EXHIBIT 10.6
SUB-ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
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THIS AGREEMENT is made as of July 18, 2005 by and among BLACKROCK
XXXXX CAPITAL CORPORATION, a Delaware corporation (the "Fund"), PFPC INC., a
Massachusetts corporation ("PFPC") which is a subsidiary of The PNC Financial
Services Group, Inc., and BLACKROCK FINANCIAL MANAGEMENT, INC., a Delaware
corporation (the "Administrator") which is also a subsidiary of The PNC
Financial Services Group, Inc.
W I T N E S S E T H :
WHEREAS, the Administrator serves as administrator of the Fund; and
WHEREAS, the Fund and the Administrator wish to retain PFPC to
provide sub-administration and accounting services provided for herein with
respect to the Fund, and PFPC wishes to furnish such services with respect to
the Fund.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Definitions. As Used in this Agreement:
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(a) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund to give Oral
Instructions or Written Instructions under this Agreement.
An Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed
by the Fund and PFPC.
(b) "Oral Instructions" means oral instructions received by PFPC
from an Authorized Person or from a person reasonably
believed by PFPC to be an Authorized Person. PFPC may, in
its sole discretion in each separate instance, consider and
rely upon instructions it receives from an Authorized Person
via electronic mail as Oral Instructions.
(c) "Written Instructions" means (i) written instructions signed
by an Authorized Person (or a person reasonably believed by
PFPC to be an Authorized Person) and received by PFPC or
(ii) trade instructions transmitted (and received by PFPC)
by means of an electronic transaction reporting system
access to which requires use of a password or other
authorized identifier.
2. Appointment. The Fund and the Administrator hereby appoint PFPC to
provide sub-administration and accounting services with respect to
the Fund in accordance with the terms set forth in this Agreement.
PFPC accepts such appointment and agrees to furnish such services.
3. Compliance with Rules and Regulations. PFPC will comply with the
requirements of any laws, rules and regulations of governmental
authorities that are applicable to the duties to be performed by PFPC
under this Agreement. Except as specifically set forth in this
Agreement, PFPC assumes no responsibility for compliance by the
Administrator, the Fund or any other entity with any laws, rules and
regulations.
4. Instructions.
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(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives from an Authorized Person
(or from a person reasonably believed by PFPC to be an
Authorized Person) pursuant to this Agreement. PFPC may
assume that any Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with the
Administrator's obligations to the Fund or with the
provisions of organizational documents of the Fund or with
any vote, resolution or proceeding of the Fund's board of
directors or shareholders, unless and until PFPC receives
Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions so that PFPC receives the
Written Instructions by the close of business on the same
day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by
PFPC or differ from the Oral Instructions shall in no way
invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions or PFPC's
ability to rely upon such Oral Instructions.
5. Right to Receive Advice.
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(a) Oral Instructions or Written Instructions. If PFPC is in
doubt as to any action it should or should not take, PFPC
may request directions or advice, by way of Oral
Instructions or Written Instructions.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC may request advice from counsel of its own
choosing (who may be counsel for the Administrator, the
Fund, the Fund's sponsor or adviser or PFPC, at the option
of PFPC).
(c) Conflicting Advice. In the event of a conflict between Oral
Instructions or Written Instructions and the advice PFPC
receives from counsel, PFPC may rely upon and follow the
advice of counsel.
(d) Protection of PFPC. PFPC shall be indemnified by the Fund
and without liability for any action PFPC takes or does not
take in reliance upon Oral Instructions or Written
Instructions PFPC receives regarding or relating to the Fund
or advice from counsel and which PFPC believes, in good
faith, to be consistent with those Oral Instructions or
Written Instructions or that advice. Nothing in this section
shall be construed so as to impose an obligation upon PFPC
(i) to seek such advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such advice
or Oral Instructions or Written Instructions. Nothing in
this subsection shall excuse PFPC from liability for its
acts or omissions in carrying out such Oral Instructions or
Written Instructions to the extent such acts or omissions
constitute willful misfeasance, bad faith, negligence or
reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
6. Records; Visits. The books and records pertaining to the Fund, which
are in the possession or under the control of PFPC, shall be the
property of the Fund. PFPC may house such books and records in a
third party storage facility. The Fund, the Administrator and
Authorized Persons, and such other persons the Fund by means of
Written Instructions reasonably authorizes (including but not limited
to the Fund's independent accountants), shall have access to such
books and records at all times during PFPC's normal business hours;
provided that the Fund shall not authorize access by any individuals
employed by PFPC's direct competitors. Upon the reasonable request of
the Fund or the Administrator, copies of any such books and records
shall be provided by PFPC to the Fund, the Administrator, an
Authorized Person, or such other person, at the Fund's expense.
PFPC shall keep the following records:
(a) all books and records with respect to the Fund's books of
account; and
(b) records of the Fund's securities transactions.
7. Confidentiality. Each of the Fund and the Administrator shall keep
confidential any information it receives hereunder relating to PFPC's
business and PFPC shall keep confidential any information it receives
hereunder relating to the Fund's business. Confidential information
shall include (a) any data or information that is competitively
sensitive material, and not generally known to the public, including,
but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles and information, customer lists, sales estimates, business
plans, and internal performance results relating to the past, present
or future business activities of the Fund or PFPC; (b) any scientific
or technical information, design, process, procedure, formula, or
improvement that is commercially valuable and secret in the sense
that its confidentiality affords the Fund or PFPC a competitive
advantage over its competitors; (c) all confidential or proprietary
concepts, documentation, reports, data, specifications, computer
software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be confidential
information and shall not be subject to the foregoing confidentiality
obligations if it: (a) is already known to the receiving party at the
time it is obtained; (b) is or becomes publicly known or available
through no wrongful act of the receiving party; (c) is rightfully
received from a third party who, to the best of the receiving party's
knowledge, is not under a duty of confidentiality; (d) is released by
the protected party to a third party without restriction; (e) is
requested or required to be disclosed by the receiving party pursuant
to a court order, subpoena, governmental or regulatory agency request
or law (provided the receiving party will provide the other party (in
the case of disclosure by the Fund or the Administrator the "other
party" will be PFPC, and in the case of disclosure by PFPC the "other
party" will be the Fund) written notice of the same, to the extent
such notice is permitted); (f) is relevant to the defense of any
claim or cause of action asserted against the receiving party; (g) is
necessary or desirable for PFPC to release such information in
connection with the provision of services under this Agreement; or
(h) has been or is independently developed or obtained by the
receiving party.
PFPC agrees that, subject to the reuse and re-disclosure
provisions of Xxxxxxxxxx X-X, 00 XXX Part 248.11, it shall not
disclose the non-public personal information of investors in the Fund
obtained under this Agreement, except as necessary to carry out the
services set forth in this Agreement or as otherwise permitted by law
or regulation.
8. Liaison with Accountants. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules with respect
to the Fund. PFPC shall take all reasonable action in the performance
of its duties under this Agreement to assure that the necessary or
appropriate information is made available to such accountants for the
expression of their opinion, as reasonably requested by the Fund.
9. PFPC System. PFPC shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts,
expertise, patents, copyrights, trade secrets, and other related
legal rights utilized by PFPC in connection with the services
provided by PFPC with respect to the Fund.
10. Disaster Recovery. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of
equipment failures, PFPC shall, at no additional expense to the Fund
or the Administrator, take reasonable steps to minimize service
interruptions. PFPC shall have no liability with respect to the loss
of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PFPC's own
willful misfeasance, bad faith, negligence or reckless disregard of
its duties or obligations under this Agreement.
11. Compensation.
(a) As compensation for services set forth herein that are
rendered by PFPC during the term of this Agreement, the
Fund will pay to PFPC a fee or fees as may be agreed to in
writing by the Fund and PFPC.
(b) The Fund and the Administrator hereby represent and warrant
to PFPC that (i) the terms of this Agreement, (ii) the fees
and expenses associated with this Agreement, and (iii) any
benefits accruing to PFPC or to the Administrator (or any
affiliate thereof) or to the adviser or sponsor to the Fund
in connection with this Agreement, including but not
limited to any fee waivers, conversion cost reimbursements,
up front payments, signing payments or periodic payments
made or to be made by PFPC to the Administrator (or any
affiliate thereof) or to such adviser or sponsor or to any
affiliate of the Fund relating to this Agreement have been
fully disclosed to the board of directors of the Fund and
that, if required by applicable law, such board of
directors has approved or will approve the terms of this
Agreement, any such fees and expenses, and any such
benefits.
12. Indemnification. The Fund agrees to indemnify, defend and hold
harmless PFPC and its affiliates (other than the Fund, BlackRock
Xxxxx Capital Advisors LLC and BlackRock, Inc. and its subsidiaries,
to the extent any of the foregoing may be deemed to be affiliates of
PFPC) including their respective officers, directors, agents and
employees (each, a "PFPC Indemnified Party") from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, reasonable attorneys' fees and disbursements and
liabilities arising under applicable securities laws and any state
and foreign securities and blue sky laws) (collectively, "Losses")
arising directly or indirectly from any action or omission to act
which PFPC takes or omits to take in connection with the provision of
services under this Agreement. No PFPC Indemnified Party shall be
indemnified against any Losses caused by PFPC's or such PFPC
Indemnified Party's own willful misfeasance, bad faith, negligence or
reckless disregard in the performance of PFPC's duties under this
Agreement. The provisions of this Section 12 shall survive
termination of this Agreement.
13. Responsibility of PFPC.
(a) PFPC shall be under no duty hereunder to take any action on
behalf of the Fund or the Administrator except as
specifically set forth herein or as may be specifically
agreed to by PFPC, the Fund and the Administrator in a
written amendment hereto. PFPC shall be obligated to
exercise care and diligence in the performance of its
duties hereunder and to act in good faith in performing
services provided for under this Agreement. PFPC shall be
liable only for any Losses suffered by the Fund arising out
of PFPC's performance of or failure to perform its duties
under this Agreement and only to the extent such Losses
arise out of PFPC's willful misfeasance, bad faith,
negligence or reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC shall not be liable for losses, delays, failure,
errors, interruption or loss of data occurring directly or
indirectly by reason of circumstances beyond its reasonable
control, including without limitation acts of God; action
or inaction of civil or military authority; public enemy;
war; terrorism; riot; fire; flood; sabotage; epidemics;
labor disputes; civil commotion; interruption, loss or
malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of
nature; or non-performance by a third party (other than
employees, officers or affiliates of PFPC (other than the
Fund, BlackRock Xxxxx Capital Advisors LLC and BlackRock,
Inc. and its subsidiaries, to the extent any of the
foregoing may be deemed to be affiliates of PFPC)); and
(ii) PFPC shall not be under any duty or obligation to
inquire into and shall not be liable for the validity or
invalidity, authority or lack thereof, or truthfulness or
accuracy or lack thereof, of any instruction, direction,
notice, instrument or other information which PFPC
reasonably believes to be genuine. Notwithstanding the
foregoing, PFPC shall use commercially reasonable efforts
to mitigate the effect of the events enumerated in clause
(i) of the preceding sentence, although such efforts shall
not impute any liability to PFPC.
(c) Notwithstanding anything in this Agreement to the contrary,
the Fund and the Administrator hereby acknowledge and agree
that (i) PFPC, in the course of providing tax-related
services or calculating and reporting portfolio performance
hereunder, may rely upon PFPC's interpretation of tax
positions or its interpretation of relevant circumstances
(as determined by PFPC) in providing such tax services and
in determining methods of calculating portfolio performance
to be used, and that (ii) PFPC shall not be liable for
losses or damages of any kind associated with such reliance
except to the extent such loss or damage is substantially
due to PFPC's willful misfeasance, bad faith, negligence or
reckless disregard in the performance of its duties under
this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary,
without limiting anything in the immediately preceding
sub-section (c), the Fund and the Administrator hereby
acknowledge and agree that PFPC shall not be found to have
been negligent or to have acted with willful misfeasance,
bad faith or reckless disregard with respect to losses or
damages associated with areas of responsibility that the
judiciary, regulators (or other governmental officials) or
members of the investment fund industry determine would
otherwise apply to PFPC (or similar service providers) and
which, as of the date hereof, have yet to be identified by
such parties as areas for which PFPC (or any similar
service provider) is (or would be) responsible.
(e) Notwithstanding anything in this Agreement to the contrary
neither PFPC nor its affiliates (not including the Fund,
BlackRock Xxxxx Capital Advisors LLC and BlackRock, Inc.
and its subsidiaries, to the extent any of the foregoing
may be deemed to be affiliates of PFPC) shall be liable for
any consequential, special or indirect losses or damages,
whether or not the likelihood of such losses or damages was
known by PFPC or its affiliates.
(f) Each party shall have a duty to mitigate damages for which
any other party to this Agreement may become responsible.
(g) Notwithstanding anything in this Agreement to the contrary,
the services provided by PFPC do not constitute, nor shall
they be construed as constituting, legal advice or the
provision of legal services for or on behalf of the
Administrator, the Fund or any other person.
(h) The provisions of this Section 13 shall survive termination
of this Agreement.
14. Description of Accounting Services on a Continuous Basis.
PFPC will perform the following accounting services if required with
respect to the Fund:
(i) Journalize investment, capital share and income and
expense activities;
(ii) Record investment buy/sell trade tickets when
received from the Fund's investment adviser;
(iii) Maintain individual ledgers for investment
securities;
(iv) Maintain historical tax lots for each security;
(v) Record and reconcile corporate action activity and
all other capital changes;
(vi) Reconcile cash and investment balances of the Fund
with the Fund's custodian and provide the Fund's
investment adviser with the beginning cash balance
available for investment purposes;
(vii) Calculate contractual expenses, including
management fees and incentive allocation, as
applicable, in accordance with the Fund's
investment management agreement;
(viii) Monitor the expense accruals and notify an officer
of the Fund of any proposed adjustments;
(ix) Control all disbursements and authorize such
disbursements upon Written Instructions;
(x) Calculate capital gains and losses;
(xi) Determine net income;
(xii) Determine applicable foreign exchange gains and
losses on payables and receivables;
(xiii) Obtain market quotes and currency exchange rates
with respect to the Fund's investments from
independent pricing services approved by the Fund's
investment adviser, or if such quotes are
unavailable, then obtain such prices from the
Fund's investment adviser, and in either case
calculate the market value of the Fund's
investments on a monthly basis in accordance with
applicable valuation policies or guidelines
provided by the Fund to PFPC (provided PFPC does
not inform the Fund that it is unable to comply
with such policies or guidelines);
(xiv) Transmit or mail a copy of the portfolio valuation
on a monthly basis to the Fund's investment adviser
as agreed upon between the Fund and PFPC;
(xv) Arrange for the computation of the net asset value
of the Fund on a monthly basis in accordance with
the provisions of the Fund's offering memorandum;
and
(xvi) As appropriate, compute yields, total return,
expense ratios, portfolio turnover rate, and if
required, portfolio average dollar-weighted
maturity.
15. Description of Sub-Administration Services on a Continuous Basis.
PFPC will perform the following sub-administration services if
required with respect to the Fund:
(i) Supply various normal and customary Fund
statistical data to the Fund as requested on an
ongoing basis;
(ii) Prepare for execution and file the Fund's Federal
and state tax returns;
(iii) Coordinate the printing of the Fund's annual
shareholder reports;
(iv) Prepare monthly security transaction listings;
(v) Supply certain financial statements, schedules,
notes and related financial and supplementary data
in connection with the filing of the Fund's annual
and quarterly reports on Forms 10-K and 10-Q with
the Securities and Exchange Commission, as agreed
by PFPC from time to time; and (vi) Monitor the
Fund's status as a regulated investment company
under Sub-chapter M of the Internal Revenue Code of
1986, as amended.
16. Duration and Termination. This Agreement shall continue until
terminated by the Fund, the Administrator or PFPC on sixty (60) days'
prior written notice to the other parties. In the event the Fund or
the Administrator gives notice of termination, all expenses
associated with movement (or duplication) of records and materials
and conversion thereof to a successor service provider (or each
successive service provider), including expenses incurred after
termination, will be borne by the Fund and paid by the Fund to PFPC.
17. Notices. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President (or such
other address as PFPC may inform the other parties in writing); (b)
if to the Fund, at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000;
Attention: Xxxxx Xxxxxx (or such other address as the Fund may inform
the other parties in writing); (c) if to the Administrator, at 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000; Attention: Xxxxx Xxxx (or such
other address as the Administrator may inform the other parties in
writing); or (d) if to none of the foregoing, at such other address
as shall have been provided by like notice to the sender of any such
notice or other communication. If notice is sent by confirming
facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be
deemed to have been given three days after it has been mailed. If
notice is sent by messenger, it shall be deemed to have been given on
the day it is delivered.
18. Amendments. This Agreement, or any term hereof, may be changed or
waived only by written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
19. Assignment. PFPC may assign this Agreement to any majority owned
direct or indirect subsidiary of PFPC or of The PNC Financial
Services Group, Inc. (other than BlackRock, Inc. and its
subsidiaries), provided that PFPC gives the Fund and the
Administrator 30 days' prior written notice of such assignment.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
21. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
22. Miscellaneous.
(a) No Changes that Materially Affect Obligations.
Notwithstanding anything in this Agreement to the contrary,
PFPC shall have no responsibility under this Agreement with
respect to any modifications made by the Fund to its
offering memorandum, registration statement or policies
which would affect materially the obligations or
responsibilities of PFPC hereunder, without the prior
written approval of PFPC (which approval shall not be
unreasonably withheld or delayed).
(b) No Representations or Warranties. Except as expressly
provided in this Agreement, PFPC hereby disclaims all
representations and warranties, express or implied, made to
the Fund, the Administrator or any other person, including,
without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of
dealing, custom or usage of trade), of any services or any
goods provided incidental to services provided under this
Agreement. PFPC disclaims any warranty of title or
non-infringement except as otherwise set forth in this
Agreement.
(c) Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to
the subject matter hereof and supersedes all prior
agreements and understandings relating to the subject
matter hereof, provided that the parties (or, with respect
to compensation of PFPC, the Fund and PFPC) may embody in
one or more separate documents their agreement, if any,
with respect to delegated duties, subsequently agreed upon
services, and compensation of PFPC.
(d) Captions. 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.
(e) Information. The Fund will provide such information and
documentation as PFPC may reasonably request in connection
with services provided by PFPC with respect to the Fund.
(f) Governing Law. This Agreement shall be deemed to be a
contract made in Delaware and governed by Delaware law,
without regard to principles of conflicts of law.
(g) Partial Invalidity. 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.
(h) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(i) Facsimile Signatures. The facsimile signature of any party
to this Agreement shall constitute the valid and binding
execution hereof by such party.
(j) Customer Identification Program Notice. To help the U.S.
government fight the funding of terrorism and money
laundering activities, U.S. Federal law requires each
financial institution to obtain, verify, and record certain
information that identifies each person who initially opens
an account with that financial institution on or after
October 1, 2003. Certain of PFPC's affiliates are financial
institutions, and as a matter of policy PFPC will request
(or already has requested) the Fund's name, address and
taxpayer identification number or other government-issued
identification number, and, if such party is a natural
person, that party's date of birth. PFPC may also ask (and
may have already asked) for additional identifying
information, and PFPC may take steps (and may have already
taken steps) to verify the authenticity and accuracy of
these data elements.
(k) No Third Party Beneficiary. Notwithstanding anything in
this Agreement to the contrary, (i) no other entity is
intended to be, nor shall it be, a third party beneficiary
of this Agreement (except as set forth in Section 12 and
Section 13(e) of this Agreement) and (ii) PFPC shall have
no liability under or as a result of this Agreement to any
third party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PFPC INC.
By: /s/ Xxxx X. Xxxxxxx
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Title: SVP
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BLACKROCK XXXXX CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxx
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Title: CFO
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BLACKROCK FINANCIAL MANAGEMENT, INC.
By: /s/ Xxxxx Xxxx
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Title: Managing Director
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