Exhibit 99.8(a)
BLACKROCK FUNDS(SM)
ADMINISTRATION AGREEMENT
AGREEMENT dated as of May 13, 1998 by and among BLACKROCK FUNDS(SM), a
Massachusetts business trust (the "Company"), BLACKROCK ADVISORS, INC., a
Delaware corporation ("BlackRock"), and PFPC INC., a Delaware corporation
("PFPC") (BlackRock and PFPC are hereinafter collectively referred to as the
"Administrators").
WHEREAS, the Company is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain separately the Administrators to
provide certain administration services as set forth herein and to retain PFPC
to provide certain accounting services as set forth herein for each class of
units of beneficial interest ("shares") in each of the Company's investment
portfolios (individually, a "Fund," and collectively, the "Funds") as listed on
Appendix A hereto (as such Appendix may, from time to time, be supplemented (or
amended)), and the Administrators are willing to furnish such administration
services, and PFPC is willing to furnish such accounting services; and
WHEREAS, certain of the services to be provided under this Agreement relate
to particular classes of shares of a Fund and the holders thereof, while other
services to be provided hereunder relate to all share classes of a Fund as set
forth herein; and
WHEREAS, pursuant to Rule 18f-3 under the 1940 Act the Board of Trustees of
the Company, including a majority of its "non-interested" members as defined in
the 1940 Act, has found that it is in the best interests of each Fund and its
individual share classes that those administrative expenses that relate to a
particular class of shares be charged to the share class for which such expenses
are incurred;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, it is agreed between the
parties hereto as follows:
1. Appointment of Administrators. The Company hereby appoints BlackRock to
provide the administration services as specified below that have been designated
to it, PFPC to provide the administration services as specified below that have
been designated to it, and PFPC to provide accounting services as specified
below that have been designated to it, for the particular class(es) of shares as
specified below in each of the Company's Funds, on the terms and for the period
set forth in this Agreement. Each of BlackRock and PFPC accepts such respective
appointments and agrees to perform the services and duties set forth in Section
5 below that have been designated to it in return for the compensation provided
in Section 7 below. In the event that the Company establishes an additional
class of shares or investment portfolio other than the classes and investment
portfolios listed on Appendix A with respect to which it desires to retain
BlackRock and PFPC to provide the respective administration services specified
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below and PFPC to provide the accounting services specified below, the Company
shall notify BlackRock and PFPC, whereupon with the consent of BlackRock and
PFPC such Appendix A shall be supplemented (or amended) and such class or
portfolio shall be subject to the provisions of this Agreement to the same
extent as the classes and investment portfolios currently listed on Appendix A
(except to the extent that said provisions, including the compensation payable
on behalf of such new class or investment portfolio, may be modified in writing
by the Company and Administrators at the time).
2. Delivery of Documents. The Company has furnished each of the
Administrators with copies, properly certified or authenticated, of each of the
following documents and will deliver to each of them all future amendments and
supplements, if any:
a. The Company's Declaration of Trust, filed with the Secretary of
State of the Commonwealth of Massachusetts on December 22, 1988, as amended
(the "Charter");
b. The Company's Code of Regulations, as amended (the "Code");
c. Resolutions of the Company's Board of Trustees authorizing the
execution and delivery of this Agreement;
d. The Company's most recent amendment to its Registration Statement
under the Securities Act of 1933, as amended, and under the 1940 Act on
Form N-1A as filed with the Securities and Exchange Commission (the
"Commission") relating to its Funds (the Registration Statement, as
presently in effect and as amended or supplemented from time to time, is
herein called the "Registration Statement");
e. The Company's most recent Prospectuses and Statements of Additional
Information and all amendments and supplements thereto (such Prospectuses
and Statements of Additional Information and supplements thereto, as
presently in effect and as from time to time amended and supplemented, are
herein called the "Prospectuses");
f. The Company's Amended and Restated Distribution and Service Plan
relating to the respective classes of shares of the Company's investment
portfolios and any amended or successor plan (the "Plan"); and
g. The Investment Advisory Agreements relating to the Funds.
3. Instructions. Each Administrator shall be entitled to rely upon any Oral
Instruction or Written Instruction it receives from an Authorized Person (or a
person believed by the Administrator to be an Authorized Person). For purposes
of this Agreement: (1) "Authorized Persons" shall be any officer of the Company
and any other person authorized by the Company to provide instructions on behalf
of the Company; (2) "Oral Instructions" mean oral instructions received by the
Administrator to whom the instruction is addressed from an Authorized Person or
a person reasonably believed by the Administrator to be an Authorized Person;
and (3) "Written Instructions" mean written instructions received by the
Administrator to
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whom the instruction is addressed and signed by an Authorized Person or a person
reasonably believed by the Administrator to be an Authorized Person. The
Administrators shall be entitled to assume that any Oral Instruction or Written
Instruction they receive is not in any way inconsistent with the provisions of
the Company's organizational documents or this Agreement or any vote, resolution
or proceeding of the Company's Board of Trustees or its shareholders.
4. Right to Receive Advice. If an Administrator is in doubt as to any
action it should or should not take, it may request directions or advice,
including Oral Instructions or Written Instructions, from the Company. If an
Administrator shall be in doubt as to any question of law pertaining to any
action it should or should not take, it may request advice at its own cost from
such counsel of its own choosing (who may be counsel for the Company, the
Company's investment adviser or the Administrator, at the option of the
Administrator). In the event of a conflict between directions, advice or Oral
Instructions or Written Instructions an Administrator receives from the Company
and the advice it receives from counsel, the Administrator may rely upon and
follow the advice of counsel. Each Administrator shall be protected in any
action it takes or does not take in reliance upon directions, advice or Oral
Instructions or Written Instructions it receives from the Company or from
counsel and which the Administrator believes, in good faith, to be consistent
with those directions, advice or Oral Instructions or Written Instructions.
Nothing in this Section shall be construed so as to impose an obligation upon an
Administrator (i) to seek such directions, advice or Oral Instructions or
Written Instructions or (ii) to act in accordance with such directions, advice
or Oral Instructions or Written Instructions.
5. Services and Duties. BlackRock will perform the services set forth below
that are designated to it, and PFPC will perform the services set forth below
that are designated to it. Each Administrator will be responsible only for the
services it has agreed to provide herein, and not for the services provided by
the other Administrator or any other services.
a. Subject to the supervision and control of the Company's Board of
Trustees, BlackRock shall assist in supervising all aspects of the Funds'
operations, other than (i) those investment advisory functions which are to
be performed by the Company's investment advisers pursuant to the Company's
Investment Advisory Agreements, as amended from time to time, (ii) those
advisory and other services to be performed by any sub-adviser pursuant to
the Company's Sub-Advisory Agreements, as amended from time to time, (iii)
those services to be performed by the custodian pursuant to the Company's
Custodian Agreement, as amended from time to time, (iv) those services to
be performed by the distributor pursuant to the Company's Distribution
Agreement, as amended from time to time, (v) those services to be performed
by the transfer agent pursuant to the Company's Transfer Agency Agreement,
as amended from time to time, and (vi) those services provided under the
Plan.
b. Without limiting the generality of Section 5.a, PFPC shall provide
the following services with respect to each individual class of shares of
the Funds and the shareholders thereof (the "Class-Specific Administration
Services") as indicated below:
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(1) With respect to the Investor, Service and Institutional share
classes of each Fund, providing personnel and supervising a facility
in Wilmington, Delaware (or in such other location as the Company
shall reasonably request) to receive purchase and redemption orders
via the Company's toll-free in-WATS telephone lines and transmitting
such requests to the Company's transfer agent as promptly as
practicable;
(2) With respect to all share classes of each Fund, providing for
the preparation, supervision and mailing of confirmations for all
purchase and redemption orders to shareholders of record;
(3) With respect to all share classes of each Fund, providing and
supervising the operation of an automated data processing system to
process purchase and redemption orders (PFPC assumes responsibility in
accordance with the standard of care provided for herein for the
accuracy of the data transmitted for processing or storage, provided
such data is received by PFPC in good form and in a format acceptable
to it);
(4) With respect to all share classes of each Fund, maintaining a
procedure external to the transfer agent's system to reconstruct lost
purchase and redemption data;
(5) With respect to the Investor and Service share classes of
each Fund, calculating the amount of fees payable with respect to the
Plan with respect to such class of shares on a daily basis and upon
instruction from the Company remitting such fees pursuant to the Plan;
and
(6) With respect to various share classes of each Fund,
calculating and reporting to third party industry data services (e.g.,
NASDAQ, Lipper Analytical Services, Inc.) certain performance and
other information.
c. Without limiting the generality of Section 5.a, BlackRock shall
provide the following Class-Specific Administration Services with respect
to each individual class of shares of the Funds and the shareholders
thereof as indicated below:
(1) With respect to all share classes of each Fund, providing
information and distributing written communications concerning the
particular class of shares to their shareholders of record; handling
shareholder problems and calls;
(2) With respect to the Investor, Service and Institutional share
classes of each Fund, supervising the services of individuals
("shareholder representatives") whose principal responsibility and
function shall be to preserve and strengthen the Company's
relationships with the shareholders of such class;
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(3) With respect to the Investor and Service share classes of
each Fund, monitoring the Company's arrangements with respect to
services provided by certain institutional shareholders ("Service
Organizations") under the Plan, including monitoring and reviewing the
services rendered by Service Organizations to their customers who
beneficially own shares of such class, pursuant to agreements between
the Company and such Service Organizations ("Servicing Agreements");
reviewing the qualifications of Service Organizations wishing to enter
into Servicing Agreements with the Company; assisting in the execution
and delivery of Servicing Agreements; monitoring the operations of the
Plan; monitoring the activities of the Company's transfer agent
relating to the calculation of front-end sales charges and contingent
deferred sales charges payable in connection with the purchase and
redemption of shares, and the payment of all such sales charges to the
Company's distributor or others (subject to the applicable limitations
of the National Association of Securities Dealers, Inc. on asset-based
sales charges); reporting to the Company's Board of Trustees with
respect to the amounts paid or payable by the Company from time to
time under the Plan and the nature of the services provided by Service
Organizations; and maintaining appropriate records in connection with
such duties;
(4) With respect to the Institutional share class of each Fund,
monitoring the Company's arrangements with respect to institutional
investors and financial intermediaries ("Participating Institutions")
purchasing shares on behalf of their customers and program
participants, including monitoring and reviewing services rendered by
Participating Institutions to their customers; providing and
supporting customized purchase and redemption procedures; providing
specialized performance reporting as required by Participating
Institutions; and monitoring the percentage investment by
Participating Institutions which are investment companies for purposes
of compliance with 1940 Act limitations;
(5) With respect to the Investor, Service and Institutional share
classes of each Fund, maintaining the Company's relationships with
third-party industry data services, such as NASDAQ and Lipper
Analytical Services, Inc. and reporting to such services with respect
to ticker symbols, performance information and other information
regarding the Funds, as appropriate;
(6) With respect to the Investor, Service and Institutional share
classes of each Fund, monitoring the investor programs that are
offered from time to time in connection with such class of shares;
(7) With respect to all share classes of each Fund, providing
oversight and related support services that are intended to ensure the
delivery of quality service to the shareholders of such class; and
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(8) With respect to all share classes of each Fund, providing
such other similar services as the Company may reasonably request.
d. Without limiting the generality of Section 5.a, BlackRock shall
provide the following services which are intended to benefit all the
classes of shares of a Fund (the "Fund-General Administration Services"):
(1) The oversight and coordination of the performance of each of
the service providers to the Company, including without limitation,
its investment advisers, sub-advisers, other administrators and
sub-administrators (if any), transfer agent, custodian, distributor,
shareholder servicing agents, legal counsel and independent auditors;
(2) The negotiation of service contracts and arrangements between
the Company and each of its service providers;
(3) Acting as liaison between the Company's Board of Trustees and
its service providers;
(4) Assisting in the preparation of materials for meetings of the
Company's Board of Trustees and shareholders;
(5) Providing general ongoing business management and support
services in connection with the Company's operations;
(6) After consultation with the distributor and counsel for the
Company, determining the jurisdictions in which the Funds' shares
shall be registered or qualified for sale;
(7) Assisting in monitoring of regulatory and legislative
developments which may affect the Funds; assisting in counseling the
Funds with respect to regulatory examinations or investigations; and
working with the Company's counsel in connection with regulatory
matters or litigation;
(8) Participating to the extent reasonably requested by the
Company and its counsel in the periodic updating of the Company's
Registration Statement;
(9) Compiling data and accumulating information for and
coordinating with the Company's Treasurer or Assistant Treasurer the
preparation of reports to shareholders of record and the Commission
(other than those reports required to be prepared and filed by PFPC
hereunder);
(10) Filing with the Commission and other federal and state
agencies, subject to the approval of the Company's Treasurer or
Assistant Treasurer, reports and documents other than those reports
and documents required to be filed by
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PFPC hereunder and those reports and documents required to be filed by
the Company's custodian or transfer agent;
(11) Monitoring, and assisting in developing, compliance
procedures for each of the Funds, which will include without
limitation, procedures to monitor compliance with each Fund's
investment objective, policies and limitations, tax matters, and
applicable laws and regulations; and
(12) Monitoring the Funds' expenses.
e. Without limiting the generality of Section 5.a, PFPC shall provide
the following Fund-General Administration Services:
(1) Maintaining required financial accounts, records, journals,
ledgers and schedules for each Fund (other than those maintained or
required to be maintained by the Company's custodian or transfer
agent), and installing and maintaining a system of internal accounting
controls appropriate for entities of the size and complexity of each
Fund;
(2) Participating to the extent reasonably requested by the
Company and its counsel in the periodic updating of the Company's
Registration Statement;
(3) In coordination with the Company's Treasurer or Assistant
Treasurer and with assistance of Company counsel, preparing and filing
the Company's Annual and Semi-Annual Reports on Form N-SAR;
(4) In coordination with the Company's Treasurer or Assistant
Treasurer, preparing and filing with the Commission the Funds' annual
and semi-annual shareholder reports;
(5) In coordination with the Company's Treasurer or Assistant
Treasurer, preparing for execution and filing the Company's Form
24F-2;
(6) Preparing for execution and (subject to the approval of the
Company's Treasurer or Assistant Treasurer) filing the Company's
federal and state tax returns;
(7) Pursuant to the instruction of the Company, preparing and
filing documentation with applicable states relating to the initial
registration or qualification of shares in such states as the Company
shall direct. Payment of applicable fees shall be made by the Company
or Fund involved;
(8) Maintaining the registration or qualification of shares for
sale under the securities laws of such states as PFPC shall be
initially instructed by the Company and preparing compliance filings
pursuant to the securities laws of such
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states. Payment of applicable fees shall be made by the Company or
Fund involved;
(9) Preparing and filing name change applications pursuant to the
securities laws of various states, as instructed by the Company.
Payment of applicable fees shall be made by the Company or Fund
involved;
(10) Providing reports, financial statements and other
statistical data as reasonably requested from time to time by the
Company;
(11) Assisting in the preparation of materials for meetings of
the Company's Board of Trustees and shareholders;
(12) Monitoring each Fund's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986 (as
amended);
(13) Preparing and providing to the Company a standard quarterly
brokerage commission summary, showing the commissions paid per broker;
(14) Verifying investment buy/sell trade tickets when received
from a Fund's investment adviser (the "Adviser") and transmitting
trades to the Fund's custodian (the "Custodian") for settlement;
(15) Reconciling cash and investment balances of a Fund with the
Custodian, and providing the Adviser with the beginning cash balance
available for investment purposes;
(16) Calculating various contractual expenses (e.g., advisory
fees);
(17) Upon receipt of necessary information from the Company,
assisting in the monitoring and budgeting of expense accruals;
(18) Obtaining security market quotes from independent sources
approved by the Adviser, or if such quotes are unavailable, then
obtaining such prices from the Adviser, in connection with valuing a
Fund's assets;
(19) Computing each Fund's net asset value, net income and net
capital gain (loss) in accordance with the Fund's Prospectus and the
resolutions of the Company's Board of Trustees;
(20) Reporting the net asset value of each Fund on a daily basis
to NASDAQ with respect to each share class that qualifies under NASDAQ
reporting requirements;
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(21) Providing periodic reports to the Company regarding
"investment company taxable income" and "net capital gain"
distributions in connection with certain tax-related distribution
requirements applicable to the Company;
(22) Providing periodic reports to the specified Adviser
regarding a Fund's unrealized and realized capital gains, containing
such standard information and employing such form of report as PFPC
may from time to time determine;
(23) Together with the Company's Treasurer or Assistant
Treasurer, acting as liaison with the Company's independent public
accountants, and providing account analyses, fiscal year summaries and
other audit related schedules. PFPC shall take all reasonable action
in the performance of its obligations under this Agreement to assure
that the necessary information is made available to such accountants
for the expression of their opinion, as such may be required by the
Company from time to time.
f. Without limiting any other provision of this Section 5, each of the
Administrators separately agrees to provide the following services (and
neither Administrator shall be responsible for the provision of such
services by the other Administrator):
(1) In compliance with the requirements of Rule 31a-3 under the
1940 Act, each Administrator agrees that all records which it
maintains for the Company are the property of the Company and further
agrees to surrender promptly to the Company any of such records upon
the Company's request. Copies of any such records maintained by an
Administrator will be provided by such Administrator to the Company at
the Company's expense. Each Administrator 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 said Act that
relate to the services it provides hereunder.
(2) With respect only to the services designated to it hereunder,
(i) in the event of equipment failures beyond PFPC's control, PFPC
shall, at no additional expense to the Company, take reasonable steps
to minimize service interruptions but shall have no liability with
respect thereto and (ii) PFPC shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
(3) In performing their respective services and duties hereunder,
each of the Administrators will act in conformity with the Charter,
Code, Prospectuses and resolutions and other instructions of the
Company's Board of Trustees and will comply with the requirements of
the 1940 Act and other applicable federal or state law, but neither
Administrator shall be responsible for compliance by the Company or
the other Administrator with any of the foregoing items.
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6. Expenses Assumed as Administrators. Each Administrator will bear all
expenses incurred by it in performing the services and duties designated to it
under this Agreement, except as otherwise expressly provided herein. Other
expenses to be incurred in the operation of the Funds, including taxes,
interest, brokerage fees and commissions, if any, salaries and fees of officers
and trustees who are not officers, directors, shareholders or employees of the
Administrators, or the Company's investment adviser or the distributor for the
Funds, Commission fees and state Blue Sky qualification fees, advisory and
administration fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, outside auditing and legal expenses,
costs of outside pricing services, costs of maintaining corporate existence,
typesetting and printing of prospectuses for regulatory purposes and for
distribution to current shareholders of the Funds, costs of shareholders'
reports and corporate meetings and any extraordinary expenses, will be borne by
the Company, provided, however, that the Company will not bear, directly or
indirectly, the cost of any activity which is primarily intended to result in
the sale of shares of the Funds otherwise than pursuant to the Plan.
7. Compensation.
a. For the Class-Specific Administration Services provided pursuant to
Sections 5.b and 5.c above and the related expenses assumed with respect to
those services, the Company will pay to BlackRock and PFPC an aggregate monthly
fee based on the net assets allocated to the respective classes of shares of
each Fund, initially in the amounts or at rates set forth on Appendix B hereto,
and as modified by agreement of the Administrators and the Company from time to
time, together with out-of-pocket expenses (the "Class-Specific Administration
Fees"). The Class-Specific Administration Fee attributable to each class of
shares shall be borne solely by the shares of that class.
b. For the Fund-General Administration Services and other services provided
pursuant to Sections 5.a, 5.d, 5.e, and 5.f above and the related expenses
assumed with respect to those services, the Company will pay to BlackRock and
PFPC an aggregate monthly fee based on the net assets of each Fund, initially in
the amounts or at rates set forth on Appendix B hereto, and as modified by
agreement of the Administrators and the Company from time to time, together with
out-of-pocket expenses (the "Fund-Based Administration Fees"). The Fund-Based
Administration Fee attributable to each Fund shall be borne solely by the shares
of that Fund.
c. The Class-Specific Administration Fees and the Fund-Based Administration
Fees shall be allocated between the Administrators as agreed to by BlackRock and
PFPC from time to time. For the purpose of determining fees payable to the
Administrators under this Agreement, the value of net assets shall be computed
and allocated as required by the Funds' Prospectuses, generally accepted
accounting principles and resolutions of the Company's Board of Trustees.
d. Each Administrator will from time to time employ or associate with
itself such person or persons as it may believe to be fit to assist it in the
performance of this Agreement. Such person or persons may be officers and
employees who are employed by both the Company and the applicable Administrator.
The compensation of such person or persons
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shall be paid by the Administrator utilizing the services of such person, and no
obligation shall be incurred on behalf of the Company in such respect.
8. Sub-Contracting. BlackRock and PFPC are hereby separately authorized to
retain third parties and are hereby separately authorized to delegate some or
all of their respective duties and obligations hereunder to such person or
persons, provided that BlackRock or PFPC, as the case may be, shall remain
responsible for the performance of such duties and obligations to the extent
provided for under this Agreement. The compensation of such person or persons
shall be paid by BlackRock or PFPC, as applicable, and no obligation shall be
incurred on behalf of the Company in such respect.
9. Proprietary and Confidential Information. Each Administrator agrees on
behalf of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and its Funds and prior, present or potential shareholders, and not to
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 Company, which approval shall not be unreasonably
withheld and may not be withheld where the Administrator 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 Company.
10. Limitations of Liability. Each Administrator shall exercise care and
diligence in rendering its services listed in Section 5 above. Neither
Administrator shall be liable for any error of judgment or mistake of law, for
any loss of data or service interruptions caused by equipment failure, or for
any loss suffered by the Company in connection with the matters to which this
Agreement relates, except 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 obligations and duties under this Agreement. Any
person, even though also an officer, director, employee or agent of a particular
Administrator, who may be or become an officer, employee or agent of the
Company, shall be deemed, when rendering services to the Company or acting on
any business of the Company (other than services or business in connection with
such Administrator's duties hereunder) to be rendering such services to or
acting solely for the Company and not as an officer, director, employee or agent
or one under the control or direction of such Administrator even though paid by
it.
Neither Administrator will be responsible for losses beyond its control.
Notwithstanding anything in this Agreement to the contrary, neither
Administrator (nor its affiliates) shall be liable for any consequential,
special or indirect losses or damages, regardless of whether the likelihood of
such losses or damages was known by the Administrator.
11. Indemnification. The Company agrees to separately indemnify and hold
harmless each Administrator (and its affiliates) from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
attorneys' fees and disbursements) arising directly or indirectly from any
action or omission to act which the Administrator takes (i) in connection with
its provision of services hereunder; (ii) at the request or on the direction of
or in
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reliance on the advice of the Company; or (iii) upon Oral Instructions or
Written Instructions; provided, however, that neither Administrator (nor any of
its affiliates (not, in the case of BlackRock to include PFPC, or in the case of
PFPC to include BlackRock)) shall be indemnified against any liability (or any
expenses incident to such liability) arising out of its (or its affiliates'
(not, in the case of BlackRock to include PFPC, or in the case of PFPC to
include BlackRock)) own willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties and obligations under this Agreement.
12. Duration and Termination. (a) Unless sooner terminated as provided in
this Section 12.a, this Agreement shall continue in effect as between the
Company and BlackRock until one year after the date first written above.
Thereafter, if not terminated, this Agreement shall continue automatically as
between the Company and BlackRock for successive terms of one year, provided
that such continuance is specifically approved at least annually (a) by a vote
of a majority of those members of the Company's Board of Trustees who are not
parties to this Agreement or "interested persons" of such party, cast in person
at a meeting called for the purpose of voting on such approval, and (b) by the
Company's Board of Trustees or by vote of a "majority of the outstanding voting
securities" of the Company; provided, however, that this Agreement may be
terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board of Trustees or a vote of a "majority of
the outstanding voting securities" of the Company, on sixty (60) days prior
written notice to BlackRock or by BlackRock at any time, without the payment of
any penalty, on sixty (60) days prior written notice to the Company. (As used in
this Agreement, the terms "majority of the outstanding voting securities" and
"interested person" shall have the same meaning as such terms have in the 1940
Act.)
(b) Unless sooner terminated as provided in this Section 12.b, this
Agreement shall continue in effect as between the Company and PFPC until one
year after the date first written above. Thereafter, if not terminated, this
Agreement shall continue automatically as between the Company and PFPC for
successive terms of one year, provided that such continuance is specifically
approved at least annually (a) by a vote of a majority of those members of the
Company's Board of Trustees 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 (b) by the Company's Board of Trustees or by
vote of a "majority of the outstanding voting securities" of the Company,
provided, however, that this Agreement may be terminated by the Company at any
time, without the payment of any penalty, by vote of a majority of the entire
Board of Trustees or a vote of a "majority of the outstanding voting securities"
of the Company, on sixty (60) days prior written notice to PFPC or by PFPC at
any time, without the payment of any penalty, on sixty (60) days prior written
notice to the Company.
13. Amendment of this Agreement. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought.
14. Assignment; Delegation. Separate and apart from and without requiring
compliance with the provisions of Section 8 hereof, PFPC and BlackRock may each
assign its
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respective rights and delegate its respective duties hereunder to any affiliate
(as defined in the 0000 Xxx) of or any majority-owned direct or indirect
subsidiary of itself or of PNC Bank Corp., provided that (i) the
assigning/delegating party gives the Company 15 days prior written notice of
such assignment or delegation, (ii) the assignee or delegate agrees to comply
with the relevant provisions of the 1940 Act, and (iii) the assigning/delegating
party and its assignee or delegate promptly provide such information as the
Company may reasonably request, and respond to such questions as the Company may
reasonably ask, relative to the assignment or delegation (including, without
limitation, the capabilities of the assignee or delegate).
15. Notices. Notices of any kind to be given to the Company hereunder by
the Administrators shall be in writing and shall be duly given if mailed or
delivered to the Company at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
with a copy to BlackRock Advisors, Inc., 0000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxx, Esq., Secretary,
or at such other address or to such other individual as shall be so specified by
the Company to the Administrators. Notices of any kind to be given to the
Administrators hereunder by the Company shall be in writing and shall be duly
given if mailed or delivered to: BlackRock Advisors, Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxxx, Esq. with a copy to Xxxxx X.
Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and PFPC Inc., 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxxx with a
copy to 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X.
Xxxxxxx, Esq., or at such other address or to such other individual as shall be
so specified by an Administrator to the Company.
16. Miscellaneous.
a. 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 upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
b. The names "BlackRock Funds" and "Trustees of BlackRock Funds" refer
specifically to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated December 22, 1988, which is hereby referred to and a copy of which
is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Company. The obligations of
"BlackRock Funds" entered into in the name or on behalf thereof by any of the
Trustees, officers, representatives or agents are not made individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders,
representatives or agents of the Company personally, but bind only the Trust
property (as defined in the Declaration of Trust), and all persons dealing with
any Fund or class of shares of the Company must look solely to the Trust
property belonging to such Fund or class for the enforcement of any claims
against the Company.
14
c. The Company represents and warrants that its allocation of services and
expenses as described herein is in compliance with Rule 18f-3 under the 1940
Act, the Company's plan that has been adopted pursuant to Rule 18f-3, and other
applicable rules and requirements. The Company will separately indemnify and
hold harmless each Administrator (and its affiliates) from any claim that the
allocation of services and expenses is improper or inappropriate.
17. Counterparts. This Agreement may be executed in counterparts, all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
BLACKROCK FUNDS(SM)
By:___________________________
BLACKROCK ADVISORS, INC.
By:___________________________
PFPC INC.
By:___________________________
APPENDIX A
to the
Administration Agreement
Among BlackRock Funds(SM),
BlackRock Advisors, Inc. and PFPC Inc.
Class of
Name of Portfolio Shares
----------------- ------
Small Cap Value Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Small Cap Growth Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Large Cap Growth Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Large Cap Value Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Select Equity Portfolio Institutional
Service
Investor A
Investor B
Investor C
A-1
Class of
Name of Portfolio Shares
----------------- ------
Index Equity Portfolio Institutional
Service
Investor A
Investor B
Investor C
International Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
International Emerging
Markets Portfolio Institutional
Service
Investor A
Investor B
Investor C
Balanced Portfolio Institutional
Service
Investor A
Investor B
Investor C
Low Duration Bond
Portfolio Institutional
Service
Investor A
Investor B
Investor C
BlackRock
Intermediate Bond
Portfolio Institutional
Service
Investor A
Investor B
Investor C
BlackRock
A-2
Class of
Name of Portfolio Shares
----------------- ------
Intermediate Government
Bond Portfolio Institutional
Service
Investor A
Investor B
Investor C
Government Income
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Core Bond Portfolio Institutional
Service
Investor A
Investor B
Investor C
BlackRock
Managed Income Portfolio Institutional
Service
Investor A
Investor B
Investor C
International Bond
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Tax-Free Income
Portfolio Institutional
Service
Investor A
Investor B
Investor C
A-3
Class of
Name of Portfolio Shares
----------------- ------
Pennsylvania Tax-Free
Income Portfolio Institutional
Service
Investor A
Investor B
Investor C
New Jersey Tax-Free
Income Portfolio Institutional
Service
Investor A
Investor B
Investor C
Ohio Tax-Free Income
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Money Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
Municipal Money Market
Portfolio Institutional
Service
Investor A
Investor B
Investor C
U.S. Treasury Money
Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
A-4
Class of
Name of Portfolio Shares
----------------- ------
Ohio Municipal Money
Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
Pennsylvania Municipal
Money Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
North Carolina Municipal
Money Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
New Jersey Municipal Money
Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
Virginia Municipal Money
Market Portfolio Institutional
Service
Investor A
Investor B
Investor C
A-5
Class of
Name of Portfolio Shares
----------------- ------
Multi-Sector Mortgage
Securities Portfolio III Institutional
Mid-Cap Growth Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
Mid-Cap Value Equity
Portfolio Institutional
Service
Investor A
Investor B
Investor C
BlackRock Strategic
Portfolio I Institutional
BlackRock Strategic
Portfolio II Institutional
International Small Cap
Equity Portfolio Institutional
Service
Investor A
Investor B
Investor C
Micro-Cap
Equity Portfolio Institutional
Service
Investor A
Investor B
Investor C
GNMA Portfolio Institutional
Service
Investor A
Investor B
Investor C
A-6
Class of
Name of Portfolio Shares
----------------- ------
Delaware Tax-Free
Income Portfolio Institutional
Service
Investor A
Investor B
Investor C
Kentucky Tax-Free
Income Portfolio Institutional
Service
Investor A
Investor B
Investor C
High Yield
Bond Portfolio Institutional
Service
Investor A
Investor B
Investor C
BlackRock
Multi-Sector Mortgage
Securities Portfolio IV Institutional
A-7
APPENDIX B
Administration Fees Payable
With Respect to BlackRock Funds(SM)
I. Portfolios Fund-Based Administration Fees
All Portfolios. Administrators are entitled to receive a combined
fee, computed daily and payable monthly, at an
annual rate of .085% of the first $500 million of
each Portfolio's average daily net assets; .075% of
the next $500 million of each Portfolio's average
daily net assets; and .065% of each Portfolio's
average daily net assets in excess of $1 billion.
II. Portfolios Class-Specific Administration Fee
Managed Income, Core Bond*, Intermediate Government Administrators are entitled to receive a combined
Bond, Tax-Free Income, New Jersey Tax-Free Income, fee, computed daily and payable monthly, at the
Ohio Tax-Free Income, Pennsylvania Tax-Free Income, following maximum annual rates based on the average
Low Duration Bond*, Intermediate Bond*, daily net assets allocated to each respective class
International Bond, Government Income, Multi-Sector of shares: .145% of the first $500 million of
Mortgage Securities Portfolio III, Multi-Sector average daily net assets allocated to each
Mortgage Securities Portfolio IV, BlackRock respective class of shares, .135% of the next $500
Strategic Portfolio I, BlackRock Strategic Portfolio million of such average daily net assets, and .125%
II, GNMA, Delaware Tax-Free Income, Kentucky of all average daily net assets allocated to a class
Tax-Free Income and High Yield Bond* Portfolios. of shares in excess of $1 billion.
* With respect to BlackRock Shares of each of the Core Bond, Low Duration Bond,
Intermediate Bond and High Yield Bond Portfolios, the Administrators are
entitled to receive a combined fee, computed daily and payable monthly, at the
following maximum annual rates based on the average daily net assets allocated
to BlackRock Shares of each of those Portfolios: .035% of the first $500 million
of average daily net assets allocated to BlackRock Shares, .025% of the next
$500 million of such average daily net assets, and .015% of all average daily
net assets allocated to BlackRock Shares in excess of $1 billion.
B-2
Money Market, Municipal Money Market, U.S. Treasury Administrators are entitled to receive a combined
Money Market, Ohio Municipal Money Market, New fee, computed daily and payable monthly, at the
Jersey Municipal Money Market, Pennsylvania following maximum annual rates based on the average
Municipal Money Market, North Carolina Municipal daily net assets allocated to each respective class
Money Market and Virginia Municipal Money Market of shares: .095% of the first $500 million of
Portfolios. average daily net assets allocated to a
class of shares, .085% of the next $500 million of
such average daily net assets, and .075% of all
average daily net assets allocated to a class of
shares in excess of $1 billion.
Large Cap Value Equity, Large Cap Growth Equity, Administrators are entitled to receive a combined
Small Cap Value Equity, International Equity, Index fee, computed daily and payable monthly, at the
Equity, Balanced, Small Cap Growth Equity, Select following maximum annual rates based on the average
Equity, Mid-Cap Value Equity, Mid-Cap Growth Equity, daily assets allocated to each class of shares:
International Emerging Markets, International Small .145% of the first $500 million of average daily net
Cap Equity and Micro-Cap Equity Portfolios. assets allocated to a class of shares, .135% of the
next $500 million of such average daily net assets
and .125% of all average daily net assets allocated
to a class of shares in excess of $1 billion.
B-3
