Exhibit (g)(3)
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of July 19, 2001, between BlackRock
New York Municipal Income Trust, a Delaware business trust (the "Trust"),
BlackRock Advisors, Inc. a Delaware corporation (the "Advisor"), and
BlackRock Financial Management, Inc., a Delaware corporation (the
"Sub-Advisor").
WHEREAS, the Advisor has agreed to furnish investment
advisory services to the Trust, a closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Advisor wishes to retain the Sub-Advisor to
provide it with certain sub-advisory services as described below in
connection with Advisor's advisory activities on behalf of the Trust;
WHEREAS, the advisory agreement between the Advisor and
the Trust dated July 19, 2001 (such Agreement or the most recent successor
agreement between such parties relating to advisory services to the Trust
is referred to herein as the "Advisory Agreement") contemplates that the
Advisor may sub-contract investment advisory services with respect to the
Trust to a sub-advisor pursuant to a sub-advisory agreement agreeable to
the Trust and approved in accordance with the provisions of the 1940 Act;
and
WHEREAS, this Agreement has been approved in accordance
with the provisions of the 1940 Act, and the Sub-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. Appointment. The Advisor hereby appoints the
Sub-Advisor to act as sub-advisor with respect to the Trust and the
Sub-Advisor accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided.
2. Services of the Sub-Advisor. Subject to the succeeding
provisions of this section, the oversight and supervision of the Advisor
and the direction and control of the Trust's Board of Trustees, the
Sub-Advisor will perform certain of the day-to-day operations of the Trust
which may include one or more of the following services at the request of
the Advisor: (a) acting as investment advisor for and managing the
investment and reinvestment of those assets of the Trust as the Advisor may
from time to time request and in connection therewith have complete
discretion in purchasing and selling such 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; (b) arranging, subject to the provisions of paragraph 3 hereof, for
the purchase and sale of securities and other assets held in the investment
portfolio of the Trust; (c) providing investment research and credit
analysis concerning the Trust's investments, (d) assist the Advisor in
determining what portion of the Trust's assets will be invested in cash,
cash equivalents and money market instruments, (e) placing orders for all
purchases and sales of such investments made for the Trust, and (f)
maintaining the books and records as are required to support Trust
investment operations. At the request of the Advisor, the Sub-Advisor will
also, subject to the oversight and supervision of the Advisor and the
direction and control of the Trust's Board of Trustees, provide to the
Advisor or the Trust any of the facilities and equipment and perform any of
the services described in Section 3 of the Advisory Agreement. In addition,
the Sub-Advisor will keep the Trust and the Advisor informed of
developments materially affecting the Trust and shall, on its own
initiative, furnish to the Trust from time to time whatever information the
Sub-Advisor believes appropriate for this purpose. The Sub-Advisor will
periodically communicate to the Advisor, at such times as the Advisor may
direct, information concerning the purchase and sale of securities for the
Trust, including: (a) the name of the issuer, (b) the amount of the
purchase or sale, (c) the name of the broker or dealer, if any, through
which the purchase or sale is effected, (d) the CUSIP number of the
instrument, if any, and (e) such other information as the Advisor may
reasonably require for purposes of fulfilling its obligations to the Trust
under the Advisory Agreement. The Sub-Advisor will provide the services
rendered by it under this Agreement in accordance with the Trust's
investment objectives, policies and restrictions (as currently in effect
and as they may be amended or supplemented from time to time) as stated in
the Trust's Prospectus and Statement of Additional Information and the
resolutions of the Trust's Board of Trustees.
3. Covenants. In the performance of its duties under this
Agreement, the Sub-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 (the "Advisers Act") 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, as amended and
restated, 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 Sub-Advisor
will attempt to obtain the best price and the most favorable execution of
its orders. In placing orders, the Sub-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 Sub-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 or the Sub-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 Sub-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 Sub-Advisor determines in good faith that such commission
is reasonable in terms either of the transaction or the overall
responsibility of the Advisor and the Sub-Advisor to the Trust's and their
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 Sub-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 or the Sub-Advisor), provided that the
Sub-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, the Sub-Advisor or any affiliated person thereof, except to
the extent permitted by the SEC or by applicable law;
(c) will maintain books and records with respect
to the Trust's securities transactions and will render to the Advisor and
the Trust's Board of Trustees such periodic and special reports as they may
request;
(d) will maintain a policy and practice of
conducting its investment advisory services hereunder independently of the
commercial banking operations of its affiliates. When the Sub-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
(e) 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 Sub-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.
4. Services Not Exclusive. Nothing in this Agreement
shall prevent the Sub-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 Sub-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 Sub-Advisor will undertake no
activities which, in its judgment, will adversely affect the performance of
its obligations under this Agreement.
5. Books and Records. In compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Sub-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 Sub-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 (to the extent such books and
records are not maintained by the Advisor).
6. Agency Cross Transactions. From time to time, the Sub-
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 Sub-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 both parties to the transaction
without the advisory client's consent. This is because in a situation where
the Sub-Advisor is making the investment decision (as opposed to a
brokerage client who makes his own investment decisions), and the
Sub-Advisor or an affiliate is receiving commissions from one or both sides
of the transaction, there is a potential conflicting division of loyalties
and responsibilities on the Sub-Advisor's part regarding the advisory
client. The Securities and Exchange Commission has adopted a rule under the
Advisers Act which permits the Sub-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 Sub-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 Sub-Advisor.
7. Expenses. During the term of this Agreement, the Sub-
Advisor will bear all costs and expenses of its employees and any overhead
incurred by the Sub-Advisor in connection with its duties hereunder;
provided that the Board of Trustees of the Trust may approve reimbursement
to the Sub-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 Sub-Advisor who devote substantial time to
the Trust operations or the operations of other investment companies
advised or sub-advised by the Sub-Advisor.
8. Compensation.
(a) The Advisor agrees to pay to the Sub-Advisor
and the Sub-Advisor agrees to accept as full compensation for all services
rendered by the Sub-Advisor as such, a monthly fee in arrears at an annual
rate equal: (i) prior to July 31, 2002, to 38% of the monthly advisory fees
received by the Advisor, (ii) from August 1, 2002 to July 31, 2003, to 19%
of the monthly advisory fee received by the Advisor; and (iii) after July
31, 2003, 0% of the advisory fees received by the Advisor; provided that
thereafter the Sub-Advisor may be compensated at cost for any services
rendered to the Trust at the request of the Advisor and approved of by the
Board of Trustees. 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 Managed
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.
9. Indemnity.
(a) The Trust hereby agrees to indemnify the
Sub-Advisor and each of the Sub-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 Sub-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 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.
10. Limitation on Liability.
(a) The Sub-Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the 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, as
amended and restated, 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.
11. 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 a 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 (as
such term is defined in the 0000 Xxx) of any such party, 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 or the Advisor at any time, without the payment of any penalty, upon
giving the Sub-Advisor 60 days' notice (which notice may be waived by the
Sub-Advisor), provided that such termination by the Trust or the Advisor
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 Sub-Advisor on 60 days' written notice (which notice may
be waived by the Trust and the Advisor), and will terminate automatically
upon any termination of the Advisory Agreement between the Trust and the
Advisor. 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.)
12. 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.
13. 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.
14. 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.
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. 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 this
instrument to be executed by their duly authorized officers designated
below as of the day and year first above written.
BLACKROCK ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: President
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
BLACKROCK NEW YORK
MUNICIPAL INCOME TRUST
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: President, Chief Executive Officer
and Chief Financial Officer
