EX-24.2(g)(1)
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INVESTMENT MANAGEMENT AGREEMENT
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AGREEMENT, dated [ ] [ ], 2003 between Partners Balanced Trust (the
"Trust"), a Delaware statutory trust, and BlackRock Advisors, Inc. (the
"Advisor"), a Delaware corporation.
WHEREAS, 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, 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. The duties
and obligations of the Advisor set forth herein may be delegated to and
performed by any other person pursuant to a sub-advisory agreement which is
approved by the Trust's Board of Trustees and the shareholders of the Trust in
accordance with the 1940 Act.
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, Form N-CSR 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, 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 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 [ ]% 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, 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.
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.
PARTNERS BALANCED
TRUST
By:__________________________________
Name: Xxxx X. Xxxxxxxx
Title: Secretary
BLACKROCK ADVISORS, INC.
By:__________________________________
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
