EXHIBIT 10.5
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of July 18, 2005 by and between PFPC INC., a
Massachusetts corporation ("PFPC"), and BLACKROCK KELSO CAPITAL CORPORATION, a
Delaware corporation (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund wishes to retain PFPC to provide transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent services
provided for herein, and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. As Used in this Agreement:
(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 on behalf of the Fund. An
Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by
both parties hereto.
(b) "Dividend Reinvestment Plan" means the Fund's Dividend
Reinvestment Plan, as the details of such Plan (and any
changes thereto) are provided by the Fund to PFPC from time to
time in writing.
(c) "Oral Instructions" mean 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.
(d) "Shares" mean the shares of beneficial interest of any series
or class of the Fund.
(e) "Written Instructions" mean (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.
(f) "1940 Act" means the Investment Company Act of 1940, as
amended.
2. Appointment. The Fund hereby appoints PFPC to provide transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent
services 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 Fund
with any laws, rules and regulations.
4. Instructions.
(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 provisions of
organizational documents of the Fund or of 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.
(a) Advice of the Fund. 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 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 from or on behalf of 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. Such books and records shall be prepared and
maintained as required by the 1940 Act. The Fund 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 individuals employed by PFPC's
direct competitors. Upon the reasonable request of the Fund, copies of
any such books and records shall be provided by PFPC to the Fund, an
Authorized Person, or such other person, at the Fund's expense.
7. Confidentiality. Each party shall keep confidential any information it
receives hereunder relating to the other party's business
("Confidential Information"). 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 such 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 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 (g) has been or is independently developed or obtained by
the receiving party.
8. Cooperation with Accountants. PFPC shall cooperate with the Fund's
independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to ensure that
the necessary 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 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,
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. In addition, the Fund agrees to pay, and
will be billed separately in arrears for, reasonable expenses
incurred by PFPC in the performance of its duties hereunder.
(b) PFPC shall establish certain cash management accounts
("Service Accounts") required to provide services under this
Agreement. The Fund acknowledges (i) PFPC may receive
investment earnings from sweeping the funds in such Service
Accounts into investment accounts including, but not limited,
investment accounts maintained at an affiliate or client of
PFPC; (ii) balance credits earned with respect to the amounts
in such Service Accounts ("Balance Credits") will be used to
offset the banking service fees imposed by the cash management
service provider (the "Banking Service Fees"); (iii) PFPC
shall retain any excess Balance Credits for its own use; and
(iv) Balance Credits will be calculated and applied toward the
Fund's Banking Service Fees regardless of the Service Account
balance sweep described in sub-section (i) of this Section 11
(b).
(c) The undersigned hereby represents and warrants 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 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 such adviser or sponsor or any affiliate of
the Fund relating to the 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 Kelso 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 Person"), 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 to the Fund hereunder. 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, provided
that in the absence of a finding to the contrary the acceptance, processing
and/or negotiation of a fraudulent payment for the purchase of Shares shall be
presumed not to have been the result of PFPC's or its affiliates own willful
misfeasance, bad faith, negligence or reckless disregard of such duties. 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 except as specifically set forth herein or
as may be specifically agreed to by PFPC and the Fund 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
Kelso 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 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,
neither PFPC nor its affiliates (not including the Fund,
BlackRock Kelso 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.
(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
(e) The provisions of this Section 13 shall survive termination of
this Agreement.
14. Description of Services.
(a) Services Provided on an Ongoing Basis, If Applicable.
(i) Maintain shareholder registrations;
(ii) Provide toll-free lines for shareholder and
broker-dealer use;
(iii) Provide periodic shareholder lists and statistics;
(iv) Mailing of year-end tax information; and
(v) Periodic mailing of shareholder Dividend Reinvestment
Plan account information and Fund financial reports.
(b) Dividends and Distributions. PFPC must receive a resolution of
the Fund's board of directors authorizing the declaration and
payment of dividends and distributions. Upon receipt of the
resolution, PFPC shall issue the dividends and distributions
in cash, or, if the resolution so provides, pay such dividends
and distributions in Shares. Such issuance or payment shall be
made after deduction and payment of the required amount of
funds to be withheld in accordance with any applicable tax
laws or other laws, rules or regulations. PFPC shall timely
send to the Fund's shareholders tax forms and other
information, or permissible substitute notice, relating to
dividends and distributions, paid by the Fund as are required
to be filed and mailed by applicable law, rule or regulation.
PFPC shall maintain and file with the U.S. Internal Revenue
Service and other appropriate taxing authorities reports
relating to all dividends above a stipulated amount (currently
$10.00 accumulated yearly dividends) paid by the Fund to its
shareholders as required by tax or other law, rule or
regulation.
In accordance with such procedures and controls as are
mutually agreed upon from time to time by and among the Fund,
PFPC and the Fund's custodian, PFPC shall process applications
from Fund shareholders relating to the Fund's Dividend
Reinvestment Plan and will effect purchases of Shares in
connection with the Dividend Reinvestment Plan. As the
dividend disbursing agent, PFPC shall, on or before the
payment date of any dividend or distribution by the Fund,
notify the Fund's accounting agent or sub-accounting agent of
the estimated amount required to pay any portion of said
dividend or distribution which is payable in cash, and on or
before the payment date of such dividend or distribution, the
Fund shall instruct the Fund's custodian to make available to
PFPC sufficient funds for the cash amount to be paid out. If a
shareholder is entitled to receive additional Shares, by
virtue of any dividend or distribution, appropriate credits
will be made to the shareholder's account and/or certificates
delivered where requested, all in accordance with the Dividend
Reinvestment Plan.
(c) Communications to Shareholders. Upon timely Written
Instructions, PFPC shall mail all communications by the Fund
to its shareholders, including:
(i) Reports to shareholders;
(ii) Monthly or quarterly (whichever is requested pursuant
to Written Instructions) Dividend Reinvestment Plan
statements;
(iii) Dividend and distribution notices;
(iv) Proxy material; and
(v) Tax form information.
PFPC will receive and tabulate the proxy cards for the
meetings of the Fund's shareholders.
(d) Records. PFPC shall maintain records of the accounts for each
shareholder showing the following information:
(i) Name, address and U.S. Tax Identification or Social
Security number;
(ii) Number and class of shares held and number and class
of Shares for which certificates, if any, have been
issued, including certificate numbers and
denominations;
(iii) Historical information regarding the account of each
shareholder, including dividends and distributions
paid and the date and price for all transactions on a
shareholder's account;
(iv) Any stop or restraining order placed against a
shareholder's account;
(v) Any correspondence relating to the current maintenance
of a shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Any information required in order for PFPC to perform
any calculations contemplated or required by this
Agreement.
(e) Shareholder Inspection of Stock Records. Upon request from a
Fund shareholder to inspect stock records, PFPC will notify
the Fund and require instructions granting or denying each
such request. Unless PFPC has acted contrary to the Fund's
instructions, the Fund agrees to release PFPC from any
liability for refusal of permission for a particular
shareholder to inspect the Fund's shareholder records.
15. Duration and Termination. This Agreement shall continue until
terminated by the Fund or by PFPC on sixty (60) days' prior written
notice to the other party. In the event the Fund 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.
16. Notices. Notices shall be addressed (a) if to PFPC, at 301 Bellevue
Parkway, Wilmington, Delaware 19809, Attention: President (or such
other address as PFPC may inform the Fund in writing); (b) if to the
Fund, at 40 East 52nd Street, New York, New York 10022, Attention:
Frank Gordon (or such other address as the Fund may inform PFPC in
writing) or (c) if to neither of the foregoing, at such other address
as shall have been given by like notice to the sender of any such
notice or other communication by the other party. 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.
17. Amendments. This Agreement, or any term thereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. 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 30 days' prior written notice of such assignment.
19. Subcontractors. PFPC may, in its sole discretion, engage subcontractors
to perform any of the obligations contained in this Agreement to be
performed by PFPC; provided, however, PFPC shall remain responsible for
the acts and omissions of any such sub-contractors to the same extent
that PFPC is responsible for its own acts and omissions under this
Agreement.
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) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties and compensation of PFPC.
(b) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees
not to make any modifications to its offering document or
registration statement or adopt any 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.
(c) 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.
(d) Information. The Fund will provide such information and
documentation as PFPC may reasonably request in connection
with services provided by PFPC to the Fund.
(e) 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.
(f) 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.
(g) 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.
(h) 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 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.
(i) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
(j) Regulation S-P. PFPC agrees that, subject to the reuse and
re-disclosure provisions of Regulation S-P, 17 CFR 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.
(k) 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.
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/ James W. Pasman
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Title: Sr. Vice President
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BLACKROCK KELSO CAPITAL
CORPORATION
By: /s/ Frank Gordon
--------------------------------
Title: CFO
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