Exhibit (k)(1)
FORM OF ADMINISTRATION AGREEMENT
AGREEMENT (this "Agreement") made as of June , 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
(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"). Subject
to the last sentence of Paragraph 4, 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
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
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
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.
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4. Compensation; Allocation of Costs and Expenses
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 Amended and Restated Investment Advisory and Management
Agreement, dated as of June __, 2004 by and between the Corporation and
Porticoes Investment Management, LLC (such agreement, the "Management
Agreement"). 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 (such Adviser
expenses, to the extent not otherwise reimbursed by a third party, not to exceed
$250,000 in any year, or a pro-rated portion thereof for the period from the
date hereof through December 31, 2004 and, in the event that the Management
Agreement shall terminate as of a date that is not a calendar year end, for the
period from January 1 of such year through such termination date, without the
consent of the Audit Committee of the Corporation's Board of Directors) and fees
and expenses payable to third parties, including agents, consultants or other
advisors, in each case relating to, or associated with, monitoring financial and
legal affairs for the Corporation, monitoring the Corporation's investments,
performing due diligence on the Corporation's prospective portfolio companies
and evaluating and making investments; 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;
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. Notwithstanding
anything in the foregoing to the contrary, in no event shall (i) the Corporation
remit to the Administrator any fees it receives on behalf of the Administrator's
provision of significant managerial assistance to those portfolio companies to
which the Corporation is required to provide such assistance or (ii) the
Administrator receive any fees for providing such assistance.
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5. Limitation of Liability of the Administrator; Indemnification
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 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
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
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.
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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
This Agreement may be amended pursuant to a written instrument by
mutual consent of the parties.
9. Governing Law
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
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
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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