Exhibit (g)(1)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated _____________, between BlackRock
California Municipal Income Trust (the "Trust"), a Delaware business trust,
and BlackRock Advisors, Inc. (the "Advisor"), a Delaware corporation.
WHEREAS, Advisor has agreed to furnish investment
advisory services to BlackRock California Municipal Income Trust (the
"Trust"), a closed-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, this Agreement has been approved in accordance
with the provisions of the 1940 Act, and the Advisor is willing to furnish
such services upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises
and covenants herein contained and other good and valuable consideration,
the receipt of which is hereby acknowledged, it is agreed by and between
the parties hereto as follows:
1. In General. The Advisor agrees, all as more fully set
forth herein, to act as investment advisor to the Trust with respect to the
investment of the Trust's assets and to supervise and arrange for the
day-to-day operations of the Trust and the purchase of securities for and
the sale of securities held in the investment portfolio of the Trust.
2. Duties and Obligations of the Advisor with Respect to
Investment of Assets of the Trust. Subject to the succeeding provisions of
this section and subject to the direction and control of the Trust's Board
of Trustees, the Advisor shall (i) act as investment advisor for and
supervise and manage the investment and reinvestment of the Trust's assets
and in connection therewith have complete discretion in purchasing and
selling securities and other assets for the Trust and in voting, exercising
consents and exercising all other rights appertaining to such securities
and other assets on behalf of the Trust; (ii) supervise continuously the
investment program of the Trust and the composition of its investment
portfolio; (iii) arrange, subject to the provisions of paragraph 4 hereof,
for the purchase and sale of securities and other assets held in the
investment portfolio of the Trust; and (iv) provide investment research to
the Trust.
3. Duties and Obligations of Advisor with Respect to the
Administration of the Trust. The Advisor also agrees to furnish office
facilities and equipment and clerical, bookkeeping and administrative
services (other than such services, if any, provided by the Trust's
Custodian, Transfer Agent and Dividend Disbursing Agent and other service
providers) for the Trust. To the extent requested by the Trust, the Advisor
agrees to provide the following administrative services:
(a) Oversee the determination and publication of
the Trust's net asset value in accordance with the Trust's policy as
adopted from time to time by the Board of Trustees;
(b) Oversee the maintenance the Trust's
Custodian and Transfer Agent and Dividend Disbursing Agent of certain books
and records of the Trust as required under Rule 31a-1(b)(4) of the 1940 Act
and maintain (or oversee maintenance by such other persons as approved by
the Board of Trustees) such other books and records required by law or for
the proper operation of the Trust;
(c) Oversee the preparation and filing of the
Trust's federal, state and local income tax returns and any other required
tax returns;
(d) Review the appropriateness of and arrange
for payment of the Trust's expenses;
(e) Prepare for review and approval by officers
of the Trust financial information for the Trust's semi-annual and annual
reports, proxy statements and other communications with shareholders
required or otherwise to be sent to Trust shareholders, and arrange for the
printing and dissemination of such reports and communications to
shareholders;
(f) Prepare for review by an officer of the
Trust the Trust's periodic financial reports required to be filed with the
Securities and Exchange Commission ("SEC") on Form N-SAR and such other
reports, forms and filings, as may be mutually agreed upon;
(g) Prepare reports relating to the business and
affairs of the Trust as may be mutually agreed upon and not otherwise
appropriately prepared by the Trust's custodian, counsel or auditors;
(h) Prepare such information and reports as may
be required by any stock exchange or exchanges on which the Trust's shares
are listed;
(i) Make such reports and recommendations to the
Board of Trustees concerning the performance of the independent accountants
as the Board of Trustees may reasonably request or deems appropriate;
(j) Make such reports and recommendations to the
Board of Trustees concerning the performance and fees of the Trust's
Custodian and Transfer and Dividend disbursing agent as the Board of
Trustees may reasonably request or deems appropriate;
(k) Oversee and review calculations of fees paid
to the Trust's service providers;
(l) Oversee the Trust's portfolio and perform
necessary calculations as required under Section 18 of the 1940 Act;
(m) Consult with the Trust's officers,
independent accountants, legal counsel, custodian, accounting agent and
transfer and dividend disbursing agent in establishing the accounting
policies of the Trust and monitor financial and shareholder accounting
services;
(n) Review implementation of any share purchase
programs authorized by the Board of Trustees;
(o) Determine the amounts available for
distribution as dividends and distributions to be paid by the Trust to its
shareholders; prepare and arrange for the printing of dividend notices to
shareholders; and provide the Trust's dividend disbursing agent and
custodian with such information as is required for such parties to effect
the payment of dividends and distributions and to implement the Trust's
dividend reinvestment plan;
(p) Prepare such information and reports as may
be required by any banks from which the Trust borrows funds;
(q) Provide such assistance to the Custodian and
the Trust's counsel and auditors as generally may be required to properly
carry on the business and operations of the Trust;
(r) Assist in the preparation and filing of
Forms 3, 4, and 5 pursuant to Section 16 of the Securities Exchange Act of
1934, as amended, and Section 30(f) of the 1940 Act for the officers and
trustees of the Trust, such filings to be based on information provided by
those persons;
(s) Respond to or refer to the Trust's officers
or transfer agent, shareholder (including any potential shareholder)
inquiries relating to the Trust.
(t) Supervise any other aspects of the Trust's
administration as may be agreed to by the Trust and the Advisor.
All services are to be furnished through the medium of
any directors, officers or employees of the Advisor or its affiliates as
the Advisor deems appropriate in order to fulfill its obligations
hereunder.
The Trust will reimburse the Advisor or its affiliates
for all out-of-pocket expenses incurred by them in connection with the
performance of the administrative services described in this paragraph 3.
4. Covenants. In the performance of its duties under this
Agreement, the Advisor shall at all times conform to, and act in accordance
with, any requirements imposed by:
(a) (i) the provisions of the 1940 Act and the
Investment Advisers Act of 1940, as amended, and all applicable Rules and
Regulations of the Securities and Exchange Commission (the "SEC"); (ii) any
other applicable provision of law; (iii) the provisions of the Agreement
and Declaration of Trust and By-Laws of the Trust, as such documents are
amended from time to time; (iv) the investment objectives and policies of
the Trust as set forth in its Registration Statement on Form N-2; and (v)
any policies and determinations of the Board of Trustees of the Trust;
(b) will place orders either directly with the
issuer or with any broker or dealer. Subject to the other provisions of
this paragraph, in placing orders with brokers and dealers, the Advisor
will attempt to obtain the best price and the most favorable execution of
its orders. In placing orders, the Advisor will consider the experience and
skill of the firm's securities traders as well as the firm's financial
responsibility and administrative efficiency. Consistent with this
obligation, the Advisor may select brokers on the basis of the research,
statistical and pricing services they provide to the Trust and other
clients of the Advisor. Information and research received from such brokers
will be in addition to, and not in lieu of, the services required to be
performed by the Advisor hereunder. A commission paid to such brokers may
be higher than that which another qualified broker would have charged for
effecting the same transaction, provided that the Advisor determines in
good faith that such commission is reasonable in terms either of the
transaction or the overall responsibility of the Advisor to the Trust and
its other clients and that the total commissions paid by the Trust will be
reasonable in relation to the benefits to the Trust over the long-term. In
addition, the Advisor is authorized to take into account the sale of shares
of the Trust in allocating purchase and sale orders for portfolio
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Advisor), provided that the Advisor believes that the
quality of the transaction and the commission are comparable to what they
would be with other qualified firms. In no instance, however, will the
Trust's securities be purchased from or sold to the Advisor, or any
affiliated person thereof, except to the extent permitted by the SEC or by
applicable law;
(c) will maintain a policy and practice of
conducting its investment advisory services hereunder independently of the
commercial banking operations of its affiliates. When the Advisor makes
investment recommendations for the Trust, its investment advisory personnel
will not inquire or take into consideration whether the issuer of
securities proposed for purchase or sale for the Trust's account are
customers of the commercial department of its affiliates; and
(d) will treat confidentially and as proprietary
information of the Trust all records and other information relative to the
Trust, and the Trust's prior, current or potential shareholders, and will
not use such records and information for any purpose other than performance
of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which approval shall
not be unreasonably withheld and may not be withheld where the Advisor may
be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities,
or when so requested by the Trust.
5. Services Not Exclusive. Nothing in this Agreement
shall prevent the Advisor or any officer, employee or other affiliate
thereof from acting as investment advisor for any other person, firm or
corporation, or from engaging in any other lawful activity, and shall not
in any way limit or restrict the Advisor or any of its officers, employees
or agents from buying, selling or trading any securities for its or their
own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that the Advisor will undertake no activities
which, in its judgment, will adversely affect the performance of its
obligations under this Agreement.
6. Books and Records. In compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Advisor hereby agrees that all
records which it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any such records upon the
Trust's request. The Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. Agency Cross Transactions. From time to time, the
Advisor or brokers or dealers affiliated with it may find themselves in a
position to buy for certain of their brokerage clients (each an "Account")
securities which the Advisor's investment advisory clients wish to sell,
and to sell for certain of their brokerage clients securities which
advisory clients wish to buy. Where one of the parties is an advisory
client, the Advisor or the affiliated broker or dealer cannot participate
in this type of transaction (known as a cross transaction) on behalf of an
advisory client and retain commissions from one or both parties to the
transaction without the advisory client's consent. This is because in a
situation where the Advisor is making the investment decision (as opposed
to a brokerage client who makes his own investment decisions), and the
Advisor or an affiliate is receiving commissions from both sides of the
transaction, there is a potential conflicting division of loyalties and
responsibilities on the Advisor's part regarding the advisory client. The
Securities and Exchange Commission has adopted a rule under the Investment
Advisers Act of 1940, as amended, which permits the Advisor or its
affiliates to participate on behalf of an Account in agency cross
transactions if the advisory client has given written consent in advance.
By execution of this Agreement, the Trust authorizes the Advisor or its
affiliates to participate in agency cross transactions involving an
Account. The Trust may revoke its consent at any time by written notice to
the Advisor.
8. Expenses. During the term of this Agreement, the
Advisor will bear all costs and expenses of its employees and any overhead
incurred in connection with its duties hereunder and shall bear the costs
of any salaries or trustees fees of any officers or trustees of the Trust
who are affiliated persons (as defined in the 0000 Xxx) of the Advisor;
provided that the Board of Trustees of the Trust may approve reimbursement
to the Advisor of the pro rata portion of the salaries, bonuses, health
insurance, retirement benefits and all similar employment costs for the
time spent on Trust operations (other than the provision of investment
advice and administrative services required to be provided hereunder) of
all personnel employed by the Advisor who devote substantial time to Trust
operations or the operations of other investment companies advised by the
Advisor.
9. Compensation of the Advisor. (a) The Trust agrees to
pay to the Advisor and the Advisor agrees to accept as full compensation
for all services rendered by the Advisor as such, a monthly fee (the
"Investment Advisory Fee") in arrears at an annual rate equal to 0.60 % of
the average weekly value of the Trust's Managed Assets. "Managed Assets"
means the total assets of the Trust minus the sum of the accrued
liabilities (other than the aggregate indebtedness constituting financial
leverage). For any period less than a month during which this Agreement is
in effect, the fee shall be prorated according to the proportion which such
period bears to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the net
assets of the Trust shall be calculated pursuant to the procedures adopted
by resolutions of the Trustees of the Trust for calculating the value of
the Trust's assets or delegating such calculations to third parties.
10. Indemnity. (a) The Trust hereby agrees to indemnify
the Advisor, and each of the Advisor's directors, officers, employees,
agents, associates and controlling persons and the directors, partners,
members, officers, employees and agents thereof (including any individual
who serves at the Advisor's request as director, officer, partner, member,
trustee or the like of another entity) (each such person being an
"Indemnitee") against any liabilities and expenses, including amounts paid
in satisfaction of judgments, in compromise or as fines and penalties, and
counsel fees (all as provided in accordance with applicable state law)
reasonably incurred by such Indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which
such Indemnitee may be or may have been involved as a party or otherwise or
with which such Indemnitee may be or may have been threatened, while acting
in any capacity set forth herein or thereafter by reason of such Indemnitee
having acted in any such capacity, except with respect to any matter as to
which such Indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that such Indemnitee's action was in the
best interest of the Trust and furthermore, in the case of any criminal
proceeding, so long as such Indemnitee had no reasonable cause to believe
that the conduct was unlawful; provided, however, that (1) no Indemnitee
shall be indemnified hereunder against any liability to the Trust or its
shareholders or any expense of such Indemnitee arising by reason of (i)
willful misfeasance, (ii) bad faith, (iii) gross negligence or (iv)
reckless disregard of the duties involved in the conduct of such
Indemnitee's position (the conduct referred to in such clauses (i) through
(iv) being sometimes referred to herein as "disabling conduct"), (2) as to
any matter disposed of by settlement or a compromise payment by such
Indemnitee, pursuant to a consent decree or otherwise, no indemnification
either for said payment or for any other expenses shall be provided unless
there has been a determination that such settlement or compromise is in the
best interests of the Trust and that such Indemnitee appears to have acted
in good faith in the reasonable belief that such Indemnitee's action was in
the best interest of the Trust and did not involve disabling conduct by
such Indemnitee and (3) with respect to any action, suit or other
proceeding voluntarily prosecuted by any Indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action,
suit or other proceeding by such Indemnitee was authorized by a majority of
the full Board of Trustees of the Trust.
(b) The Trust shall make advance payments in
connection with the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Trust receives a written
affirmation of the Indemnitee's good faith belief that the standard of
conduct necessary for indemnification has been met and a written
undertaking to reimburse the Trust unless it is subsequently determined
that such Indemnitee is entitled to such indemnification and if the
trustees of the Trust determine that the facts then known to them would not
preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the Indemnitee shall provide a security for
such Indemnitee-undertaking, (B) the Trust shall be insured against losses
arising by reason of any lawful advance, or (C) a majority of a quorum
consisting of trustees of the Trust who are neither "interested persons" of
the Trust (as defined in Section 2(a)(19) of the 0000 Xxx) nor parties to
the proceeding ("Disinterested Non-Party Trustees") or an independent legal
counsel in a written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the Indemnitee ultimately will be found entitled to
indemnification.
(c) All determinations with respect to
indemnification hereunder shall be made (1) by a final decision on the
merits by a court or other body before whom the proceeding was brought that
such Indemnitee is not liable or is not liable by reason of disabling
conduct, or (2) in the absence of such a decision, by (i) a majority vote
of a quorum of the Disinterested Non-Party Trustees of the Trust, or (ii)
if such a quorum is not obtainable or, even if obtainable, if a majority
vote of such quorum so directs, independent legal counsel in a written
opinion. All determinations that advance payments in connection with the
expense of defending any proceeding shall be authorized shall be made in
accordance with the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these
provisions shall not exclude any other right to which such Indemnitee may
be lawfully entitled.
11. Limitation on Liability. (a) The Advisor will not be
liable for any error of judgment or mistake of law or for any loss suffered
by Advisor or by the Trust in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties
under this Agreement.
(b) Notwithstanding anything to the contrary
contained in this Agreement, the parties hereto acknowledge and agree that,
as provided in Section 5.1 of Article V of the Declaration of Trust, this
Agreement is executed by the Trustees and/or officers of the Trust, not
individually but as such Trustees and/or officers of the Trust, and the
obligations hereunder are not binding upon any of the Trustees or
Shareholders individually but bind only the estate of the Trust.
12. Duration and Termination. This Agreement shall become
effective as of the date hereof and, unless sooner terminated with respect
to the Trust as provided herein, shall continue in effect for a period of
two years. Thereafter, if not terminated, this Agreement shall continue in
effect with respect to the Trust for successive periods of 12 months,
provided such continuance is specifically approved at least annually by
both (a) the vote of a majority of the Trust's Board of Trustees or the
vote of a majority of the outstanding voting securities of the Trust at the
time outstanding and entitled to vote, and (b) by the vote of a majority of
the Trustees who are not parties to this Agreement or interested persons of
any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated by the Trust at any time, without the payment
of any penalty, upon giving the Advisor 60 days' notice (which notice may
be waived by the Advisor), provided that such termination by the Trust
shall be directed or approved by the vote of a majority of the Trustees of
the Trust in office at the time or by the vote of the holders of a majority
of the voting securities of the Trust at the time outstanding and entitled
to vote, or by the Advisor on 60 days' written notice (which notice may be
waived by the Trust). This Agreement will also immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of
the outstanding voting securities," "interested person" and "assignment"
shall have the same meanings of such terms in the 1940 Act.)
13. Notices. Any notice under this Agreement shall be in
writing to the other party at such address as the other party may designate
from time to time for the receipt of such notice and shall be deemed to be
received on the earlier of the date actually received or on the fourth day
after the postmark if such notice is mailed first class postage prepaid.
14. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. Any amendment of
this Agreement shall be subject to the 1940 Act.
15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York for
contracts to be performed entirely therein without reference to choice of
law principles thereof and in accordance with the applicable provisions of
the 1940 Act.
16. Use of the name BlackRock. The Advisor has consented
to the use by the Trust of the name or identifying word "BlackRock" in the
name of the Trust. Such consent is conditioned upon the employment of the
Advisor as the investment advisor to the Trust. The name or identifying
word "BlackRock" may be used from time to time in other connections and for
other purposes by the Advisor and any of its affiliates. The Advisor may
require the Trust to cease using "BlackRock" in the name of the Trust if
the Trust ceases to employ, for any reason, the Advisor, any successor
thereto or any affiliate thereof as investment advisor of the Trust.
17. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
on, and shall inure to the benefit of the parties hereto and their
respective successors.
18. Counterparts. This Agreement may be executed in
counterparts by the parties hereto, each of which shall constitute an
original counterpart, and all of which, together, shall constitute one
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized officers, all
as of the day and the year first above written.
BLACKROCK CALIFORNIA MUNICIPAL
INCOME TRUST
By:
--------------------------------
Name:
Title:
BLACKROCK ADVISORS, INC.
By:
--------------------------------
Name:
Title:
BlackRock Advisors, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
_______________, 2001
BlackRock California Municipal Income Trust
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
We are writing to confirm our understanding that
BlackRock California Municipal Income Trust (the "Trust") has a
nonexclusive, revocable license to use the word "BlackRock" in its name and
that if BlackRock Advisors, Inc. (the "Advisor") ceases to be the
investment advisor to the Trust, the Trust will cease using such name as
promptly as practicable, making all reasonable efforts to remove
"BlackRock" from its name including calling a special meeting of
stockholders.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the
Trust, has informed us that the provision described above is contained in
the Trust's investment management agreement, and that continued use of the
name "BlackRock" if the Advisor ceases to be the investment advisor would
probably violate those provisions of the 1940 Act, that require that the
Trust's name not be misleading.
Execution of this letter agreement on behalf of the Trust
will signify that the Trust understands that it has a nonexclusive,
revocable license to the use of the name "BlackRock."
BLACKROCK ADVISORS, INC.
By:
--------------------------------
Name:
Title:
BLACKROCK CALIFORNIA MUNICIPAL
INCOME TRUST
By:
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Name:
Title:
