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Exhibit 99(k)(3)
FORM OF
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"),
dated as of January 29, 1999, between Xxxxx Xxxxx Management ("Xxxxx
Xxxxx") and PaineWebber Incorporated ("PaineWebber").
WHEREAS, Xxxxx Xxxxx Massachusetts Municipal Income
Trust (the "Trust") is a closed-end, non-diversified management
investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), and its shares of beneficial interest are
registered under the Securities Act of 1933, as amended; and
WHEREAS, Xxxxx Xxxxx is the investment adviser and
the administrator of the Trust; and
WHEREAS, Xxxxx Xxxxx desires to retain PaineWebber to
provide shareholder servicing and market information with respect to
the Trust, and PaineWebber is willing to render such services;
NOW, THEREFORE, in consideration of the mutual terms
and conditions set forth below, the parties hereto agree as follows:
1) Xxxxx Xxxxx hereby employs PaineWebber, for the
period and on the terms and conditions set forth herein, to provide the
following services:
a) Undertake to make available public information
pertaining to the Trust on an ongoing basis and to communicate to
investors and prospective investors the Trust's features and benefits
(including periodic seminars or conference calls, responses to
questions from current or prospective shareholders and specific
shareholder contact where appropriate);
b) Make available to investors and prospective
investors market price, net asset value, yield and other information
regarding the Trust, if reasonably obtainable, for the purpose of
maintaining the visibility of the Trust in the investor community;
c) At the request of Xxxxx Xxxxx or the Trust,
provide certain economic research and statistical information and
reports, if reasonably obtainable, on behalf of Xxxxx Xxxxx or the
Trust and consult with representatives of Xxxxx Xxxxx and/or Trustees
of the Trust in connection therewith, which information
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and reports shall include: (i) statistical and financial market
information with respect to the Trust's market performance; and (ii)
comparative information regarding the Trust and other closed-end
management investment companies with respect to (x) the net asset value
of their respective shares, (y) the respective market performance of
the Trust and such other companies, and (z) other relevant performance
indicators; and
d) At the request of Xxxxx Xxxxx or the Trust,
provide information to and consult with Xxxxx Xxxxx and/or the Board of
Trustees of the Trust with respect to applicable strategies designed to
address market value discounts, which may include share repurchases,
tender offers, modifications to dividend policies or capital structure,
repositioning or restructuring of the Trust, conversion of the Trust to
an open-end investment company, liquidation or merger; including
providing information concerning the use and impact of the above
strategic alternatives by other market participants.
e) At the request of Xxxxx Xxxxx or the Trust,
PaineWebber shall limit or cease any action or service provided
hereunder to the extent and for the time period requested by Xxxxx
Xxxxx or the Trust; provided, however, that pending termination of this
Agreement as provided for is Section 5 hereof, any such limitation or
cessation shall not relieve Xxxxx Xxxxx of its payment obligations
pursuant to Section 2 hereof.
f) PaineWebber will promptly notify Xxxxx Xxxxx or
the Trust, as the case may be, if it learns of any material inaccuracy
or misstatement in, or material omission from, any written information
provided by PaineWebber to Xxxxx Xxxxx or the Trust in connection with
the performance of services by PaineWebber under this Agreement.
2) Xxxxx Xxxxx will pay PaineWebber a fee computed
weekly and payable quarterly at an annualized rate of 0.10% of the average
weekly gross assets of the Trust.
3) Xxxxx Xxxxx acknowledges that the shareholder
services of PaineWebber provided for hereunder do not include any advice as to
the value of securities or regarding the advisability of purchasing or selling
any securities for the Trust's portfolio. No provision of this Agreement shall
be considered as creating, nor shall any provision create, any obligation on the
part of PaineWebber, and PaineWebber is not hereby agreeing, to: (i) furnish any
advice or make any recommendations regarding the purchase or sale of portfolio
securities or (ii) render any opinions, valuations or recommendations of any
kind or to perform any such similar services in connection with providing the
services described in Section 1 hereof.
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4) Nothing herein shall be construed as prohibiting
PaineWebber or its affiliates from providing similar or other services to any
other clients (including other registered investment companies or other
investment managers), so long as PaineWebber's services to Xxxxx Xxxxx and the
Trust are not impaired thereby.
5) The term of this Agreement shall commence upon the
date referred to above, shall be in effect for a period of two years and shall
thereafter continue for successive one year periods provided that the agreement
may be terminated by either party upon 60 days' written notice of the intention
to terminate.
6) Xxxxx Xxxxx will furnish PaineWebber with such
information as PaineWebber believes appropriate to its assignment hereunder (all
such information so furnished being the "Information"). Xxxxx Xxxxx recognizes
and confirms that PaineWebber (a) will use and rely primarily on the Information
and on information available from generally recognized public sources in
performing the services contemplated by this Agreement without having
independently verified the same and (b) does not assume responsibility for the
accuracy or completeness of the Information and such other information. To the
best of Xxxxx Xxxxx'x knowledge, the Information to be furnished by Xxxxx Xxxxx
when delivered, will be true and correct in all material respects and will not
contain any material misstatement of fact or omit to state any material fact
necessary to make the statements contained therein not misleading. Xxxxx Xxxxx
will promptly notify PaineWebber if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information delivered to
PaineWebber.
7) It is understood that PaineWebber is being engaged
hereunder solely to provide the services described above to Xxxxx Xxxxx and to
the Trust and that PaineWebber is not acting as an agent or fiduciary of, and
shall have no duties or liability to the current or future shareholders of the
Trust, the current or future shareholders of the Trust or any other third party
in connection with its engagement hereunder, all of which are hereby expressly
waived.
8) Xxxxx Xxxxx agrees that PaineWebber shall have no
liability to Xxxxx Xxxxx or the Trust for any act or omission to act by
PaineWebber in the course of its performance under this Agreement, in the
absence of gross negligence or willful misconduct on the part of PaineWebber.
Xxxxx Xxxxx agrees to the indemnification and other agreements set forth in the
Indemnification Agreement attached hereto, the provisions of which are
incorporated herein by reference and shall survive the termination, expiration
or supersession of this Agreement.
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9) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY
THEREIN AND WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.
10) EACH OF THE XXXXX XXXXX AND PAINEWEBBER AGREE
THAT ANY ACTION OR PROCEEDING BASED HEREON, OR ARISING OUT OF PAINEWEBBER'S
ENGAGEMENT HEREUNDER, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN XXX XXXXXX
XX XXX XXXXX XX XXX XXXX LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. XXXXX XXXXX
AND PAINEWEBBER EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH ACTION OR PROCEEDING AS SET FORTH ABOVE AND IRREVOCABLY
AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
ACTION OR PROCEEDING. EACH OF XXXXX XXXXX AND PAINEWEBBER HEREBY IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11) Xxxxx Xxxxx and PaineWebber each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby. This Agreement may not be assigned by either party without
the prior written consent of the other party.
12) This Agreement (including the attached
Indemnification Agreement) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. If any provision of this
Agreement is determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. This
Agreement may not be amended or otherwise modified or waived except by an
instrument in writing signed by both PaineWebber and Xxxxx Xxxxx.
13) All notices required or permitted to be sent
under this Agreement shall be sent, if to Xxxxx Xxxxx:
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Xxxxx Xxxxx Corporation
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Legal Officer
or if to PaineWebber:
PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
or such other name or address as may be given in writing to the other
parties. Any notice shall be deemed to be given or received on the
third day after deposit in the U.S. mail with certified postage prepaid
or when actually received, whether by hand, express delivery service or
facsimile transmission, whichever is earlier.
14) This Agreement may be exercised on separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15) A copy of the Agreement and Declaration of Trust
of Xxxxx Xxxxx is on file with the Secretary of The Commonwealth of
Massachusetts, and notice hereby is given that this Agreement is executed on
behalf of the Trustees of Xxxxx Xxxxx as Trustees and not individually and that
the obligations or arising out of this Agreement are not binding upon any of the
Trustees or beneficiaries individually but are binding only upon the assets and
properties of Xxxxx Xxxxx.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Shareholder Servicing Agreement as of the date first above written.
XXXXX XXXXX MANAGEMENT
By: _____________________________
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Name:
Title:
PAINEWEBBER INCORPORATED
By: _____________________________
Name:
Title:
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PAINEWEBBER INDEMNIFICATION AGREEMENT
Date January 29, 1999
Xxxxx Xxxxxx Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
In connection with the engagement of Xxxxx Xxxxxx Incorporated ("Xxxxx
Xxxxxx") to advise and assist the undersigned (referred to herein as
"we," or "us") with the matters set forth in the Agreement dated
January 29, 1999 between us and Xxxxx Xxxxxx, we hereby agree to
indemnify and hold harmless Xxxxx Xxxxxx, its affiliated companies,
and each of Xxxxx Xxxxxx'x and such affiliated companies' respective
officers, directors, agents, employees and controlling persons (within
the meaning of each of Section 20 of the Securities Exchange Act of
1934 and Section 15 of the Securities Act of 1933) (each of the
foregoing, including Xxxxx Xxxxxx, being hereinafter referred to as an
"Indemnified Person") to the fullest extent permitted by law from and
against any and all losses, claims, damages, expenses (including
reasonable fees, disbursements and other charges of counsel), actions
(including actions brought by us or our equity holders or derivative
actions brought by any person claiming through us or in our name),
proceedings, arbitrations or investigations (whether formal or
informal), or threats thereof (all of the foregoing being hereinafter
referred to as "Liabilities"), based upon, relating to or arising out
of such engagement or any Indemnified Person's role therein; provided,
however, that we shall not be liable under this paragraph: (a) for any
amount paid in settlement of claims without our consent, unless our
consent is unreasonably withheld, or (b) to the extent that it is
finally judicially determined, or expressly stated in an arbitration
award, that such Liabilities resulted primarily from the willful
misconduct or gross negligence of the Indemnified Person seeking
indemnification. If multiple claims are brought against any
Indemnified Person in an arbitration or other proceeding and at least
one such claim is based upon, relates to or arises out of the
engagement of Xxxxx Xxxxxx by us or any Indemnified Person's role
therein, we agree that any award, judgment and other Liabilities
resulting therefrom shall be deemed conclusively to be based on,
relate to or arise out of the engagement of Xxxxx Xxxxxx by us or any
Indemnified Person's role
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therein, except to the extent that such award or judgment expressly
states that the award or judgment, or any portion thereof, is based
solely upon, relates to or arises out of other matters for which
indemnification is not available hereunder. In connection with our
obligation to indemnify for expenses as set forth above, we further
agree to reimburse each Indemnified Person for all such expenses
(including reasonable fees, disbursements and other charges of counsel)
as they are incurred by such Indemnified Person; provided, however,
that if an Indemnified Person is reimbursed hereunder for any expenses,
the amount so paid shall be refunded if and to the extent it is finally
judicially determined, or expressly stated in an arbitration award,
that the Liabilities in question resulted primarily from the willful
misconduct or gross negligence of such Indemnified Person. We hereby
also agree that neither Xxxxx Xxxxxx nor any other Indemnified Person
shall have any liability to us (or anyone claiming through us or in our
name) in connection with Xxxxx Xxxxxx'x engagement by us except to the
extent that such Indemnified Person has engaged in willful misconduct
or been grossly negligent.
Promptly after Xxxxx Xxxxxx receives notice of the commencement of any
action or other proceeding in respect of which indemnification or
reimbursement may be sought hereunder, Xxxxx Xxxxxx will notify us
thereof; but the omission so to notify us shall not relieve us from
any obligation hereunder unless, and only to the extent that, such
omission results in our forfeiture of substantive rights or defenses.
If any such action or other proceeding shall be brought against any
Indemnified Person, we shall, upon written notice given reasonably
promptly following your notice to us of such action or proceeding, be
entitled to assume the defense thereof at our expense with counsel
chosen by us and reasonably satisfactory to such Indemnified Person;
provided, however, that any Indemnified Person may at its own expense
retain separate counsel to participate in such defense.
Notwithstanding the foregoing, such Indemnified Person shall have the
right to employ separate counsel at our expense and to control its own
defense of such action or proceeding if, in the reasonable opinion of
counsel to such Indemnified Person, (i) there are or may be legal
defenses available to such Indemnified Person or to other Indemnified
Persons that are different from or additional to those available to
us, or (ii) a difference of position or potential difference of
position exists between us and such Indemnified Person that would make
such separate representation advisable; provided, however, that in no
event shall we be required to pay fees and expenses under this
indemnity for more than one firm of attorneys (in addition to local
counsel) in any jurisdiction in any one legal action or group of
related legal actions. We agree that we will not, without the prior
written consent of PaineWebber, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by PaineWebber's
engagement (whether or not any Indemnified Person is a party thereto)
unless such settlement, compromise or
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consent includes an unconditional release of PaineWebber and each other
Indemnified Person from all liability arising or that may arise out of
such claim, action or proceeding.
If the indemnification of an Indemnified Person provided for hereunder
is finally judicially determined by a court of competent jurisdiction
to be unenforceable, then we agree, in lieu of indemnifying such
Indemnified Person, to contribute to the amount paid or payable by such
Indemnified Person as a result of such Liabilities in such proportion
as is appropriate to reflect the relative benefits received, or sought
to be received, by us on the one hand and by PaineWebber on the other
from transactions in connection with which PaineWebber has been
engaged. If the allocation provided in the preceding sentence is not
permitted by applicable law, then we agree to contribute to the amount
paid or payable by such Indemnified Person as a result of such
Liabilities in such proportion as is appropriate to reflect not only
the relative benefits referred to in such preceding sentence but also
the relative fault of us and of such Indemnified Person.
Notwithstanding the foregoing, in no event shall the aggregate amount
required to be contributed by all Indemnified Persons taking into
account our contributions as described above exceed the amount of fees
actually received by PaineWebber pursuant to such engagement. The
relative benefits received or sought to be received by us on the one
hand and by PaineWebber on the other shall be deemed to be in the same
proportion as (a) the total value of the transactions with respect to
which PaineWebber has been engaged bears to (b) the fees paid or
payable to PaineWebber with respect to such engagement.
