Exhibit K
ADMINISTRATION AGREEMENT
AGREEMENT (this "Agreement") made as of April , 2004 by and between
Porticoes Capital Corporation, a Maryland corporation (hereinafter referred to
as the "Corporation"), and PIM Holdings, LLC, a Delaware limited liability
company (hereinafter referred to as the "Administrator").
W I T N E S S E T H:
WHEREAS, the Corporation is a newly organized closed-end management
investment company that has elected to be treated as a business development
company under the Investment Company Act of 1940 (hereinafter referred to as the
"Investment Company Act");
WHEREAS, the Corporation desires to retain the Administrator to provide
administrative services to the Corporation in the manner and on the terms
hereinafter set forth;
WHEREAS, the Corporation's investment adviser is the Administrator's
sole member; and
WHEREAS, the Administrator is willing to provide administrative services
to the Corporation on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Corporation and the
Administrator hereby agree as follows:
1. Duties of the Administrator
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(a) Engagement of Administrator. The Corporation hereby engages the
Administrator to act as administrator of the Corporation, and to furnish, or
arrange for others to furnish, the administrative services, personnel and
facilities described below, subject to review by and the overall control of the
Board of Directors of the Corporation, for the period and on the terms and
conditions set forth in this Agreement. The Administrator hereby accepts such
engagement and agrees during such period to render, or arrange for the rendering
of, such services and to assume the obligations herein set forth subject to the
reimbursement of costs and expenses provided for below. The Administrator and
such others shall for all purposes herein be deemed to be independent
contractors and shall, unless otherwise expressly provided or authorized herein,
have no authority to act for or represent the Corporation in any way or
otherwise be deemed agents of the Corporation.
(b) Services. The Administrator shall perform (or oversee, or arrange for,
the performance of) the administrative services necessary for the operation of
the Corporation. Without limiting the generality of the foregoing, the
Administrator shall provide the Corporation with office facilities, equipment,
clerical, bookkeeping and record keeping services at such facilities and such
other services as the Administrator, subject to review by the Board of Directors
of the Corporation, shall from time to time determine to be necessary or useful
to perform its obligations under this Agreement. The Administrator shall also,
on behalf of the
Corporation, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other stockholder servicing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Administrator shall make reports to the Directors of its
performance of obligations hereunder and furnish advice and recommendations with
respect to such other aspects of the business and affairs of the Corporation as
it shall determine to be desirable; provided that nothing herein shall be
construed to require the Administrator to, and the Administrator shall not,
provide any advice or recommendation relating to the securities and other assets
that the Corporation should purchase, retain or sell or any other investment
advisory services to the Corporation. The Administrator shall be responsible for
the financial and other records that the Corporation is required to maintain and
shall prepare reports to stockholders, and reports and other materials filed
with the Securities and Exchange Commission (the "SEC"). The Administrator will
provide on the Corporation's behalf significant managerial assistance to those
portfolio companies to which the Corporation is required to provide such
assistance. In addition, the Administrator will assist the Corporation in
determining and publishing the Corporation's net asset value, overseeing the
preparation and filing of the Corporation's tax returns, and the printing and
dissemination of reports to stockholders of the Corporation, and generally
overseeing the payment of the Corporation's expenses and the performance of
administrative and professional services rendered to the Corporation by others.
2. Records
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The Administrator agrees to maintain and keep all books, accounts and
other records of the Corporation that relate to activities performed by the
Administrator hereunder and, if required by the Investment Company Act, will
maintain and keep such books, accounts and records in accordance with that Act.
In compliance with the requirements of Rule 31a-3 under the Investment Company
Act, the Administrator agrees that all records which it maintains for the
Corporation shall at all times remain the property of the Corporation, shall be
readily accessible during normal business hours, and shall be promptly
surrendered upon the termination of the Agreement or otherwise on written
request. The Administrator further agrees that all records which it maintains
for the Corporation pursuant to Rule 31a-1 under the Investment Company Act will
be preserved for the periods prescribed by Rule 31a-2 under the Investment
Company Act unless any such records are earlier surrendered as provided above.
Records shall be surrendered in usable machine-readable form. The Administrator
shall have the right to retain copies of such records subject to observance of
its confidentiality obligations under this Agreement.
3. Confidentiality
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The parties hereto agree that each shall treat confidentially all
information provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto, including
nonpublic personal information pursuant to Regulation S-P of the SEC, shall be
used by any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying out this
Agreement, shall not be disclosed to any third party, without the prior consent
of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that is
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required to be disclosed by any regulatory authority, any authority or legal
counsel of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation.
4. Compensation; Allocation of Costs and Expenses
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In full consideration of the provision of the services of the
Administrator, the Corporation shall reimburse the Administrator for the costs
and expenses incurred by the Administrator in performing its obligations and
providing personnel and facilities hereunder. The Corporation will bear all
costs and expenses that are incurred in its operation and transactions and not
specifically assumed by the Corporation's investment adviser (the "Adviser"),
pursuant to that certain Investment Advisory Management Agreement, dated as of
April [X], 2004 by and between the Corporation and the Adviser. Costs and
expenses to be borne by the Corporation include, but are not limited to, those
relating to: organization and offering; calculating the Corporation's net asset
value (including the cost and expenses of any independent valuation firm);
expenses incurred by the Adviser payable to third parties, including agents,
consultants or other advisors, in monitoring financial and legal affairs for the
Corporation and in monitoring the Corporation's investments and performing due
diligence on its prospective portfolio companies; interest payable on debt, if
any, incurred to finance the Corporation's investments; offerings of the
Corporation's common stock and other securities; investment advisory and
management fees; administration fees, if any, payable under this Agreement; fees
payable to third parties, including agents, consultants or other advisors,
relating to, or associated with, evaluating and making investments; transfer
agent and custodial fees; federal and state registration fees; all costs of
registration and listing the Corporation's shares on any securities exchange;
federal, state and local taxes; independent directors' fees and expenses;
brokerage commissions; costs of preparing and filing reports or other documents
required by the SEC; costs of any reports, proxy statements or other notices to
stockholders, including printing costs; the Corporation's allocable portion of
the fidelity bond, directors and officers/errors and omissions liability
insurance, and any other insurance premiums; direct costs and expenses of
administration, including printing, mailing, long distance telephone, copying,
secretarial and other staff, independent audits and outside legal costs; and all
other expenses incurred by the Corporation or the Administrator in connection
with administering the Corporation's business, including payments under this
Administration Agreement based upon the Corporation's allocable portion of
overhead and other expenses incurred by the Administrator in performing its
obligations under this Administration Agreement, including rent and the
allocable portion of the cost of the Corporation's chief compliance officer and
chief financial officer and their respective staffs.
5. Limitation of Liability of the Administrator; Indemnification
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The Administrator (and its officers, managers, agents, employees,
controlling persons, members, and any other person or entity affiliated with the
Administrator, including without limitation its sole member, the Adviser) shall
not be liable to the Corporation for any action taken or omitted to be taken by
the Administrator in connection with the performance of any of its duties or
obligations under this Agreement or otherwise as administrator for the
Corporation, and the Corporation shall indemnify, defend and protect the
Administrator (and its officers, managers, agents, employees, controlling
persons, members, and any other person or entity affiliated with the
Administrator, including without limitation the Adviser, each of whom shall be
deemed a third party beneficiary hereof) (collectively, the "Indemnified
Parties") and hold
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them harmless from and against all damages, liabilities, costs and expenses
(including reasonable attorneys' fees and amounts reasonably paid in settlement)
incurred by the Indemnified Parties in or by reason of any pending, threatened
or completed action, suit, investigation or other proceeding (including an
action or suit by or in the right of the Corporation or its security holders)
arising out of or otherwise based upon the performance of any of the
Administrator's duties or obligations under this Agreement or otherwise as
administrator for the Corporation. Notwithstanding the preceding sentence of
this Paragraph 5 to the contrary, nothing contained herein shall protect or be
deemed to protect the Indemnified Parties against or entitle or be deemed to
entitle the Indemnified Parties to indemnification in respect of, any liability
to the Corporation or its security holders to which the Indemnified Parties
would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of the Administrator's duties or by reason of the
reckless disregard of the Administrator's duties and obligations under this
Agreement (to the extent applicable, as the same shall be determined in
accordance with the Investment Company Act and any interpretations or guidance
by the SEC or its staff thereunder).
6. Activities of the Administrator
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The services of the Administrator to the Corporation are not to be deemed
to be exclusive, and the Administrator and each affiliate is free to render
services to others. It is understood that directors, officers, employees and
stockholders of the Corporation are or may become interested in the
Administrator and its affiliates, as directors, officers, members, managers,
employees, partners, stockholders or otherwise, and that the Administrator and
directors, officers, members, managers, employees, partners and stockholders of
the Administrator and its affiliates are or may become similarly interested in
the Corporation as stockholders or otherwise.
7. Duration and Termination of this Agreement
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This Agreement shall become effective as of the date hereof, and shall
remain in force with respect to the Corporation for two years thereafter, and
thereafter continue from year to year, but only so long as such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Corporation and (ii) a majority of those Directors who are not parties to this
Agreement or "interested persons" (as defined in the Investment Company Act) of
any such party.
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of the Directors of the Corporation, or by the Administrator,
upon 60 days' written notice to the other party. This Agreement may not be
assigned by a party without the consent of the other party.
8. Amendments of this Agreement
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This Agreement may be amended pursuant to a written instrument by mutual
consent of the parties.
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9. Governing Law
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This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act, if any. To
the extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, if any, the latter shall control.
10. Entire Agreement
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This Agreement contains the entire agreement of the parties and supercedes
all prior agreements, understandings and arrangements with respect to the
subject matter hereof.
11. Notices
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Any notice under this Agreement shall be given in writing, addressed and
delivered or mailed, postage prepaid, to the other party at its principal
office.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
PORTICOES CAPITAL CORPORATION
By:
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Name:
Title:
PIM HOLDINGS, LLC
By:
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Name:
Title:
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