BlackRock MuniYield Michigan Quality Fund, Inc.
File No. 811-07080
Sub-Item No. 77Q1(e) (Investment Advisory Contracts) -- Attachment
Attached please find an exhibit to Sub-Item 77Q1(e) of Form N-SAR, a copy of
the Amended and Restated Investment Management Agreement between BlackRock
MuniYield Michigan Quality Fund, Inc. and BlackRock Advisors, LLC.
Exhibit 77Q1(e)
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT, dated as of
September 14, 2015, between BlackRock MuniYield Michigan Quality Fund, Inc.
(the "Fund"), a Maryland corporation, and BlackRock Advisors, LLC (the
"Advisor"), a Delaware limited liability company.
WHEREAS, the Advisor has agreed to furnish investment advisory services to
the Fund, a closed-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Advisor and the Fund had entered into the Investment Management
Agreement, dated as of September 29, 2006 (the "Original Agreement");
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WHEREAS, the Advisor, in connection with the reorganization of the Fund with
BlackRock MuniYield Michigan Quality Fund II, Inc., effective as of
September 14, 2015, has agreed to reduce its Investment Advisory Fee with
respect to the Fund to an annual rate equal to 0.49% of the sum of the average
daily value of the Net Assets (as defined herein) of the Fund (the "New
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Investment Advisory Fee");
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WHEREAS, the Advisor and the Fund now desire to amend and restate the
Original Agreement to reflect the New Investment Advisory Fee; and
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
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act as investment advisor to the Fund with respect to the investment of the
Fund's assets and to supervise and arrange for the day to day operations of the
Fund and the purchase of securities for and the sale of securities held in the
investment portfolio of the Fund.
2. Duties and Obligations of the Advisor with Respect to Investment of
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Assets of the Fund. Subject to the succeeding provisions of this section and
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subject to the direction and control of the Fund's Board of Directors, the
Advisor shall (i) act as investment advisor for and supervise and manage the
investment and reinvestment of the Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Fund and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Fund;
(ii) supervise continuously the investment program of the Fund and the
composition of its investment portfolio; (iii) arrange, subject to the
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provisions of paragraph 4 hereof, for the purchase and sale of securities and
other assets held in the investment portfolio of the Fund; and (iv) provide
investment research to the Fund.
3. Duties and Obligations of Advisor with Respect to the Administration of
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the Fund. The Advisor also agrees to furnish office facilities and equipment
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and clerical, bookkeeping and administrative services (other than such
services, if any, provided by the Fund's Custodian, Transfer Agent and Dividend
Disbursing Agent and other service providers) for the Fund. To the extent
requested by the Fund, the Advisor agrees to provide the following
administrative services:
(a) Oversee the determination and publication of the Fund's net asset
value in accordance with the Fund's policy as adopted from time to time by the
Board of Directors;
(b) Oversee the maintenance by the Fund's Custodian and Transfer Agent
and Dividend Disbursing Agent of certain books and records of the Fund as
required under Rule 31a1(b)(4) of the 1940 Act and maintain (or oversee
maintenance by such other persons as approved by the Board of Directors) such
other books and records required by law or for the proper operation of the Fund;
(c) Oversee the preparation and filing of the Fund'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 Fund's
expenses;
(e) Prepare for review and approval by officers of the Fund financial
information for the Fund's semiannual and annual reports, proxy statements and
other communications with shareholders required or otherwise to be sent to Fund
shareholders, and arrange for the printing and dissemination of such reports
and communications to shareholders;
(f) Prepare for review by an officer of the Fund the Fund's periodic
financial reports required to be filed with the Securities and Exchange
Commission ("SEC") on Form NSAR, Form NCSR, Form NPX, Form NQ, and such other
reports, forms and filings, as may be mutually agreed upon;
(g) Prepare such reports relating to the business and affairs of the
Fund as may be mutually agreed upon and not otherwise appropriately prepared by
the Fund's custodian, counsel or auditors;
(h) Prepare such information and reports as may be required by any stock
exchange or exchanges on which the Fund's shares are listed;
(i) Make such reports and recommendations to the Board of Directors
concerning the performance of the independent accountants as the Board of
Directors may reasonably request or deems appropriate;
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(j) Make such reports and recommendations to the Board of Directors
concerning the performance and fees of the Fund's Custodian and Transfer and
Dividend Disbursing Agent as the Board of Directors may reasonably request or
deems appropriate;
(k) Oversee and review calculations of fees paid to the Fund's service
providers;
(l) Oversee the Fund's portfolio and perform necessary calculations as
required under Section 18 of the 1940 Act;
(m) Consult with the Fund's officers, independent accountants, legal
counsel, custodian, accounting agent and transfer and dividend disbursing agent
in establishing the accounting policies of the Fund and monitor financial and
shareholder accounting services;
(n) Review implementation of any share purchase programs authorized by
the Board of Directors;
(o) Determine the amounts available for distribution as dividends and
distributions to be paid by the Fund to its shareholders; prepare and arrange
for the printing of dividend notices to shareholders; and provide the Fund'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 Fund's dividend reinvestment plan;
(p) Prepare such information and reports as may be required by any banks
from which the Fund borrows funds;
(q) Provide such assistance to the Custodian and the Fund's counsel and
auditors as generally may be required to properly carry on the business and
operations of the Fund;
(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(h) of the 1940 Act for the officers and Directors of the Fund, such
filings to be based on information provided by those persons;
(s) Respond to or refer to the Fund's officers or transfer agent,
shareholder (including any potential shareholder) inquiries relating to the
Fund; and
(t) Supervise any other aspects of the Fund's administration as may be
agreed to by the Fund 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 Fund 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
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this paragraph 3. The Fund will reimburse the Advisor and its affiliates for
their costs in providing accounting services to the Fund.
4. Covenants.(a) In the performance of its duties under this Agreement, the
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Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by: (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; (ii) any other applicable provision of
law; (iii) the provisions of the Charter and By Laws of the Fund, as such
documents are amended from time to time; (iv) the investment objectives and
policies of the Fund as set forth in its Registration Statement on Form N-2
and/or the resolutions of the Board of Directors; and (v) any policies and
determinations of the Board of Directors of the Fund and
(b) In addition, the Advisor will:
(i) 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 Fund 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 Fund and its other clients and
that the total commissions paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long term. Subject to the foregoing and the
provisions of the 1940 Act, the Securities Exchange Act of 1934, as amended,
and other applicable provisions of law, the Advisor may select brokers and
dealers with which it or the Fund is affiliated;
(ii) 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
Fund, its investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase or sale
for the Fund's account are customers of the commercial department of its
affiliates; and
(iii) treat confidentially and as proprietary information of the Fund
all records and other information relative to the Fund, and the Fund'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 Fund, 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 Fund.
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5. Services Not Exclusive. Nothing in this Agreement shall prevent the
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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. Sub-Advisors. The Advisor may from time to time, in its sole discretion
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to the extent permitted by applicable law, appoint one or more sub-advisors,
including, without limitation, affiliates of the Advisor, to perform investment
advisory services with respect to the Fund. The Advisor may terminate any or
all sub-advisors in its sole discretion at any time to the extent permitted by
applicable law.
7. Books and Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such records upon the Fund'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.
8. Expenses. During the term of this Agreement, the Advisor will bear all
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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
directors' fees of any officers or directors of the Fund who are affiliated
persons (as defined in the ▇▇▇▇ ▇▇▇) of the Advisor; provided that the Board of
Directors of the Fund 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 Fund operations, (including,
without limitation, compliance matters) (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 Fund
operations or the operations of other investment companies advised by the
Advisor.
9. Compensation of the Advisor. (a) The Fund agrees to pay to the Advisor
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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 the amount set forth in Schedule A hereto of
the average daily value of the Fund's Net Assets. "Net Assets" means the total
assets of the Fund minus the sum of the accrued liabilities. It is understood
that the liquidation preference of any outstanding preferred stock (other than
accumulated dividends) is not considered a liability in determining the Fund's
Net Asset Value. 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 Funds shall be
calculated pursuant to the procedures adopted by resolutions of the Directors
of the Fund for calculating the value of the Fund's assets or delegating such
calculations to third parties.
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10. Indemnity.(a) The Fund may, in the discretion of the Board of Directors
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of the Fund, 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
Fund 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 Fund 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 Fund 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 Fund 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 Directors of
the Fund.
(b) The Fund may make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be sought
hereunder if the Fund 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 Fund unless it is
subsequently determined that such Indemnitee is entitled to such
indemnification and if the Directors of the Fund 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 security
for such Indemnitee undertaking, (B) the Fund shall be insured against losses
arising by reason of any unlawful advance, or (C) a majority of a quorum
consisting of Directors of the Fund who are neither "interested persons" of the
Fund (as defined in Section 2(a)(19) of the ▇▇▇▇ ▇▇▇) nor parties to the
proceeding ("Disinterested Non Party Directors") or an independent legal
counsel in a written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial type inquiry), that there is reason
to believe that the Indemnitee ultimately will be found entitled to
indemnification.
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(c) All determinations with respect to the standards for 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 Directors of the Fund, 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 and
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
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error of judgment or mistake of law or for any loss suffered by Advisor or by
the Fund 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. As used in this
Section 11(a), the term "Advisor" shall include any affiliates of the Advisor
performing services for the Fund contemplated hereby and partners, directors,
officers and employees of the Advisor and of such affiliates.
12. Duration and Termination. This Agreement shall become effective as of
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the date hereof and, unless sooner terminated with respect to the Fund as
provided herein, shall continue in effect until June 30, 2016. Thereafter, if
not terminated, this Agreement shall continue in effect with respect to the
Fund 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 Fund's Board of Directors or the vote of a majority of the outstanding
voting securities of the Fund at the time outstanding and entitled to vote, and
(b) by the vote of a majority of the Directors 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 Fund 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 Fund shall be directed or approved by the vote of a majority of the
Directors of the Fund in office at the time or by the vote of the holders of a
majority of the voting securities of the Fund at the time outstanding and
entitled to vote, or by the Advisor on 60 days' written notice (which notice
may be waived by the Fund). 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
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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.
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14. Amendment of this Agreement. This Agreement may be amended by the
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parties only if such amendment is specifically approved by the vote of the
Board of Directors of the Fund, including a majority of those Directors who are
not parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval and,
where required by the 1940 Act, by a vote of a majority of the outstanding
voting securities of the Fund.
15. Governing Law. This Agreement shall be governed by and construed in
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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. To the extent that
the applicable laws of the State of New York, or any of the provisions,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
16. Use of the Name BlackRock. The Advisor has consented to the use by the
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Fund of the name or identifying word "BlackRock" in the name of the Fund. Such
consent is conditioned upon the employment of the Advisor as the investment
advisor to the Fund. 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 Fund to cease using "BlackRock"
in the name of the Fund if the Fund ceases to employ, for any reason, the
Advisor, any successor thereto or any affiliate thereof as investment advisor
of the Fund.
17. Miscellaneous. The captions in this Agreement are included for
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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
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parties hereto, each of which shall constitute an original counterpart, and all
of which, together, shall constitute one Agreement.
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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 MUNIYIELD MICHIGAN QUALITY
FUND, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
BLACKROCK ADVISORS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
[SIGNATURE PAGE TO A&R INVESTMENT MANAGEMENT AGREEMENT]
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Schedule A
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Investment Advisory Fee
0.49% of average daily Net Assets of the Fund.