased by the Company as of the Repurchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture; and

(B) delivery of such Debenture to the Paying Agent at any time after delivery of the Repurchase Notice (together with all necessary endorsements) at the offices of the Paying Agent, such delivery being a condition to receipt by the holder of the Repurchase Price therefor; provided, however, that such Repurchase Price shall be so paid pursuant to this Section 16.01 only if the Debenture so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Repurchase Notice.

The Company shall purchase from the holder thereof, pursuant to this Section 16.01, a portion of a Debenture, if the principal amount of such portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to the purchase of all of a Debenture also apply to the purchase of such portion of such Debenture.

Any purchase by the Company contemplated pursuant to the provisions of this Section 16.01 shall be consummated by the delivery of the consideration to be received by the holder promptly following the later of the Repurchase Date and the time of delivery of the Debenture.

Notwithstanding anything herein to the contrary, any holder delivering to the Paying Agent the Repurchase Notice contemplated by this Section 16.01 shall have the right to withdraw such Repurchase Notice at any time prior to the close of business on the Business Day prior to the Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 16.03.

The Paying Agent shall promptly notify the Company of the receipt by it of any Repurchase Notice or written notice of withdrawal thereof.

(b) Notwithstanding the foregoing, no Debentures may be repurchased by the Company at the option of the holders if the principal amount of the Debentures has been accelerated, and such acceleration has not been rescinded, on or prior to the Repurchase Date.

Section 16.02. Repurchase at Option of Holders Upon a Designated Event.

(a) If there shall occur a Designated Event at any time prior to maturity of the Debentures, then each Debentureholder shall have the right, at such

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holder’s option, to require the Company to repurchase all of such holder’s Debentures for cash, or any portion thereof that is a multiple of $1,000 principal amount, on the date (the “Designated Event Repurchase Date”) specified by the Company that is not less than twenty (20) Business Days and not more than thirty five (35) Business Days after the date of the Designated Event Notice of such Designated Event at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, thereon to, but excluding, the Designated Event Repurchase Date (the “ Designated Event Repurchase Price”). If such Designated Event Repurchase Date falls after a record date for the payment of interest, Contingent Interest or Liquidated Damages and on or prior to the corresponding interest payment date, the Company shall instead pay the principal amount to the Debentureholders, and pay the full amount of accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, payable on such interest payment date to the holder of record on the close of business on the corresponding record date. Repurchases of Debentures under this Section 16.02 shall be made, at the option of the holder thereof, upon:

(i) delivery to the Trustee (or other Paying Agent appointed by the Company) by a holder of a duly completed notice (the “Designated Event Repurchase Notice”) in the form set forth on the reverse of the Debenture prior to the close of business on the Designated Event Repurchase Date; and

(ii) delivery or book-entry transfer of the Debentures to the Trustee (or other Paying Agent appointed by the Company) at any time after delivery of the Designated Event Repurchase Notice (together with all necessary endorsements) at the Corporate Trust Office of the Trustee (or other Paying Agent appointed by the Company) in the Borough of Manhattan, such delivery being a condition to receipt by the holder of the Designated Event Repurchase Price therefor; provided that such Designated Event Repurchase Price shall be so paid pursuant to this Section 16.02 only if the Debenture so delivered to the Trustee (or other Paying Agent appointed by the Company) shall conform in all respects to the description thereof in the related Designated Event Repurchase Notice.

Any purchase by the Company contemplated pursuant to the provisions of this Section 16.02 shall be consummated by the delivery of the consideration to be received by the holder promptly following the later of the Designated Event Repurchase Date and the time of the book-entry transfer or delivery of the Debenture.

Notwithstanding anything herein to the contrary, any holder delivering to the Trustee (or other Paying Agent appointed by the Company) the Designated

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Event Repurchase Notice contemplated by this Section 16.02 shall have the right to withdraw such Designated Event Repurchase Notice at any time prior to the close of business on the Designated Event Repurchase Date by delivery of a written notice of withdrawal to the Trustee (or other Paying Agent appointed by the Company) in accordance with Section 16.03 below.

The Trustee (or other Paying Agent appointed by the Company) shall promptly notify the Company of the receipt by it of any Designated Event Repurchase Notice or written notice of withdrawal thereof.

(b) On or before the fifteenth day after the occurrence of a Designated Event, the Company shall mail to all holders of record of the Debentures a notice (the “Designated Event Notice”) of the occurrence of such Designated Event and of the repurchase right at the option of the holders arising as a result thereof. Such mailing shall be by first class mail. The Company shall also deliver a copy of the Designated Event Notice to the Trustee and cause a copy of such Designated Event Notice, or a summary of the information contained therein, to be published once in a newspaper of general circulation in The City of New York. Concurrently with the mailing of any Designated Event Notice, the Company shall issue a press release announcing such Designated Event referred to in the Designated Event Notice, the form and content of which press release shall be determined by the Company in its sole discretion. The failure to issue any such press release or any defect therein shall not affect the validity of the Designated Event Notice or any proceedings for the repurchase of any Debenture that any Debentureholder may elect to have the Company repurchase as provided in this Section 16.02.

Each Designated Event Notice shall specify the circumstances constituting the Designated Event, the Designated Event Repurchase Date, the Designated Event Repurchase Price, that the holder must exercise the repurchase right on or prior to the close of business on the Designated Event Repurchase Date (the “Designated Event Expiration Time”), that the holder shall have the right to withdraw any Debentures surrendered prior to the Designated Event Expiration Time, a description of the procedure which a Debentureholder must follow to exercise such repurchase right and to withdraw any surrendered Debentures, the place or places where the holder is to surrender such holder’s Debentures and the CUSIP number or numbers of the Debentures (if then generally in use) and include a form of Designated Event Repurchase Notice.

No failure of the Company to give the foregoing notices and no defect therein shall limit the Debentureholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Debentures pursuant to this Section 16.02.

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(c) Notwithstanding the foregoing, no Debentures may be repurchased by the Company at the option of the holders upon a Designated Event if the principal amount of the Debentures has been accelerated, and such acceleration has not been rescinded, on or prior to the Designated Event Repurchase Date.

Section 16.03. Withdrawal of Repurchase Notice or Designated Event Repurchase Notice.

(a) A Repurchase Notice or Designated Event Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the Corporate Trust Office of the Trustee (or other Paying Agent appointed by the Company) in accordance with the Repurchase Notice or Designated Event Repurchase Notice at any time prior to the close of business on the Business Day prior to the Repurchase Date or prior to the close of business on the Designated Event Repurchase Date, specifying:

(i) the certificate number, if any, of the Debenture in respect of which such notice of withdrawal is being submitted, or the appropriate Depositary information if the Debenture in respect of which such notice of withdrawal is being submitted is represented by a Global Debenture,

(ii) the principal amount of the Debenture with respect to which such notice of withdrawal is being submitted, and

(iii) the principal amount, if any, of such Debenture that remains subject to the original Repurchase Notice or Designated Event Repurchase Notice.

Section 16.04. Deposit of Repurchase Price or Designated Event Repurchase Price.

(a) On or prior to the Repurchase Date or Designated Event Repurchase Date, the Company will deposit with the Trustee (or other Paying Agent appointed by the Company or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 5.04) an amount of money sufficient to repurchase on the Repurchase Date or Designated Event Repurchase Date all of the Debentures to be repurchased on such date at the appropriate Repurchase Price or Designated Event Repurchase Price; provided that if such payment is made on the Repurchase Date or Designated Event Repurchase Date it must be received by the Trustee or Paying Agent, as the case may be, by 10:00 a.m. New York City time, on such date. Subject to receipt of funds and/or Debentures by the Trustee (or other Paying Agent appointed by the Company), payment for Debentures surrendered for repurchase (and not withdrawn) prior to the Designated Event Expiration Time will be made promptly after the later of (x) the Repurchase Date or Designated Event Repurchase Date with respect to such Debenture (provided the holder has satisfied the conditions in

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Section 16.01 or Section 16.02, as applicable) and (y) the time of delivery of such Debenture to the Trustee (or other Paying Agent appointed by the Company) by the holder thereof in the manner required by Section 16.01 or Section 16.02, as applicable) by mailing checks for the amount payable to the holders of such Debentures entitled thereto as they shall appear in the Debenture Register, provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Repurchase Price or Designated Event Repurchase Price.

(b) If the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to repurchase on the Repurchase Date or Designated Event Repurchase Date all the Debentures or portions thereof that are to be purchased as of the Repurchase Date or Designated Event Repurchase Date, then on and after the Business Day following the Repurchase Date or Designated Event Repurchase Date (i) such Debentures will cease to be outstanding, (ii) interest, including Contingent Interest, if any, and Liquidated Damages, if any, will cease to accrue on such Debentures, and (iii) all other rights of the holders of such Debentures will terminate, whether or not book-entry transfer of the Debentures has been made or the Debentures have been delivered to the Trustee or Paying Agent, other than the right to receive the Repurchase Price or Designated Event Repurchase Price upon delivery of the Debentures.

Section 16.05. Covenant to Comply with Securities Laws.

When complying with the provisions of this Article 16 (if any offer or purchase is made and such offer or purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange Act, (ii) file a Schedule TO (or any successor schedule, form or report) under the Exchange Act and (iii) otherwise comply with any applicable federal and state securities laws so as to permit the rights and obligations under Article 16 to be exercised in the time and in the manner specified in this Article 16.

ARTICLE 17

MISCELLANEOUS PROVISIONS

Section 17.01. Provisions Binding on Company’s Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.

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Section 17.02. Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company.

Section 17.03. Addresses for Notices, Etc. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Debentureholders on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Trustee) to BlackRock, Inc., 40 East 52^nd Street, New York, NY 10022, Attention: Chief Financial Officer. Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to the Corporate Trust Office.

The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.

Any notice or communication mailed to a Debentureholder shall be mailed to him by first class mail, postage prepaid, at his address as it appears on the Debenture register and shall be sufficiently given to him if so mailed within the time prescribed.

Failure to mail a notice or communication to a Debentureholder or any defect in it shall not affect its sufficiency with respect to other Debentureholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

Section 17.04. Governing Law. THIS INDENTURE AND EACH DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.

Section 17.5. Evidence of Compliance with Conditions Precedent; Certificates to Trustee. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

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Each certificate or opinion provided for by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

Section 17.06. Legal Holidays. In any case where the date of maturity of interest on or principal of the Debentures or the date fixed for repurchase of any Debenture will not be a Business Day, then payment of such interest on or principal of the Debentures need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for repurchase, and no interest shall accrue for the period from and after such date.

Section 17.07. No Security Interest Created. Nothing in this Indenture or in the Debentures, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

Section 17.08. Trust Indenture Act. This Indenture is hereby made subject to, and shall be governed by, the provisions of the Trust Indenture Act required to be part of and to govern indentures qualified under the Trust Indenture Act; provided, however, that, unless otherwise required by law, notwithstanding the foregoing, this Indenture and the Debentures issued hereunder shall not be subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the Trust Indenture Act as now in effect as hereafter amended or modified; provided further that this Section 17.08 shall not require that this Indenture or the Trustee be qualified under the Trust Indenture Act prior to the time such qualification is in fact required under the terms of the Trust Indenture Act, nor shall it constitute any admission or acknowledgment by any party hereto that any such qualification is required prior to the time such qualification is in fact required under the terms of the Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in an indenture qualified under the Trust Indenture Act, such required provision shall control.

Section 17.09. Benefits of Indenture. Nothing in this Indenture or in the Debentures, expressed or implied, shall give to any person, other than the parties hereto, any Paying Agent, any authenticating agent, any Debenture registrar and

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their successors hereunder, the Debentureholders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 17.10. Table of Contents, Headings, Etc. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

Section 17.11. Authenticating Agent. The Trustee may appoint an authenticating agent which shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Debentures in connection with the original issuance thereof and transfers and exchanges of Debentures hereunder, including under Section 2.05, Section 2.06, Section 2.07, Section 2.08 and Section 3.06, as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Debentures. For all purposes of this Indenture, the authentication and delivery of Debentures by the authenticating agent shall be deemed to be authentication and delivery of such Debentures “by the Trustee” and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Debentures for the Trustee’s certificate of authentication. Such authenticating agent shall at all times be a person eligible to serve as trustee hereunder pursuant to Section 8.09.

Any corporation into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation.

Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee shall promptly appoint a successor authenticating agent (which may be the Trustee), shall give written notice of such appointment to the Company and shall mail notice of such appointment to all Debentureholders as the names and addresses of such holders appear on the Debenture register.

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The Company agrees to pay to the authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agent’s fees to be unreasonable.

The provisions of Section 8.02, Section 8.03, Section 8.04, Section 9.03 and this Section 17.11 shall be applicable to any authenticating agent.

Section 17.12. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 17.13. Tax Treatment of the Debentures. The Company agrees, and by acceptance of a beneficial interest in a Debenture each holder and any beneficial owner of a Debenture shall be deemed to agree, to treat, for United States federal income tax purposes, the Debentures as debt instruments that are subject to Treasury regulation section 1.1275-4 or any successor provision (the “contingent payment regulations”). For United States federal income tax purposes, the Company further agrees, and by acceptance of a beneficial interest in a Debenture each holder and any beneficial owner of a Debenture shall be deemed to agree (i) to treat the cash and the fair market value of any Common Stock received upon the conversion of a Debenture as a contingent payment for purposes of the contingent payment regulations, (ii) to accrue interest with respect to outstanding Debentures as original issue discount for United States federal income tax purposes (i.e. Tax Original Issue Discount) according to the “noncontingent bond method” set forth in the contingent payment regulations, using the comparable yield of 5.70% compounded semi-annually, and (iii) to be bound by the Company’s determination of the “projected payment schedule,” within the meaning of the contingent payment regulations, with respect to the Debentures. Holders or beneficial owners may obtain the issue price, amount of Tax Original Issue Discount, issue date, comparable yield and projected payment schedule, by submitting a written request for it to the Company at the following address: 40 East 52^nd Street, New York, NY 10022, Attention: Chief Financial Officer.

The Company acknowledges and agrees, and by acceptance of a beneficial interest in a Debenture each holder and any beneficial owner of a Debenture shall be deemed to acknowledge and agree, that (i) the comparable yield means the annual yield the Company would pay, as of the issue date, on a noncontingent, nonconvertible, fixed-rate debt instrument with terms and conditions otherwise similar to those of the Debentures and (ii) the comparable yield and the projected payment schedule that a holder or beneficial owner may obtain as described above do not constitute a representation by the Company regarding the actual amounts that will be paid on the Debentures or the value of the Common Stock into which the Debentures may be converted.

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.

BLACKROCK, INC.
By:	/s/    ROBERT P. CONNOLLY
Name:	Robert P. Connolly
Title:	Managing Director, General Counsel and Secretary

JPMORGAN CHASE BANK, N.A., as Trustee
By:	/s/    LARRY O’BRIEN
Name:	Larry O’Brien
Title:	Vice President

EXHIBIT A

[FORM OF FACE OF DEBENTURE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS DEBENTURE AND THE SHARES OF BLACKROCK, INC. (THE “COMPANY”) COMMON STOCK (“COMMON STOCK”) ISSUABLE UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NONE OF THIS DEBENTURE, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE OR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS DEBENTURE, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH DEBENTURE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THIS DEBENTURE (OR ANY PREDECESSOR OF SUCH DEBENTURE) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE DEBENTURES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM

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THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF THIS SECURITY IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.

[FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), THIS DEBENTURE IS BEING ISSUED WITH TAX ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE OF THIS DEBENTURE IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT, AND THE ISSUE DATE OF THIS DEBENTURE IS FEBRUARY 23, 2005. IN ADDITION, THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE CODE, THE COMPARABLE YIELD OF THIS DEBENTURE IS 5.70% COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR UNITED STATES FEDERAL INCOME TAX PURPOSES).

FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THE COMPANY AGREES, AND BY ACCEPTANCE OF A BENEFICIAL INTEREST IN THIS DEBENTURE EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS DEBENTURE SHALL BE DEEMED TO HAVE AGREED, (1) TO TREAT THIS DEBENTURE AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREASURY REGULATIONS SECTION 1.1275-4 OR ANY SUCCESSOR PROVISION (THE “CONTINGENT PAYMENT REGULATIONS”), (2) TO TREAT THE CASH AND THE FAIR MARKET VALUE OF ANY COMMON STOCK RECEIVED UPON CONVERSION OF THIS DEBENTURE AS A CONTINGENT PAYMENT FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, (3) TO ACCRUE INTEREST WITH RESPECT TO THIS DEBENTURE AS ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES ACCORDING TO THE “NONCONTINGENT BOND METHOD” SET FORTH IN THE CONTINGENT PAYMENT REGULATIONS AND (4) TO BE BOUND BY THE COMPANY’S DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT SCHEDULE,”

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EACH WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS SECURITY.

THE COMPANY AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS DEBENTURE, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO BLACKROCK, INC. AT THE FOLLOWING ADDRESS: 40 EAST 52^ND STREET, NEW YORK, NY 10022, ATTENTION: CHIEF FINANCIAL OFFICER.]

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BLACKROCK, INC.

2.625% Convertible Debentures due 2035

No. 1	$250,000,000
CUSIP No. 09247XAA9

BlackRock, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of Two Hundred Fifty Million Dollars (which amount may from time to time be increased or decreased to such other principal amounts (which, taken together with the principal amounts of all other outstanding Debentures, shall not exceed $250,000,000 in aggregate at any time)) by adjustments made on the records of the Trustee as set forth in Schedule B hereto, as Custodian of the Depositary, in accordance with the rules and procedures of the Depositary) on February 15, 2035, and Liquidated Damages in the manner, at the rates and to the persons set forth in the Registration Rights Agreement.

Payment of the principal of, interest, including any Contingent Interest, and any Liquidated Damages accrued on this Debenture shall be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, or, at the option of the holder of this Debenture, at the Corporate Trust Office, in such lawful money of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts; provided, however, interest, including Contingent Interest, if any, and Liquidated Damages, if any, may be paid by check mailed to such holder’s address as it appears in the Debenture register; provided further, however, that, with respect to any Debentureholder with an aggregate principal amount equal to or in excess of $2,000,000, at the request of such holder in writing to the Company, interest, including Contingent Interest, if any, and Liquidated Damages, if any, on such holder’s Debentures shall be paid by wire transfer in immediately available funds in accordance with the written wire transfer instruction supplied by such holder from time to time to the Trustee and Paying Agent (if different from the Trustee) at least two days prior to the applicable record date; provided that any payment to the Depositary or its nominee shall be paid by wire transfer in immediately available funds in accordance with the wire transfer instruction supplied by the Depositary or its nominee from time to time to the Trustee and Paying Agent (if different from Trustee) at least two days prior to the applicable record date.

Reference is made to the further provisions of this Debenture set forth on the reverse hereof, including, without limitation, provisions giving the holder of this Debenture the right to convert this Debenture into cash and Class A Common Stock of the Company on the terms and subject to the limitations referred to on

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the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Debenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed by the laws of said State (without regard to the conflicts of laws provisions thereof).

This Debenture shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed.

BLACKROCK, INC.
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION JPMORGAN CHASE BANK, N.A.,
as Trustee, certifies that this is one of the Debentures described in the within-named Indenture.

By:

Authorized Officer

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[FORM OF REVERSE OF DEBENTURE]

BLACKROCK, INC.

2.625% Convertible Debentures due 2035

This Debenture is one of a duly authorized issue of Debentures of the Company, designated as its 2.625% Convertible Debentures due 2035 (herein called the “Debentures”), limited to the aggregate principal amount of $250,000,000 all issued or to be issued under and pursuant to an Indenture dated as of February 23, 2005 (herein called the “Indenture”), between the Company and JPMorgan Chase Bank, N.A. (herein called the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debentures. Additional Debentures may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.

In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of, premium, if any, and interest, including Contingent Interest, if any, and Liquidated Damages, if any, on all Debentures may be declared, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

The Company shall pay additional interest (“Contingent Interest”) to the Debentureholders for the periods, at the rates and subject to the conditions set forth in the Indenture. The Company will pay Contingent Interest, if any, in the same manner and at the same time as it will pay interest as described above.

Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Redemption Price, Repurchase Price, and the principal amount on the maturity date, as the case may be, to the holder who surrenders a Debenture to a Paying Agent to collect such payments in respect of the Debenture. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the holders of the Debentures, and in other circumstances, with the consent of the holders of not less than a majority in aggregate principal amount of the Debentures at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Debentures; provided, however, that no such supplemental indenture shall make any of the changes set forth in

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Section 11.02 of the Indenture, without the consent of the holders of all Debentures then outstanding. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of the Debentures, the holders of a majority in aggregate principal amount of the Debentures at the time outstanding may on behalf of the holders of all of the Debentures waive any past default or Event of Default under the Indenture and its consequences except as provided in the Indenture. Any such consent or waiver by the holder of this Debenture (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Debenture and any Debentures which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Debenture or such other Debentures.

No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on this Debenture at the place, at the respective times, at the rate and in the lawful money herein prescribed.

The Debentures are issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, without payment of any service charge but with payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration or exchange of Debentures, Debentures may be exchanged for a like aggregate principal amount of Debentures of other authorized denominations.

The Debentures are not subject to redemption through the operation of any sinking fund. Prior to February 20, 2010, the Debentures will not be redeemable at the Company’s option. Subject to the terms and conditions of the Indenture, beginning on February 20, 2010, the Company, at its option, may redeem the Debentures for cash at any time as a whole, or from time to time in part, at a price equal to the principal amount of the Debentures redeemed plus accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, on the Debentures redeemed to (but excluding) the Redemption Date.

Subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the holder, all or any portion of Debentures held by such holder on February 15, 2010, 2015, 2020, 2025 and 2030, in integral multiples of $1,000 at a Repurchase Price equal to the principal amount of the Debentures repurchased plus accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, on the Debentures repurchased to (but excluding) the Repurchase Date.

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Upon the occurrence of a “Designated Event,” the holder has the right, at such holder’s option, to require the Company to repurchase all of such holder’s Debentures or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Designated Event Purchase Date at a price equal to 100% of the principal amount of the Debentures such holder elects to require the Company to repurchase, together with accrued and unpaid interest, including Contingent Interest, if any, and accrued and unpaid Liquidated Damages, if any, to but excluding the date fixed for repurchase. The Company or, at the written request of the Company, the Trustee shall mail to all holders of record of the Debentures a notice of the occurrence of a Designated Event and of the repurchase right arising as a result thereof on or before the fifteenth calendar day after the occurrence of such Designated Event.

Subject to the provisions of the Indenture, the holder hereof has the right, at its option, upon the occurrence of certain conditions specified in the Indenture and prior to the close of business on the business day immediately preceding February 15, 2035, to convert any Debentures or portion thereof which is $1,000 or an integral multiple thereof, into cash and, if applicable, shares of Class A Common Stock, at a Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture, upon surrender of this Debenture, together with a conversion notice as provided in the Indenture and this Debenture, to the Company at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, or at the option of such holder, the Corporate Trust Office, and, unless the shares issuable on conversion are to be issued in the same name as this Debenture, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or by his duly authorized attorney. The initial Conversion Rate shall be 9.7282 shares for each $1,000 principal amount of Debentures. No fractional shares of Common Stock will be issued upon any conversion, but an adjustment in cash will be paid to the holder, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Debenture or Debentures for conversion. No adjustment shall be made for dividends or any shares issued upon conversion of such Debenture except as provided in the Indenture.

Upon due presentment for registration of transfer of this Debenture at the office or agency of the Company in the Borough of Manhattan, The City of New York, a new Debenture or Debentures of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange thereof, subject to the limitations provided in the Indenture, without charge except for any tax, assessments or other governmental charge imposed in connection therewith.

The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Debenture registrar may deem and treat the registered holder hereof as the absolute owner of this Debenture (whether or not this Debenture shall be overdue and notwithstanding any notation of ownership or

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other writing hereon), for the purpose of receiving payment hereof, or on account hereof, for the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any other authenticating agent nor any Paying Agent nor any other Conversion Agent nor any Debenture registrar shall be affected by any notice to the contrary. Notwithstanding the foregoing, the Indenture provides that following an event which, after notice or passage of time or both, would become a Default, owners of beneficial interests in a Global Debenture may directly enforce against the Company such owners’ right to exchange such beneficial interest for Debentures in certificated form. All payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for monies payable on this Debenture.

No recourse for the payment of the principal of or any premium or accrued and unpaid interest, including Contingent Interest, if any, or Liquidated Damages, if any, on this Debenture, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

Terms used in this Debenture and defined in the Indenture are used herein as therein defined.

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ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Debenture, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in common	UNIF GIFT MIN ACT
	____________________	Custodian
	(Cust)
TEN ENT - as tenants by the entireties	____________________
	(Minor)

JT TEN - as joint tenants with right of survivorship and not as tenants in common Uniform Gifts to Minors Act                          (State)

Additional abbreviations may also be used

though not in the above list.

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EXHIBIT B

[FORM OF CONVERSION NOTICE]

To: BlackRock, Inc.

The undersigned registered owner of this Debenture hereby irrevocably exercises the option to convert this Debenture, or the portion hereof (which is $1,000 principal amount or an integral multiple thereof) below designated, into cash and shares of Class A Common Stock, if any, in accordance with the terms of the Indenture referred to in this Debenture, and directs that the shares issuable and deliverable upon such conversion, if any, together with any check in payment of the Principal Return (as defined in the Indenture) and for fractional shares and any Debentures representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares or any portion of this Debenture not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid to the undersigned on account of interest accompanies this Debenture.

Dated:                     

Signature(s)

Signature Guarantee

Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or Debentures to be delivered, other than to and in the name of the registered holder.

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Fill in for registration of shares if to be issued, and Debentures if to be delivered, other than to and in the name of the registered holder:

(Name)

(Street Address)

(City, State and Zip Code)

Please print name and address

Principal amount to be converted (if less than all): $            ,000

Social Security or Other Taxpayer Identification Number

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EXHIBIT C

[FORM OF OPTION TO ELECT REPAYMENT

UPON A DESIGNATED EVENT]

To: BlackRock, Inc.

The undersigned registered owner of this Debenture hereby acknowledges receipt of a notice from BlackRock, Inc. (the “Company”) as to the occurrence of a Designated Event with respect to the Company and requests and instructs the Company to repay the entire principal amount of this Debenture, or the portion thereof (which is $1,000 principal amount or an integral multiple thereof) below designated, in accordance with the terms of the Indenture referred to in this Debenture, together with accrued and unpaid interest, including Contingent Interest, if any, and Liquidated Damages, if any, to, but excluding, such date, to the registered holder hereof.

Dated:                     

Signature(s)

Social Security or Other Taxpayer Identification Number Principal amount to be repaid (if less than all): $            ,000

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Debenture in every particular without alteration or enlargement or any change whatever.

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EXHIBIT D

[FORM OF OPTION TO ELECT REPAYMENT

ON A REPURCHASE DATE]

To: BlackRock, Inc.

The undersigned registered owner of this Debenture hereby requests and instructs BlackRock, Inc. to repay the entire principal amount of this Debenture, or the portion thereof (which is $1,000 principal amount or an integral multiple thereof) below designated, in accordance with the terms of the Indenture referred to in this Debenture to the registered holder hereof.

Dated:                     

Signature(s)

Social Security or Other Taxpayer Identification Number Principal amount to be repaid (if less than all): $            ,000

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Debenture in every particular without alteration or enlargement or any change whatever.

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EXHIBIT E

[FORM OF ASSIGNMENT AND TRANSFER]

For value received                                  hereby sell(s), assign(s) and transfer(s) unto                      (Please insert social security or Taxpayer Identification Number of assignee) the within Debenture, and hereby irrevocably constitutes and appoints                                   attorney to transfer the said Debenture on the books of the Company, with full power of substitution in the premises.

In connection with any transfer of the within Debenture occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Debenture, the undersigned confirms that such Debenture is being transferred:

¨ *To BlackRock, Inc. or a subsidiary thereof; or

¨ *Pursuant to the registration statement that has been declared effective under the Securities Act of 1933, as amended; or

¨ *Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or

¨ *Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended; or

¨ *Pursuant to another available exemption from registration under the Securities Act of 1933, as amended.

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Dated:                     

Signature(s)

Signature Guarantee

Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or Debentures to be delivered, other than to and in the name of the registered holder.

NOTICE: The signature on the conversion notice, the option to elect repurchase upon a Designated Event or the assignment must correspond with the name as written upon the face of the Debenture in every particular without alteration or enlargement or any change whatever.

E-2

EX-10.36

Exhibit 10.36

Conformed Copy

$250,000,000

BLACKROCK, INC.

2.625% Convertible Debentures Due 2035

PURCHASE AGREEMENT

February 16, 2005

Exhibit 10.36

SCHEDULE A

The following table sets forth the hypothetical stock price and the number of Additional Shares to be issuable per $1,000 principal amount of Debentures:

	Stock Price
Effective Date	$77.58	$85.00	$90.00	$95.00	$100.00	$105.00	$110.00	$115.00	$120.00	$130.00	150.00	$175.00	$200.00	$250.00	$300.00
February 23, 2005	3.16	2.45	2.08	1.77	1.52	1.31	1.13	0.99	0.87	0.68	0.46	0.31	0.23	0.15	0.10
February 15, 2006	3.05	2.32	1.93	1.62	1.36	1.16	0.99	0.85	0.73	0.56	0.36	0.24	0.18	0.12	0.08
February 15, 2007	2.99	2.21	1.81	1.48	1.22	1.01	0.84	0.70	0.59	0.44	0.27	0.18	0.14	0.09	0.06
February 15, 2008	2.95	2.10	1.66	1.32	1.04	0.83	0.66	0.53	0.43	0.30	0.17	0.12	0.09	0.06	0.04
February 15, 2009	2.97	2.00	1.50	1.10	0.80	0.58	0.42	0.30	0.22	0.14	0.08	0.06	0.05	0.03	0.02
February 15, 2010	3.16	2.04	1.38	0.80	0.27	—	—	—	—	—	—	—	—	—	—

Exhibit 10.36

SCHEDULE B

BLACKROCK, INC.

2.625% Convertible Debentures Due 2035

No.                     

Date Principal Amount Notation Explaining
Principal Amount
Recorded
Authorized Signature
of Trustee or
Custodian

February 16, 2005

Morgan Stanley & Co. Incorporated

Citigroup Global Markets Inc.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

UBS Securities LLC

c/o Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Dear Sirs and Mesdames:

BlackRock, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several purchasers named in Schedule I hereto (the “Initial Purchasers”)

$250,000,000 aggregate principal amount of its 2.625% Convertible Debentures Due 2035 (the “Securities”) to be issued pursuant to the provisions of an Indenture to be dated as of February 23, 2005 (the “Indenture”) between the Company and JPMorgan Chase Bank, N.A., as Trustee (the “Trustee”). The Securities will be convertible into shares of the Company’s Class A common stock, $0.01 par value (the “Underlying Securities”).

The Securities and the Underlying Securities will be offered without being registered under the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act.

The Initial Purchasers and their direct and indirect transferees will be entitled to the benefits of a Registration Rights Agreement dated the Closing Date (as defined herein) between the Company and the Initial Purchasers (the “Registration Rights Agreement”).

In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum (the “Preliminary Memorandum”) and will prepare a final offering memorandum (the “Final Memorandum” and, with the Preliminary Memorandum, each a “Memorandum”) including or incorporating by reference a description of the terms of the Securities and the Underlying Securities, the terms of the offering and a description of the Company. As used herein, the term “Memorandum” shall include in each case the documents incorporated by reference therein. The terms “supplement”, “amendment” and “amend” as used herein with respect to a Memorandum shall include all documents deemed to be incorporated by reference in the Preliminary Memorandum or Final Memorandum that are filed subsequent to the date of such Memorandum with the Securities and Exchange Commission (the

“Commission”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

1. Representations and Warranties. The Company represents and warrants to, and agrees with, you that:

(a) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in either Memorandum complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder and (ii) the Preliminary Memorandum does not contain and the Final Memorandum, in the form used by the Initial Purchasers to confirm sales and on the Closing Date (as defined in Section 4), will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in either Memorandum based upon information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through you expressly for use therein.

(b) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the Delaware, has the corporate power and authority to own or lease its property and to conduct its business as described in each Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(c) Each subsidiary of the Company listed on Schedule II (the “subsidiaries”) hereto has been duly organized, is validly existing as a corporation or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its formation, has the corporate or limited liability company power and authority, as the case may be, to own or lease its property and to conduct its business as described in each Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued shares of capital stock or membership interests, as the case may be, of each subsidiary of the Company have been duly and validly authorized and issued and are owned directly or indirectly by the Company, free and clear of all liens,

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encumbrances, equities or claims and the issued shares of capital stock are fully paid and non-assessable.

(d) This Agreement has been duly authorized, executed and delivered by the Company.

(e) The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Final Memorandum.

(f) The shares of common stock outstanding prior to the issuance of the Securities have been duly authorized and validly issued and are fully paid and non-assessable.

(g) The Securities have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles of equity, and will be entitled to the benefits of the Indenture pursuant to which such Securities are to be issued and the Registration Rights Agreement.

(h) The Underlying Securities issuable upon conversion of the Securities have been duly authorized and reserved and, when issued upon conversion of the Securities in accordance with the terms of the Securities, will be validly issued, fully paid and non–assessable, and the issuance of the Underlying Securities will not be subject to any preemptive or similar rights.

(i) Each of the Indenture and the Registration Rights Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles of equity and except as rights to indemnification and contribution under the Registration Rights Agreement may be limited under applicable law.

(j) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture, the Registration Rights Agreement and the Securities will not contravene any provision of applicable law, statute, rule, regulation, or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, any

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judgment, order or decree of any governmental body, agency, court or self–regulatory organization having jurisdiction over the Company or any subsidiary, and no filing with or consent, approval, authorization, license or order of, or qualification or registration with, any governmental body, agency or self-regulatory organization is required for the performance by the Company of its obligations under this Agreement, the Indenture, the Registration Rights Agreement or the Securities, except such as may be required by the securities or Blue Sky laws of the various states or other jurisdictions in connection with the offer and sale of the Securities and by Federal and state securities laws with respect to the Company’s obligations under the Registration Rights Agreement.

(k) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the financial condition, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Preliminary Memorandum provided to prospective purchasers of the Securities.

(l) There are no legal or governmental proceedings, actions, suits, inquiries or investigations pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject other than (i) proceedings accurately described in all material respects in each Memorandum and (ii) proceedings that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, or on the power or ability of the Company to perform its obligations under this Agreement, the Indenture, the Registration Rights Agreement or the Securities or to consummate the transactions contemplated by the Final Memorandum.

(m) The Company and its subsidiaries are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants except where such non-compliance would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(n) The Company is not, and solely after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Final Memorandum will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

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(o) Neither the Company nor any affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act, an “Affiliate”) of the Company has directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the sale of the Securities in a manner that would require the registration under the Securities Act of the Securities or (ii) offered, solicited offers to buy or sold the Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act.

(p) It is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers in the manner contemplated by this Agreement to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

(q) The Securities satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act.

(r) Each of the Company and its subsidiaries owns or possesses, or can acquire on reasonable terms, all 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 and trade names necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse affect on the Company and its subsidiaries, taken as a whole.

(s) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse affect on the Company and its subsidiaries, taken as a whole, except as described in the Memorandum.

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(t) The Company and its subsidiaries possess all certificates, authorizations, licenses, approvals, consents, permits and other authorizations issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization, licenses, approval, consent, permit or other authorization which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse affect on the Company and its subsidiaries, taken as a whole, except as described in the Memorandum.

(u) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(v) The Company has established and maintained disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) that are adequate and effective and designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to its chief executive officer and chief financial officer by others within those entities.

(w) The consolidated financial statements incorporated by reference in the Memorandum, together with 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 and stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified, said financials have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved, except as disclosed therein; and the other financial information and data set forth in the Memorandum 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 or incorporated by reference in the Memorandum.

(x) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable

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title to all personal property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in the Memorandum or such as do not 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 and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, in each case except as described in the Memorandum.

(y) Each of BlackRock Advisors, Inc., BlackRock Institutional Management Corporation, BlackRock Financial Management, Inc., BlackRock (Japan), Inc., BlackRock Capital Management, Inc., BlackRock HPB Management, LLC, State Street Research Management Company, BlackRock Realty Advisors, Inc. and BlackRock International Ltd. (together, 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 such other subsidiaries conduct business or is subject to material liability or disability by reason of the failure to be so registered, licensed or qualified.

(z) Each of BlackRock Investments, Inc. and State Street Research Investment Services (the “Broker Dealer Subsidiaries”) 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

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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. Each of the Broker Dealer Subsidiaries is a member in good standing of NASD and each other self-regulatory organization where the conduct of its business requires such membership. Neither the Company nor any 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 or such other subsidiaries conduct business or is subject to any material liability or disability by reason of the failure to be so registered, licensed or qualified except where the failure to be so registered, licensed or qualified would not have a material adverse affect on the Company and its subsidiaries, taken as a whole.

(aa) Each of the Investment Adviser Subsidiaries and the Broker Dealer Subsidiaries is, has been and will upon consummation of the transactions contemplated herein be, in compliance with, and each such entity has received no notice of any kind of any violation of, (A) 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 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 on the Company and its subsidiaries taken as a whole.

(bb) 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 sub-adviser 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 applicable provisions of 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 on the Company and its subsidiaries taken as a whole. To the knowledge of the Company, each Fund’s registration statement complies (or, in the case of closed-end funds, complied at the date thereof) in all material respects with the provisions of the Securities Act, the 1940 Act and the rules and regulations thereunder and does not (or, in the case

8

of closed-end funds, did not at the date thereof) 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.

(cc) Each entity for which an Investment Adviser Subsidiary acts as investment adviser and, to the best knowledge of the Investment Adviser Subsidiaries, each entity for which the Investment Adviser Subsidiary acts as sub-adviser which entity is not required to be registered with the Commission as an investment company under the 1940 Act (an “Exempt Fund”) is not, and upon consummation of the transactions contemplated herein will not be, required to register with the Commission as an investment company under the 1940 Act and to the best knowledge of the Company there are no facts with respect to any such Exempt Fund that are likely to have a material adverse effect on the Company and its subsidiaries taken as a whole. To the best knowledge of the Company, each Exempt Fund’s offering documents comply in all material respects with the provisions of the laws applicable to such offering and do 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.

(dd) Each agreement between the Company, any Investment Adviser Subsidiary, or any other subsidiary of the Company on the one hand and any Fund, Exempt 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 on the Company and its subsidiaries taken as a whole.

(ee) The offering contemplated by this 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.

2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the several Initial Purchasers, and each Initial Purchaser, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company the Securities set forth in Schedule I hereto opposite its name at a purchase price of 98% of the principal amount thereof (the “Purchase Price”) plus accrued interest, if any, to the Closing Date.

The Company hereby agrees that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the Initial Purchasers, it will not, during the period beginning on the date hereof and continuing to an including the

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date that is 60 days after the date of the Final Memorandum, (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 to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for class A or class B common stock or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the class A or class B common stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of class A or class B common stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the sale of the Securities under this Agreement, (B) the issuance by the Company of any shares of class A or class B common stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of which the Initial Purchasers have been advised, (C) the issuance of the Underlying Securities upon conversion of the Securities in accordance with the terms of the Indenture or (D) the grant of options or stock under the Company’s stock incentive, dividend reinvestment or other employee ownership or benefit plans is in effect on the date hereof.

3. Terms of Offering. You have advised the Company that the Initial Purchasers will make an offering of the Securities purchased by the Initial Purchasers hereunder on the terms to be set forth in the Final Memorandum, as soon as practicable after this Agreement is entered into as in your judgment is advisable.

4. Payment and Delivery. Payment for the Securities shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Securities for the respective accounts of the several Initial Purchasers at 10:00 a.m., New York City time, on February 23, 2005, or at such other time on the same or such other date, not later than March 2, 2005, as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the “Closing Date.”

The Securities shall be in definitive form or global form, as specified by you, and registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date. The certificate evidencing the Securities shall be delivered to you on the Closing Date for the respective accounts of the several Initial Purchasers, with any transfer taxes payable in connection with the transfer of the Securities to the Initial Purchasers duly paid, against payment of the Purchase Price therefor plus accrued interest, if any, to the date of payment and delivery.

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5. Conditions to the Initial Purchasers’ Obligations. The several obligations of the Initial Purchasers to purchase and pay for the Securities on the Closing Date are subject to the following conditions:

(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date there shall not have occurred:

(i) any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company’s securities by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and

(ii) any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Preliminary Memorandum provided to prospective purchasers of the Securities that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Final Memorandum.

(b) The Initial Purchasers shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i) and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.

(c) The Initial Purchasers shall have received on the Closing Date an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company, dated the Closing Date, to the effect set forth in Exhibit A. Such opinion shall be rendered to the Initial Purchasers at the request of the Company and shall so state therein.

(d) The Initial Purchaser shall have received on the Closing Date an opinion of Robert P. Connolly, Managing Director, General Counsel and Secretary of the Company, dated the Closing Date, to the effect set forth in Exhibit B. Such opinion shall be rendered to the Initial Purchasers at the request of the Company and shall so state therein.

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(e) The Initial Purchasers shall have received on the Closing Date an opinion of Davis Polk & Wardwell, counsel for the Initial Purchasers, dated the Closing Date, to the effect set forth in Exhibit B.

(f) The Initial Purchasers shall have received on each of the date hereof and the Closing Date a letter, dated the date hereof or the Closing Date, as the case may be, in form and substance reasonably satisfactory to the Initial Purchasers, from Deloitte & Touche LLP, independent public accountants, 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 or incorporated by reference into the Final Memorandum; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.

(g) The “lock-up” agreements, each substantially in the form of Exhibit C hereto, between you and certain shareholders, officers and directors of the Company listed on Schedule III hereto relating to sales and certain other dispositions of shares of common stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.

6. Covenants of the Company. In further consideration of the agreements of the Initial Purchasers contained in this Agreement, the Company covenants with each Initial Purchaser as follows:

(a) To furnish to you in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(c), as many copies of the Final Memorandum, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request.

(b) Before amending or supplementing either Memorandum, to furnish to you a copy of each such proposed amendment or supplement and not to use any such proposed amendment or supplement to which you reasonably object.

(c) If, during such period after the date hereof and prior to the date on which all of the Securities shall have been sold by the Initial Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Final Memorandum in order to make the statements therein, in the light of the circumstances when the Final Memorandum is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Initial Purchasers, it is necessary to amend or supplement the Final Memorandum to comply with applicable law,

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forthwith to prepare and furnish, at its own expense, to the Initial Purchasers, either amendments or supplements to the Final Memorandum so that the statements in the Final Memorandum as so amended or supplemented will not, in the light of the circumstances when the Final Memorandum is delivered to a purchaser, be misleading or so that the Final Memorandum, as amended or supplemented, will comply with applicable law.

(d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request.

(e) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated (except pursuant to Sections 9(i), (iii), (iv), or (v)), to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the reasonable fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the issuance and sale of the Securities and all other fees or expenses in connection with the preparation of each Memorandum and all amendments and supplements thereto, including all printing costs associated therewith, and the delivering of copies thereof to the Initial Purchasers, in the quantities herein above specified, (ii) all costs and expenses related to the transfer and delivery of the Securities to the Initial Purchasers, including any transfer or other taxes payable thereon, (iii) all expenses in connection with the qualification of the Securities for offer and sale under state securities laws as provided in Section 6(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the Blue Sky or legal investment memorandum, (iv) any fees charged by rating agencies for the rating of the Securities, (v) the fees and expenses, if any, incurred in connection with the admission of the Securities for trading in PORTAL or any appropriate market system, (vi) the costs and charges of the Trustee and any transfer agent, registrar or depositary, (vii) the cost of the preparation, issuance and delivery of the Securities, (viii) the document production charges and expenses associated with printing this Agreement and (ix) all other cost and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 8, and the last paragraph of Section 10, the Initial Purchasers will pay all of their costs and expenses, including fees and disbursements of their counsel, transfer taxes payable on resale of any of the Securities by them and any advertising expenses connected with any offers they may make.

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(f) Neither the Company nor any Affiliate will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) which could be integrated with the sale of the Securities in a manner which would require the registration under the Securities Act of the Securities.

(g) Not to solicit any offer to buy or offer or sell the Securities or the Underlying Securities by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act.

(h) While any of the Securities or the Underlying Securities remain “restricted securities” within the meaning of the Securities Act, to make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act.

(i) If requested by you, to use its best efforts to permit the Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. relating to trading in the PORTAL Market.

(j) During the period of two years after the Closing Date the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to resell any of the Securities or the Underlying Securities which constitute “restricted securities” under Rule 144 that have been reacquired by any of them.

(k) Not to take any action prohibited by Regulation M under the Exchange Act in connection with the distribution of the Securities contemplated hereby.

7. Offering of Securities; Restrictions on Transfer. Each Initial Purchaser, severally and not jointly, represents and warrants that such Initial Purchaser is a qualified institutional buyer as defined in Rule 144A under the Securities Act (a “QIB”). Each Initial Purchaser, severally and not jointly, agrees with the Company that (i) it will not solicit offers for, or offer or sell, such Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act and (ii) it will solicit offers for such Securities only from, and will offer such Securities only to, persons that it reasonably believes to be (A) in the case of offers inside the United States, QIBs that, in each case, in purchasing such Securities are deemed to have represented and agreed as provided in the Final Memorandum under the caption “Transfer Restrictions”.

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8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser, each person, if any, who controls any Initial Purchaser within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Initial Purchaser within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in either Memorandum or any amendments or supplements thereto, or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through you expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any Preliminary Memorandum shall not inure to the benefit of any Initial Purchaser from whom the person asserting any such losses, claims, damages or liabilities purchased Securities, or any person controlling such Initial Purchaser, if a copy of the Final Memorandum (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Initial Purchaser to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Securities to such person, and if the Final Memorandum (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company with Section 6(a) hereof.

(b) Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Initial Purchaser, but only with reference to information relating to such Initial Purchaser furnished to the Company in writing by such Initial Purchaser through you expressly for use in either Memorandum or any amendments or supplements thereto.

(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall

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pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley & Co. Incorporated, in the case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Initial Purchasers on the other hand from the offering of the Securities or (ii) if the allocation provided by clause 8(d)(i) above

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is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company on the one hand and of the Initial Purchasers on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Initial Purchasers on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total discounts and commissions received by the Initial Purchasers, in each case as set forth in the Final Memorandum, bear to the aggregate offering price of the Securities. The relative fault of the Company on the one hand and of the Initial Purchasers on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) The Company and the Initial Purchasers agree that it would not be just or equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities resold by it in the initial placement of such Securities were offered to investors exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

(f) The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Initial Purchaser, any person controlling any Initial

17

Purchaser or any affiliate of any Initial Purchaser or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Securities.

9. Termination. The Initial Purchasers may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, the New York Stock Exchange or the Nasdaq National Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over–the–counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in the Final Memorandum.

10. Effectiveness; Defaulting Purchasers. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date any one or more of the Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, the other Initial Purchasers shall be obligated severally in the proportions that the principal amount of Securities set forth opposite their respective names in Schedule I bears to the aggregate principal amount of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as you may specify, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on such date; provided that in no event shall the principal amount of Securities that any Initial Purchaser has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such principal amount of Securities without the written consent of such Initial Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase Securities which it or they have agreed to purchase hereunder on such date and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Securities are not made within 36 hours after

18

such default, this Agreement shall terminate without liability on the part of any non–defaulting Initial Purchaser or of the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Final Memorandum or in any other documents or arrangements may be effected.

If this Agreement shall be terminated by the Initial Purchasers, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Initial Purchasers or such Initial Purchasers as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Initial Purchasers in connection with this agreement or the offering contemplated hereunder.

11. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

12. Notices. All communications hereunder will be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notice to the Initial Purchasers shall be directed c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Equity Capital Markets. Notices to the Company shall be directed to BlackRock, Inc., 40 East 52^nd Street, New York, New York 10022, Attention: Robert Connolly.

13. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

14. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

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Very truly yours,
BLACKROCK, INC.
By:	/s/    ROBERT P. CONNOLLY
	Name:	Robert P. Connolly
	Title:	Managing Director, General
		Counsel and Secretary

Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
Acting severally on behalf of themselves and the several Initial Purchasers named in Schedule I hereto.
By:	Morgan Stanley & Co. Incorporated
By:	/s/    JOHN D. TYREE
	Name:	John D. Tyree
	Title:	Executive Director

Schedule I

Initial Purchasers	$250,000,000 of Securities to be Purchased
Morgan Stanley & Co. Incorporated	$	151,000,000
Citigroup Global Markets Inc.		33,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated		33,000,000
UBS Securities LLC		33,000,000
Total:	$	250,000,000

Schedule II

Subsidiaries

BlackRock Advisors, Inc.

BlackRock Financial Management, Inc.

BlackRock Institutional Management Corporation

BlackRock Funding, Inc.

BlackRock Funding International, Ltd.

BlackRock Investments, Inc.

Advanced Investment Management, Inc.

BlackRock Overseas Investment Corp.

Risk Monitors, Inc.

Investment Technology, LLC

BlackRock (Japan), Inc.

BlackRock Capital Management, Inc.

BlackRock Asia Limited

BlackRock International, Ltd.

BlackRock Japan Holdings, Inc.

Nomura BlackRock Asset Management Co., Ltd.

BlackRock Japan Co., Ltd.

BlackRock Advisors Singapore Pte. Ltd

BlackRock Portfolio Holdings, Inc.

BlackRock HPB Management LLC

BlackRock Portfolio Investments, LLC

BlackRock Absolute Return Partners (Offshore), Ltd.

BlackRock Funds Inflation Bond Portfolio

BlackRock Bond Allocation Target Shares Series C Portfolio

BlackRock Bond Allocation Target Shares Series S Portfolio

BlackRock Bond Allocation Target Shares Series M Portfolio

SSRM Holdings, Inc.

Schedule III

Lockups

William O. Albertini

Laurence D. Fink

Frank T. Nickell

Thomas H. O’Brien

David H. Komansky

James E. Rohr

Ralph L. Schlosstein

Lawrence M. Wagner

William S. Demchak

Murry S. Gerber

James Grosfeld

William C. Mutterperl

Robert S. Kapito

Paul L. Audet

Robert S. Connolly

Linda Robinson

Sue Wagner (spouse of Lawrence M. Wagner)

The PNC Financial Services Group, Inc.

EXHIBIT A

[OPINION OF SKADDEN, ARPS, SLATE, MEXGHER & FLOM LLP]

A-1

EXHIBIT B

[OPINION OF IN-HOUSE COUNSEL]

B-1

EXHIBIT C

[OPINION OF DAVIS POLK & WARDWELL]

C-1

EX-10.37

Exhibit 10.37

Second Amendment to the

BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan

1. Sections 5(e), (f) and (h) of the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan (the “Plan”) are each hereby amended, effective as of the date hereof, by inserting “; provided, however, that the Committee may provide for different treatment in any award agreement” at the end of such section.

2. In all other respects the Plan is hereby confirmed.

Dated this 11^th day of November, 2004.

EX-10.38

EXHIBIT 10.38

REGISTRATION RIGHTS AGREEMENT

dated as of February 23, 2005

between

BLACKROCK, INC.

and

MORGAN STANLEY & CO. INCORPORATED,

as representative of the Initial Purchasers

REGISTRATION RIGHTS AGREEMENT dated as of February 23, 2005 between Blackrock, Inc., a Delaware corporation (the “Company”), and Morgan Stanley & Co. Incorporated, as representative of the several initial purchasers listed on Schedule I (the “Initial Purchasers”) to be named in the Purchase Agreement dated February 16, 2005 (the “Purchase Agreement”) with the Company. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement.

The Company agrees with the Initial Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners (including the Initial Purchasers) from time to time of the Securities (as defined herein), which are convertible in certain circumstances into Underlying Common Stock (as defined herein), and the beneficial owners from time to time of the Underlying Common Stock issued upon conversion of the Securities (each of the foregoing a “Holder” and together the “Holders”), as follows:

Section 1. Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” means with respect to any specified person, an “affiliate,” as defined in Rule 144, of such person.

“Amendment Effectiveness Deadline” has the meaning set forth in Section 2(d) hereof.

“Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

“Common Stock” means the shares of Class A common stock, $0.01 par value per share, of the Company, and any other shares of common stock as may constitute “Common Stock” for purposes of the Indenture, including the Underlying Common Stock.

“Conversion Price” has the meaning assigned to such term in the Indenture.

“Damages Payment Date” means each February 15 and August 15.

“Deferral Notice” has the meaning set forth in Section 3(h) hereof.

“Deferral Period” has the meaning set forth in Section 3(h) hereof.

“Effectiveness Deadline” has the meaning set forth in Section 2(a)hereof.

“Effectiveness Period” means the period commencing on the first date that a Shelf Registration Statement is declared effective under the Securities Act hereof and ending on the date that all Securities and the Underlying Common Stock have ceased to be Registrable Securities.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Filing Deadline” has the meaning set forth in Section 2(a) hereof.

“Holder” has the meaning set forth in the second paragraph of this Agreement.

“Indenture” means the Indenture dated as of February 23, 2005 between the Company and JPMorgan Chase Bank, N.A., as trustee, pursuant to which the Securities are being issued.

“Initial Purchasers” has the meaning set forth in the preamble hereof.

“Issue Date” means the first date of original issuance of the Securities.

“Liquidated Damages Amount” has the meaning set forth in Section 2(e) hereof.

“Material Event” has the meaning set forth in Section 3(h) hereof.

“Notice and Questionnaire” means a written notice delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum of the Company dated February 16, 2005 relating to the Securities.

“Notice Holder” means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date.

“Purchase Agreement” has the meaning set forth in the preamble hereof.

“Prospectus” means a prospectus relating to a Shelf Registration Statement, as amended or supplemented, and all materials incorporated by reference in such Prospectus.

“Record Holder” means with respect to any Damages Payment Date relating to any Securities or Underlying Common Stock as to which any Liquidated Damages Amount has accrued, the registered holder of such Security or Underlying Common Stock on the February 1 or August 1 immediately preceding the Damages Payment Date.

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“Registrable Securities” means the Securities until such Securities have been converted into or exchanged for the Underlying Common Stock and, at all times subsequent to any such conversion, the Underlying Common Stock and any securities into or for which such Underlying Common Stock has been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, (A) the earliest of (i) its effective registration under the Securities Act and resale in accordance with a Shelf Registration Statement, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) or any successor or similar provision then in effect or (iii) its sale to the public pursuant to Rule 144 (or any successor or similar provision then in effect, but not Rule 144A) under the Securities Act, and (B) as a result of the event or circumstance described in any of the foregoing clauses (i) through (iii), the legend with respect to transfer restrictions required under the Indenture is removed or removable in accordance with the terms of the Indenture or such legend, as the case may be.

“Registration Default” has the meaning set forth in Section 2(e) hereof.

“Registration Default Period” has the meaning set forth in Section 2(e) hereof.

“Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

“Rule 144A” means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

“SEC” means the Securities and Exchange Commission.

“Securities” means the 2.625% Convertible Debentures Due 2035 of the Company to be purchased pursuant to the Purchase Agreement, including any Securities purchased by the Initial Purchasers upon exercise of their option to purchase additional Securities.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

“Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof, including amendments to such registration statement, all exhibits and all materials incorporated by reference in such registration statement.

“Special Counsel” means Davis Polk & Wardwell or one such other successor counsel as shall be specified by the Holders of a majority of the Registrable Securities, but that may, with the written consent of the Initial Purchasers (which shall not be unreasonably withheld), be another nationally recognized law firm experienced in securities law matters designated by the

3

Company. For purposes of determining Holders of a majority of the Registrable Securities in this definition, Holders of Securities shall be deemed to be the Holders of the number of shares of Underlying Common Stock into which such Securities are or would be convertible as of the date the consent is requested.

“Trustee” means JPMorgan Chase Bank, N.A., the Trustee under the Indenture.

“Underlying Common Stock” means the Common Stock into which the Securities are convertible or issued upon any such conversion.

Section 2. Shelf Registration. (a) The Company shall prepare and file or cause to be prepared and filed with the SEC, as soon as practicable but in any event by the date (the “Filing Deadline”) 90 days after the Issue Date, a registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act registering the resale of the Registrable Securities from time to time by Holders (a “Shelf Registration Statement”). The Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of the Registrable Securities for resale by the Holders in accordance with the methods of distribution elected by the Holders and set forth in the Shelf Registration Statement, subject to the limitations set forth in Section 8(j). The Company shall use its reasonable best efforts to cause a Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable but in any event by the date (the “Effectiveness Deadline”) that is 180 days after the Issue Date, and to keep a Shelf Registration Statement continuously effective under the Securities Act until the expiration of the Effectiveness Period. To the extent permitted by applicable law and the interpretations of the staff of the SEC, the Shelf Registration Statement may be terminated with respect to the Registrable Securities on the date the Effectiveness Period expires. Each Holder that became a Notice Holder on or prior to the date ten Business Days prior to the initial Shelf Registration Statement is declared effective shall be named as a selling securityholder in the initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver the Prospectus to purchasers of Registrable Securities in accordance with applicable law.

(b) If a Shelf Registration Statement covering resales of the Registrable Securities ceases to be effective for any reason at any time during the Effectiveness Period (other than because all Registrable Securities registered thereunder shall have been resold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company shall use its reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall promptly amend the Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement so that all Registrable Securities outstanding as of the date of such filing are covered by a Shelf Registration Statement. If a new Shelf Registration Statement is filed, the

4

Company shall use its reasonable best efforts to cause the new Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep the new Shelf Registration Statement continuously effective until the end of the Effectiveness Period.

(c) The Company shall amend and supplement the Prospectus and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or file a new Shelf Registration Statement, if required by the Securities Act, or any other documents necessary to name a Notice Holder as a selling securityholder pursuant to Section 2(d) below.

(d) Each Holder may sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus only in accordance with this Section 2(d) and Section 3(h). Each Holder wishing to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus shall deliver a Notice and Questionnaire to the Company at least three Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration Statement. Each Holder who elects to sell Registrable Securities pursuant to the Shelf Registration Statement shall agree that, by submitting a Notice and Questionnaire to the Company, it will be bound by the terms and conditions of the Notice and Questionnaire and this Agreement. From and after the date the initial Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date a Notice and Questionnaire is delivered, and in any event upon the later of (x) twenty Business Days after such date or (y) twenty Business Days after the expiration of any Deferral Period in effect when the Notice and Questionnaire is delivered or put into effect within twenty Business Days of such delivery date:

(i) if required by applicable law, file with the SEC a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file a new Shelf Registration Statement or any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in a Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to a Shelf Registration Statement or shall file a new Shelf Registration Statement, the Company shall use its reasonable best efforts to cause such post-effective amendment or new Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable, but in any event by the date (the “Amendment Effectiveness Deadline”) that is 60 days after the date such post-effective amendment or new Shelf Registration Statement is required by this clause to be filed;

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(ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and

(iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any new Shelf Registration Statement or post-effective amendment filed pursuant to Section 2(d)(i);

provided that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(h). Notwithstanding anything contained herein to the contrary, (i) the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus and (ii) the Amendment Effectiveness Deadline shall be extended by up to twenty Business Days from the expiration of a Deferral Period (and the Company shall incur no obligation to pay Liquidated Damages during such extension) if such Deferral Period shall be in effect on the Amendment Effectiveness Deadline.

(e) The parties hereto agree that the Holders of Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if:

(i) a Shelf Registration Statement has not been filed on or prior to the Filing Deadline,

(ii) a Shelf Registration Statement has not been declared effective under the Securities Act on or prior to the Effectiveness Deadline,

(iii) the Company has failed to perform its obligations set forth in Section 2(d)(i) within the time period required therein,

(iv) a new Shelf Registration Statement or a post-effective amendment to a Shelf Registration Statement filed pursuant to Section 2(d)(i) has not become effective under the Securities Act on or prior to the Amendment Effectiveness Deadline (as extended by the proviso to Section 2(d), if applicable), or

(v) the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(h) hereof,

Each event described in any of the foregoing clauses (i) through (vi) is individually referred to herein as a “Registration Default.” For purposes of this Agreement, each Registration Default set forth above shall begin and end on the dates set forth in the table set forth below:

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Type of Registration Default by Clause	Beginning Date	Ending Date
(i)	Filing Deadline	the date a Shelf Registration Statement is filed
(ii)	Effectiveness Deadline	the date a Shelf Registration Statement becomes effective under the Securities Act
(iii)	the date by which the Company is required to perform its obligations under Section 2(d)(i)	the date the Company performs its obligations set forth in Section 2(d)(i)
(iv)	the Amendment Effectiveness Deadline (as extended by the proviso to Section 2(d), if applicable)	the date the applicable post-effective amendment to a Shelf Registration Statement or a new Shelf Registration Statement becomes effective under the Securities Act
(v)	the date on which the aggregate duration of Deferral Periods in any period exceeds the number of days permitted by Section 3(h)	termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods to be exceeded

For purposes of this Agreement, Registration Defaults shall begin on the dates set forth in the table above and shall continue until the ending dates set forth in the table above.

Commencing on (and including) any date that a Registration Default has begun and ending on (but excluding) the next date on which there are no Registration Defaults that have occurred and are continuing (a “Registration Default Period”), the Company shall pay to Record Holders of Registrable Securities in respect of each day in the Registration Default Period, liquidated damages (i) in respect of any Security then outstanding, at a rate per annum equal to 0.25% for the first 90-day period after a Registration Default and 0.50% thereafter of the aggregate principal amount of such Security and (ii) in respect of each share of Underlying Common Stock then outstanding at a rate per annum equal to 0.25% for the first 90-day period after a Registration Default and 0.50% thereafter on the Conversion Price on such date (each, a “Liquidated Damages Amount”), as the case may be; provided that in the case of a Registration Default Period that is in effect solely as a result of a Registration Default of the type described in clause (iii) or (iv) of the preceding paragraph, such Liquidated

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Damages Amount, as applicable, shall be paid only to the Holders (as set forth in the succeeding paragraph) that have delivered Notices and Questionnaires that caused the Company to incur the obligations set forth in Section 2(d) the non-performance of which is the basis of such Registration Default. In calculating the Liquidated Damages Amount on shares of Underlying Common Stock on any date on which no Securities are outstanding, the Conversion Price used shall be based on the Conversion Price that would be in effect if the Securities were still outstanding. Notwithstanding the foregoing, no Liquidated Damages Amount shall accrue as to any Registrable Security from and after the earlier of (x) the date such security is no longer a Registrable Security and (y) expiration of the Effectiveness Period. The rate of accrual of the Liquidated Damages Amount, with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Registration Defaults.

The Liquidated Damages Amount, shall accrue from the first day of the applicable Registration Default Period, and shall be payable on each Damages Payment Date during the Registration Default Period (and on the Damages Payment Date next succeeding the end of the Registration Default Period if the Registration Default Period does not end on a Damages Payment Date) to the Record Holders of the Registrable Securities entitled thereto; provided that any Liquidated Damages Amount accrued with respect to any Security or portion thereof redeemed by the Company on a redemption date, purchased by the Company on a repurchase date or converted into Underlying Common Stock on a conversion date prior to the Damages Payment Date, shall, in any such event, be paid instead to the Holder who submitted such Security or portion thereof for redemption, purchase or conversion on the applicable redemption date, repurchase date or conversion date, as the case may be, on such date (or promptly following the conversion date, in the case of conversion), unless the redemption date or the repurchase date, as the case may be, falls after February 1 or August 1 and on or prior to the corresponding Damages Payment Date; and provided further, that, in the case of a Registration Default of the type described in clause (iii) or (iv) of the first paragraph of this Section 2(e) such Liquidated Damages Amount shall be paid only to the Holders entitled thereto by check mailed to the address set forth in the Notice and Questionnaire delivered by such Holder. The Trustee shall be entitled, on behalf of registered holders of Securities or Underlying Common Stock, to seek any available remedy for the enforcement of this Agreement, including for the payment of such Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree that the sole damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages. Nothing shall preclude any Holder from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.

All of the Company’s obligations set forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(k)).

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The parties hereto agree that the liquidated damages provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities by reason of the failure of a Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with the provisions hereof.

Section 3. Registration Procedures. In connection with the registration obligations of the Company under Section 2 hereof, the Company shall:

(a) Before filing any Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the SEC, furnish to the Initial Purchasers and the Special Counsel of such offering, if any, copies of any such Shelf Registration Statement, Prospectus or any amendment thereto, and upon request, any such supplements, proposed to be filed at least three Business Days prior to the filing of such Shelf Registration Statement or amendment thereto or Prospectus or supplement thereto.

(b) Subject to Section 3(h) prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement continuously effective during the Effectiveness Period; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use its reasonable best efforts to comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Shelf Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented.

(c) As promptly as practicable give notice to the Notice Holders, the Initial Purchasers and the Special Counsel, (i) when any Prospectus, prospectus supplement, Shelf Registration Statement or post-effective amendment to a Shelf Registration Statement has been filed with the SEC and, with respect to a Shelf Registration Statement or any post-effective amendment, when the same has been declared effective, (ii) of any request, following the effectiveness of the initial Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for amendments or supplements to any Shelf Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of any Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable

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Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of, but not the nature of or details concerning, a Material Event (as defined in Section 3(h)) and (vi) of the determination by the Company that a post-effective amendment to a Shelf Registration Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as required pursuant to Section 3(h)) state that it constitutes a Deferral Notice, in which event the provisions of Section 3(h) shall apply.

(d) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Shelf Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case at the earliest possible moment, and provide prompt notice to each Notice Holder and the Initial Purchasers of the withdrawal of any such order.

(e) As promptly as practicable furnish to each Notice Holder, the Special Counsel and the Initial Purchasers, upon written request and without charge, at least one conformed copy of each Shelf Registration Statement and any amendment thereto, including exhibits and all documents incorporated or deemed to be incorporated therein by reference.

(f) During the Effectiveness Period, deliver to each Notice Holder, the Special Counsel, if any, and the Initial Purchasers, in connection with any sale of Registrable Securities pursuant to a Shelf Registration Statement, without charge, as many copies of the Prospectus relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Notice Holder may reasonably request; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by each Notice Holder in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein.

(g) Prior to any public offering of the Registrable Securities pursuant to a Shelf Registration Statement, use its reasonable best efforts to register or qualify or cooperate with the Notice Holders and the Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Notice Holder reasonably requests in writing (which request may be included in the Notice and Questionnaire). The Company shall use its reasonable best efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period in connection with such Notice Holder’s offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption therefrom) and do any and all other acts or things reasonably necessary

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or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the Shelf Registration Statement and the related Prospectus; provided that the Company will not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Agreement or (ii) take any action that would subject it to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject.

(h) Upon (A) the issuance by the SEC of a stop order suspending the effectiveness of a Shelf Registration Statement or the initiation of proceedings with respect to a Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any fact (a “Material Event”) as a result of which a Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (C) the occurrence or existence of any pending corporate development that, in the reasonable discretion of the Company, makes it appropriate to suspend the availability of a Shelf Registration Statement and the related Prospectus:

(i) in the case of clause (B) above, as promptly as practicable prepare and file, if necessary pursuant to applicable law, a post-effective amendment to such Shelf Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Shelf Registration Statement and Prospectus so that such Shelf Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Shelf Registration Statement, use its reasonable best efforts to cause it to be declared effective as promptly as is practicable, and

(ii) give notice to the Notice Holders, and the Special Counsel, if any, that the availability of a Shelf Registration Statement is suspended (a “Deferral Notice”).

The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is

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practicable, (y) in the case of clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of the Company or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as soon as in the reasonable discretion of the Company, such suspension is no longer appropriate. Subject in all respects to its obligation to use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as set forth in the previous sentence, the Company shall be entitled to exercise its right under this Section 3(h) to suspend the availability of a Shelf Registration Statement or any Prospectus, without incurring or accruing any obligation to pay liquidated damages pursuant to Section 2(e), and any such period during which the availability of the Shelf Registration Statement and any Prospectus is suspended (the “Deferral Period”) shall, without incurring any obligation to pay liquidated damages pursuant to Section 2(e), not exceed 45 days; provided that the aggregate duration of any Deferral Periods shall not exceed 45 days in any three month period or 120 days in any 12 month period; provided further that in the case of a Material Event relating to an acquisition or a probable acquisition or financing, recapitalization, business combination or other similar transaction, the Company may, without incurring any obligation to pay liquidated damages pursuant to Section 2(e), deliver to Notice Holders a second notice to the effect set forth above, which shall have the effect of extending the Deferral Period by such period of time as is specified in such second notice but in no circumstances shall the aggregate amount of Deferral Periods in the event of such Material Event plus any other Deferral Periods exceed an aggregate of 165 days in any twelve month period.

(i) If requested in writing in connection with a disposition of Registrable Securities pursuant to a Shelf Registration Statement, make reasonably available for inspection during normal business hours by a representative for the Notice Holders of such Registrable Securities, any broker-dealers, attorneys and accountants retained by such Notice Holders, and any attorneys or other agents retained by a broker-dealer engaged by such Notice Holders, all relevant financial and other records and pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate officers, directors and employees of the Company and its subsidiaries to make reasonably available for inspection during normal business hours on reasonable notice all relevant information reasonably requested by such representative for the Notice Holders, or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar “due diligence” examinations; provided that such persons shall first agree in writing with the Company that any non-public information shall be used solely for the purposes of satisfying “due diligence” obligations under the Securities Act and exercising rights under this Agreement and shall be kept confidential by such persons, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) in the opinion of Special Counsel, disclosure of such information is required by law (including any disclosure requirements pursuant to federal

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securities laws in connection with the filing of any Shelf Registration Statement or the use of any prospectus referred to in this Agreement), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by any such person or (iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a confidentiality agreement, and provided further that the foregoing inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the Special Counsel. Any person legally compelled to disclose any such confidential information made available for inspection shall provide the Company with prompt prior written notice of such requirement so that the Company may seek a protective order or other appropriate remedy.

(j) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) for a 12-month period commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of a Shelf Registration Statement, which statements shall be made available no later than 45 days after the end of the 12-month period or 90 days if the 12-month period coincides with the fiscal year of the Company.

(k) Cooperate with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold or to be sold pursuant to a Shelf Registration Statement, which certificates shall not bear any restrictive legends, and cause such Registrable Securities to be in such denominations as are permitted by the Indenture and registered in such names as such Notice Holder may request in writing at least two Business Days prior to any sale of such Registrable Securities.

(l) Provide a CUSIP number for all Registrable Securities covered by each Shelf Registration Statement not later than the effective date of such Shelf Registration Statement and provide the Trustee and the transfer agent for the Common Stock with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company.

(m) Cooperate and assist in any filings required to be made with the National Association of Securities Dealers, Inc.

(n) Upon (i) the filing of the initial Shelf Registration Statement and (ii) the effectiveness of the initial Shelf Registration Statement, announce the same, in each case by release to Reuters Economic Services and Bloomberg Business News.

Section 4. Holder’s Obligations. (a) Each Holder agrees, by acquisition of the Registrable Securities, that no Holder shall be entitled to sell any of such

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Registrable Securities pursuant to a Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(d) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such Registrable Securities as the Company may from time to time reasonably request. Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the information relating to such Holder and its plan of distribution is as set forth in the Prospectus delivered by such Holder in connection with such disposition, that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact relating to or provided by such Holder or its plan of distribution and that such Prospectus does not as of the time of such sale omit to state any material fact relating to or provided by such Holder or its plan of distribution necessary to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading.

(b) Each Holder agrees by acquisition of any Registrable Securities that upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to any Shelf Registration Statement until such Notice Holder’s receipt of copies of the supplemented or amended Prospectus provided for in Section 3(h)(i), or until it is advised in writing by the Company that the Prospectus may be used.

Section 5. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance by the Company of its obligations under Sections 2 and 3 of this Agreement whether or not any Shelf Registration Statement is declared effective. Such fees and expenses shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (x) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (y) of compliance with federal and state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of the Special Counsel in connection with Blue Sky qualifications of the Registrable Securities under the laws of such jurisdictions as Notice Holders of a majority of the Registrable Securities being sold pursuant to a Shelf Registration Statement may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company), (iii) duplication expenses relating to copies of any Shelf Registration Statement or Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of counsel for the Company in connection with any Shelf Registration Statement, (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock, (vi) Securities Act liability insurance obtained by the Company in its sole discretion

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and (vii) the reasonable fees and disbursements of Special Counsel. In addition, the Company shall pay the internal expenses of the Company (including, without limitation, all salaries and expenses of officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing by the Company of the Registrable Securities on any securities exchange on which similar securities of the Company are then listed and the fees and expenses of any person, including special experts, retained by the Company. Notwithstanding the provisions of this Section 5, each seller of Registrable Securities shall pay any broker’s commission, agency fee or underwriter’s discount or commission in connection with the sale of the Registrable Securities under a Shelf Registration Statement. Except as expressly provided in clauses (i)(y) and (vii) above, the Company shall not be responsible for the fees and expenses of any counsel, accountant or advisor for the sellers of Registrable Securities.

Section 6. Indemnification and Contribution.

(a) The Company agrees to indemnify and hold harmless each Notice Holder, each person, if any, who controls any such Notice Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Notice Holder within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement or any amendment thereof, any preliminary prospectus or any Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Holder furnished to the Company in writing by such Holder expressly for use therein; provided that the foregoing indemnity shall not inure to the benefit of any Holder (or to the benefit of any person controlling such Holder) from whom the person asserting such losses, claims or liabilities purchased the Registrable Securities, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Holder to such person, if required by law so to have been delivered at or prior to the written confirmation of the sale of the Registrable Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company with Section 2(c) hereof.

(b) Each Holder agrees severally and not jointly to indemnify and hold harmless the Company and its directors, its officers who sign any Shelf

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Registration Statement and each person, if any, who controls the Company (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or any other Holder, to the same extent as the foregoing indemnity from the Company to such Holder, but only with reference to information relating to such Holder furnished to the Company in writing by such Holder expressly for use in such Shelf Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability of any Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities pursuant to the Shelf Registration Statement giving rise to such indemnification obligation.

(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) hereof, such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed in writing to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by, in the case of parties indemnified pursuant to Section 6(a), the Holders of a majority (with Holders of Securities deemed to be the Holders, for purposes of determining such majority, of the number of shares of Underlying Common Stock into which such Securities are or would be convertible as of the date on which such designation is made) of the Registrable Securities covered by the Shelf Registration Statement held by Holders that are indemnified parties pursuant to Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b), the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated

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by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

(d) To the extent that the indemnification provided for in Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand or (ii) if the allocation provided by clause (i) above 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 indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company shall be deemed to be equal to the total net proceeds from the initial placement pursuant to the Purchase Agreement (before deducting expenses) of the Registrable Securities to which such losses, claims, damages or liabilities relate. The relative benefits received by any Holder shall be deemed to be equal to the value of receiving registration rights under this Agreement for the Registrable Securities. The relative fault of the Holders on the one hand and the Company on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Holders or by the Company, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Holders’ respective obligations to contribute pursuant to this Section 6(d) are several in proportion to the respective number of Registrable Securities they have sold pursuant to a Shelf Registration Statement, and not joint.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. The amount

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paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding this Section 6(d), no indemnifying party that is a selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by it and distributed to the public were offered to the public exceeds the amount of any damages that such indemnifying party has otherwise been required to pay by reason of 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e) The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies that may otherwise be available to an indemnified party at law or in equity, hereunder, under the Purchase Agreement or otherwise.

(f) The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder, any person controlling any Holder or any affiliate of any Holder or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) the sale of any Registrable Securities by any Holder.

Section 7. Information Requirements. The Company covenants that, if at any time before the end of the Effectiveness Period, the Company is not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder and take such further reasonable action as any Holder may reasonably request in writing (including, without limitation, making such reasonable representations as any such Holder may reasonably request), all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 and Rule 144A under the Securities Act and customarily taken in connection with sales pursuant to such exemptions. Upon the written request of any Holder, the Company shall deliver to such Holder a written statement as to whether it has complied with such filing requirements, unless such a statement has been included in the Company’s most recent report filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities (other than the Common Stock) under the Exchange Act.

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Section 8. Miscellaneous.

(a) No Conflicting Agreements. The Company is not, as of the date hereof, a party to, nor shall it, on or after the date of this Agreement, enter into, any agreement with respect to its securities that conflicts with the rights granted to the Holders in this Agreement. The Company represents and warrants that the rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company’s securities under any other agreements.

(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of the then outstanding Underlying Common Stock constituting Registrable Securities (with Holders of Securities deemed to be the Holders, for purposes of this Section, of the number of outstanding shares of Underlying Common Stock into which such Securities are or would be convertible as of the date on which such consent is requested). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Shelf Registration Statement; provided that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. Notwithstanding the foregoing sentence, this Agreement may be amended by written agreement signed by the Company and the Initial Purchasers, without the consent of the Holders of Registrable Securities, to cure any ambiguity or to correct or supplement any provision contained herein that may be defective or inconsistent with any other provision contained herein, or to make such other provisions in regard to matters or questions arising under this Agreement that shall not adversely affect the interests of the Holders of Registrable Securities. Each Holder of Registrable Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 8(b) whether or not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Registrable Securities or is delivered to such Holder.

(c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, by telecopier, by courier or by first-class mail, return receipt requested, and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one Business Day after being deposited with such courier, if made by overnight courier or (iv) on the date indicated on the notice of receipt, if made by first-class mail, to the parties as follows:

(i) if to a Holder, at the most current address given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto;

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(ii) if to the Company, to:

Blackrock, Inc.

40 East 52nd Street

New York, New York 10022

Attention: Robert P. Connolly, Esq.

Telecopy No.: 212-810-3744

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Attention: Richard L. Muglia, Esq.

Telecopy No.: 212-735-2000

(iii) if to the Initial Purchasers, to:

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York

Attention: Equity Capital Markets

Telecopy No.: (212) 761-0538

or to such other address as such person may have furnished to the other persons identified in this Section 8(c) in writing in accordance herewith.

(d) Approval of Holders. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) (other than the Initial Purchasers or subsequent Holders if such subsequent Holders are deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(e) Successors and Assigns. Any person who purchases any Registrable Securities from the Initial Purchasers shall be deemed, for purposes of this Agreement, to be an assignee of the Initial Purchasers. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties and shall inure to the benefit of and be binding upon each Holder of any Registrable Securities, provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise,

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such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities, such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such person shall be entitled to receive the benefits hereof.

(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement.

(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(i) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

(j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Registrable Securities. Except as provided in the Purchase Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and undertakings among the parties with respect to such registration rights. No party hereto shall have any rights, duties or obligations other than those specifically set forth in this Agreement. In no event will such methods of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company.

(k) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities or obligations under Section 4, 5 or 6 hereof and the obligations to make payments of and provide for liquidated damages under Section 2(e) hereof to the extent such damages accrue prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

BLACKROCK, INC.

By:

Name:

Title:

22

Confirmed and accepted as of

the date first above written, for itself and

as representative of the several Initial Purchasers:

MORGAN STANLEY & CO. INCORPORATED

By:

Name:

Title:

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EX-21.1

Exhibit 21.1

Subsidiaries of BlackRock, Inc.

The following table lists the direct and indirect subsidiaries of BlackRock, Inc. as of December 31, 2004:

Name	Jurisdiction of Incorporation or Organization
BlackRock Advisors, Inc.	Delaware
BlackRock Financial Management, Inc.	Delaware
BlackRock Institutional Management Corporation	Delaware
BlackRock Funding, Inc.	Delaware
BlackRock Funding International, Ltd.	Cayman Islands
BlackRock Investments, Inc.	Delaware
Advanced Investment Management, Inc.	West Virginia
BlackRock Overseas Investment Corp.	EDGE Act Corporation (U.S.)
Risk Monitors, Inc.	Pennsylvania
Investment Technology, LLC	Delaware
BlackRock (Japan), Inc.	Delaware
BlackRock Capital Management, Inc.	Delaware
BlackRock Asia Limited	Hong Kong
BlackRock International, Ltd.	Scotland (U.K.)
BlackRock Japan Holdings, Inc.	Delaware
Nomura BlackRock Asset Management Co., Ltd.	Japan
BlackRock Japan Co., Ltd.	Japan
BlackRock Advisors Singapore Pte. Ltd	Singapore
BlackRock Portfolio Holdings, Inc.	Delaware
BlackRock HPB Management LLC	Delaware
BlackRock Portfolio Investments, LLC	Delaware
BlackRock Absolute Return Partners (Offshore), Ltd.	Cayman Islands
BlackRock Funds Inflation Protected Bond Portfolio	Massachusetts
BlackRock Bond Allocation Target Shares Series C Portfolio	Delaware
BlackRock Bond Allocation Target Shares Series S Portfolio	Delaware
BlackRock Bond Allocation Target Shares Series M Portfolio	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements of BlackRock, Inc. listed below, of our report relating to the financial statements of BlackRock, Inc. and management’s report on the effectiveness of internal control over financial reporting dated March 4, 2005, (which report expresses an unqualified opinion on the consolidated financial statements and on management’s assessment of the effectiveness of internal control over financial reporting and includes an explanatory paragraph relating to the adoption of the fair value recognition provisions of SFAS No. 123, as amended by SFAS No. 148 during 2003) appearing in the Annual Report on Form 10-K of BlackRock, Inc. for the year ended December 31, 2004.

Form	Registration Statement No.	Description
S-8	333-68666	BlackRock, Inc. 1999 Stock Award and Incentive Plan
S-8	333-68668	BlackRock, Inc. Voluntary Deferred Compensation Plan
S-8	333-68670	BlackRock, Inc. 2001 Employee Stock Purchase Plan
S-8	333-50294	The PNC Financial Services Group, Inc. Incentive Savings Plan
S-8	333-32406	BlackRock, Inc. 1999 Stock Award and Incentive Plan, BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan and BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan
S-8	333-94287	Nonemployee Directors Stock Compensation Plan

/s/ Deloitte & Touche LLP

New York, NY

March 10, 2005

EX-31.1

Exhibit 31.1

CEO CERTIFICATION

I, Laurence D. Fink, certify that:

1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2004 of BlackRock, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2005	By:	/s/    LAURENCE D. FINK
		Laurence D. Fink
		Chairman & Chief Executive Officer

EX-31.2

Exhibit 31.2

CFO CERTIFICATION

I, Paul L. Audet, certify that:

1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2004 of BlackRock, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2005	By:	/s/    PAUL L. AUDET
		Paul L. Audet
		Managing Director & Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of BlackRock, Inc. (the “Company”) for the annual period ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Laurence D. Fink, as Chief Executive Officer of the Company, and Paul L. Audet, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/    LAURENCE D. FINK
Name:	Laurence D. Fink
Title:	Chief Executive Officer

Date: March 10, 2005

	/s/    PAUL L. AUDET
Name:	Paul L. Audet
Title:	Chief Financial Officer

Date: March 10, 2005