EXHIBIT 9(a)
BLACKROCK FUNDS/SM/
ADMINISTRATION AGREEMENT
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AGREEMENT dated as of May __, 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 the Administrators to provide
certain administration services and to retain PFPC to provide certain accounting
services 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
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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 each
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of the Administrators to provide administration services as specified below, and
PFPC to provide accounting services as specified below, for each class of shares
in each of the Company's Funds on the terms and for the period set forth in this
Agreement. BlackRock and PFPC each accept such respective appointments and
agree to perform the services and duties set forth in Section 3 below in return
for the compensation provided in Section 5 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
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desires to retain the Administrators to act as co-administrators and PFPC to act
as fund accountant hereunder, the Company shall notify BlackRock and PFPC,
whereupon such
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Appendix A shall be supplemented (or amended) and such class or portfolio shall
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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
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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
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Administrators with copies, properly certified or authenticated, of each of the
following documents and will deliver to it 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"); and
f. The Company's Amended and Restated Distribution and Service Plan
relating to the respective classes of shares of the Company's investment
portfolios (the "Plan").
3. SERVICES AND DUTIES. The Administrators enter into the following
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covenants with respect to their administration and PFPC's accounting services
and duties:
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
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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 3.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:
(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, overseeing
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
for the accuracy of the data transmitted for processing or storage);
and
(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.
c. Without limiting the generality of Section 3.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 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
remitting such fees pursuant to the Plan;
(7) 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;
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(8) 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
(9) 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 3.a, the Administrators
shall provide the following services which are intended to benefit all of
the classes of shares of a Fund (the "Fund-General Administration
Services"):
(1) The Administrators shall participate to the extent requested
by the Company and its counsel in the periodic updating of the
Company's Registration Statement; compile data and accumulate
information for and coordinate with the Company's Treasurer or
Assistant Treasurer the preparation of reports to shareholders of
record and the Commission (e.g., Annual and Semi-Annual Reports on
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Form N-SAR), it being understood that the preparation and filing of
timely Notices pursuant to Rule 24f-2 under the 1940 Act shall be
performed by the Company's Treasurer or Assistant Treasurer with the
assistance and advice of the Company's counsel; and file with the
Commission and other federal and state agencies, subject to the
approval of the Company's Treasurer or Assistant Treasurer, reports
and documents including, without limitation, Annual and Semi-Annual
Reports on Form N-SAR and federal and state tax returns and required
tax filings other than those required to be filed by the Company's
custodian or transfer agent.
(2) The Administrators shall be responsible for maintaining the
registration or qualification of shares for sale under the securities
laws of any state and for preparing compliance filings pursuant to
state securities laws with the advice of the Company's counsel.
Payment of share registration fees and any fees for qualifying or
continuing the qualification of the Company or any Fund as a dealer or
broker shall be made by the Company or Fund involved.
(3) The Administrators shall monitor, and assist 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.
e. Without limiting the generality of Section 3.a, BlackRock shall
provide the following 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, sub-administrators (if any),
transfer agent, custodian,
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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; and
(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.
f. Without limiting the generality of Section 3.a, PFPC shall provide
the following accounting services which are intended to benefit all of the
classes of shares of a Fund: PFPC agrees to maintain all financial
accounts, records, journals, ledgers and schedules for each Fund (other
than those maintained by the Company's custodian and its transfer agent),
and to install and maintain a system of internal controls appropriate for
entities of the size and complexity of each Fund, and to provide reports,
financial statements and other statistical data as requested from time to
time by the Administrators or by the Company. In addition, PFPC shall
compute each Fund's net asset value, net income and net capital gain (loss)
in accordance with the Company's Prospectuses and resolutions of its Board
of Trustees. PFPC shall, together with the Company's Treasurer or
Assistant Treasurer, act as liaison with the Company's independent public
accountants and shall provide 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.
g. Without limiting any other provision of this Section 3, the
Administrators shall also provide the following services that are related
to the other services specified herein:
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(1) In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Administrators agree that all records which they
maintain for the Company are the property of the Company and further
agree to surrender promptly to the Company any of such records upon
the Company's request. PFPC 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 (other than the records
required to be maintained under Rule 31a-1(b)(4), which shall be
preserved by BlackRock) under said Act.
(2) In the event of equipment failures beyond PFPC's control,
PFPC shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions but shall have no liability
with respect thereto. 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 all of their services and duties hereunder, 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.
4. EXPENSES ASSUMED AS ADMINISTRATORS. The Administrators will bear
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all expenses incurred by them in performing their services and duties 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 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
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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.
5. COMPENSATION.
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a. For the Class-Specific Administration Services provided pursuant
to Sections 3.b and 3.c above and the related expenses assumed as co-
administrators, 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,
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and as modified by agreement of the Administrators and the Company from time to
time (the "Class-Specific Administration Fees"). The Class-Specific
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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 3.a, 3.d, 3.e, 3.f and 3.g above and the related
expenses assumed as co-administrators, 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
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agreement of the Administrators and the Company from time to time (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, applicable regulations and resolutions
of the Company's Board of Trustees.
d. The Administrators will from time to time employ or associate
with themselves such person or persons as they may believe to be fit to assist
them in the performance of this Agreement. Such person or persons may be
officers and employees who are employed by both the Company and either of the
Administrators. The compensation of such person or persons shall be paid by the
Administrators, and no obligation shall be incurred on behalf of the Company in
such respect.
6. SUB-CONTRACTING. BlackRock and PFPC are hereby authorized to
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retain third parties and are hereby authorized to delegate some or all of their
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.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION. The Administrators
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agree on behalf of themselves and their 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 their 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
Administrators 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.
8. LIMITATIONS OF LIABILITY. Each Administrator shall exercise its
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best judgment in rendering the services listed in Section 3 above. Neither of
the Administrators
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shall be liable for any error of judgment or mistake of law 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 either of the
Administrators, 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
the Administrators' duties as co-administrators 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 the Administrators
even though paid by one or both of them.
9. DURATION AND TERMINATION. Unless sooner terminated as provided
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herein, this Agreement shall continue in effect with respect to the Funds until
March 31, 1999. Thereafter, if not terminated, this Agreement shall continue
automatically 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
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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 60-days' written notice to the Administrators, or
by the Administrators at any time, without the payment of any penalty, on 90-
days' written notice to the Company. This Agreement will automatically and
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 meaning as such terms
have in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
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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.
11. NOTICES. Notices of any kind to be given to the Company
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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.; and PFPC Inc., 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxxx,
or at such other address or to such other individual as shall be so specified by
an Administrator to the Company.
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12. MISCELLANEOUS.
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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.
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.
13. COUNTERPARTS. This Agreement may be executed in counterparts,
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all of which together shall constitute one and the same instrument.
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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:___________________________
