EXHIBIT 3.2 - TRANSFER AGENCY SERVICES AGREEMENT

 

 

 

 

                                                  Confidential and Proprietary

                                       Not for Reproduction or Re-Distribution

 

                      TRANSFER AGENCY SERVICES AGREEMENT

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         THIS AGREEMENT is made as of , 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:

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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 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.

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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

                  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.

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         (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.

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         (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 a