AMENDMENT NO. 1 TO ADMINISTRATION SERVICES AGREEMENT
Exhibit 10.11
AMENDMENT NO. 1 TO ADMINISTRATION SERVICES AGREEMENT
This Amendment No. 1 dated June 6, 2008 is made to the Administration Services Agreement dated
as of February 27, 2007 (the “Agreement”) by and between HIGHLAND CAPITAL MANAGEMENT, L.P., a
Delaware limited partnership (“Highland”), and HIGHLAND DISTRESSED OPPORTUNITIES, INC., a Delaware
corporation (the “Company”).
WHEREAS, Highland provides administration services to the Company pursuant to the Agreement;
and
WHEREAS, Highland and the Company desire to amend the Agreement to set forth in more detail
the administration services that Highland has been providing and will continue to provide to the
Company; and
WHEREAS, Section 17 of the Agreement provides that the Agreement may be changed by a written
amendment;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:
Section 14 of the Agreement is hereby amended and restated in its entirety, effective as of
the date hereof, as follows:
14. Description of Administration Services on a Continuous Basis. Highland will
perform the following administration services:
| (i) | Prepare monthly security transaction listings; |
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| (ii) | Supply various normal and customary portfolio and Company statistical
data as requested on an ongoing basis; |
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| (iii) | Prepare for execution and file the Company’s Federal and state tax
returns: prepare a fiscal tax provision in coordination with the annual audit;
prepare an excise tax provision; and prepare all relevant 1099 calculations; |
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| (iv) | Coordinate contractual relationships and communications between the
Company and its contractual service providers; |
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| (v) | Coordinate printing of the Company’s annual shareholder reports; |
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| (vi) | Prepare income and capital gain distributions; |
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| (vii) | Prepare the semiannual and annual financial statements; |
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| (viii) | Monitor the Company’s compliance with IRC, SEC and prospectus requirements; |
| (ix) | Prepare, coordinate with the Company’s counsel and coordinate the
filing with the SEC: semi-annual reports on Form N-SAR and Form N-CSR; Form N-Q;
and Form N-PX based upon information provided by the Company; assist in the
preparation of Forms 3, 4 and 5 pursuant to Section 16 of the 1934 Act and Section
30(h) of the 1940 Act for the officers and directors of the Company, such filings
to be based on information provided by those persons; |
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| (x) | Assist in the preparation of notices of meetings of shareholders,
coordinate preparation of proxy statements, including obtaining information
required to be disclosed by applicable regulations and the engagement of proxy
solicitors on behalf of the Company; |
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| (xi) | Assist in obtaining the fidelity bond and directors’ and
officers’/errors and omissions insurance policies for the Company in accordance
with the requirements of Rule 17g-1 and 17d-1(d)(7) under the 1940 Act, including
evaluation of insurance carriers, recommending appropriate coverage levels and
evaluating the costs thereof, as such bond and policies are approved by the
Company’s Board of Directors; |
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| (xii) | Monitor the Company’s assets to assure adequate fidelity bond coverage
is maintained; |
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| (xiii) | Draft agendas and resolutions for quarterly and special board meetings; |
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| (xiv) | Coordinate the preparation, assembly and mailing of board materials; |
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| (xv) | Attend board meetings and draft minutes thereof; |
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| (xvi) | Maintain the Company’s corporate calendar to assure compliance with
various filing and board approval deadlines; |
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| (xvii) | Assist the Company in the handling of SEC examinations and responses thereto; |
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| (xviii) | If the chief executive officer or chief financial officer of the Company is
required to provide a certification as part of the Trust’s Form 10-Q or Form 10-K
filing pursuant to regulations promulgated by the SEC under Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002, Highland will provide (to such person or entity as
agreed between the Company and Highland) a sub-certification in support of certain
matters set forth in the aforementioned certification, such sub-certification to be
in such form and relating to such matters as agreed between the Company and
Highland from time to time. Highland shall be required to provide the
sub-certification only during the term of the Agreement and only if it receives
such cooperation as it may request to perform its investigations with respect to
the sub-certification. For clarity, the sub-certification is not itself a
certification under the Xxxxxxxx-Xxxxx Act of 2002 or under any |
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other regulatory requirement; |
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| (xix) | Prepare and coordinate the Company’s state notice filings; |
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| (xx) | Furnish the Company office space in the offices of Highland, or in such
other place or places as may be agreed from time to time, and all necessary office
facilities, simple business equipment, supplies, utilities and telephone service
for managing the affairs of the Company; |
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| (xxi) | Perform clerical, bookkeeping and other administrative services not
provided by the Company’s other service providers; |
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| (xxii) | Determine or oversee the determination and publication of the Company’s net asset
value in accordance with the Company’s policies as adopted from time to time by the
Board of Directors; |
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| (xxiii) | Oversee the maintenance by the Company’s custodian and transfer agent and
dividend disbursing agent of certain books and records of the Company as required
under Rule 31a-1(b)(2)(iv) of the 1940 Act and maintain (or oversee maintenance by
such other persons as approved by the Board of Directors) such other books and
records required by law or for the proper operation of the Company; |
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| (xxiv) | Determine the amounts available for distribution as dividends and distributions
to be paid by the Fund to its shareholders; calculate, analyze and prepare a
detailed income analysis and forecast future earnings for presentation to the Board
of Directors; prepare and arrange for the printing of dividend notices to
shareholders, as applicable, and provide the Company’s dividend disbursing agent
and custodian with such information as is required for such parties to effect the
payment of dividends and distributions and to implement the Company’s dividend
reinvestment plan; |
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| (xxv) | Serve as liaison between the Company and each of its service
providers; |
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| (xxvi) | Assist in monitoring and tracking the daily cash flows of the individual assets
of the Company, as well as security position data of portfolio investments; assist
in resolving any identified discrepancies with the appropriate third party,
including the Company’s custodian, administrative agents and other service
providers, through various means including researching available data via agent
notices, financial news and data services, and other sources. |
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| (xxvii) | Monitor compliance with leverage tests under the Company’s credit facility, and
communicate with leverage providers and rating agencies; |
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| (xxviii) | Coordinate negotiation and renewal of credit agreements for presentation to the
Board of Directors; |
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| (xxix) | Coordinate negotiations of agreements with counterparties and the Company’s
custodian for derivatives, short sale and similar transactions, as applicable; |
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| (xxx) | Provide assistance with the settlement of trades of portfolio
securities; |
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| (xxxi) | Coordinate and oversee the provision of legal services to the Company; |
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| (xxxii) | Cooperate with the Company’s independent registered public accounting firm in
connection with audits and reviews of the Company’s financial statements, including
interviews and other meetings, and provide necessary information and coordinate
confirmations of bank loans and other assets for which custody is not through DTC,
as necessary; |
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| (xxxiii) | Provide Secretary and any Assistant Secretaries, Treasurer and any Assistant
Treasurers and other officers for the Company as requested; |
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| (xxxiv) | Develop or assist in developing guidelines and procedures to improve overall
compliance by the Company; |
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| (xxxv) | Investigate and research customer and other complaints to determine liability,
facilitate resolution and promote equitable treatment of all parties; |
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| (xxxvi) | Determine and monitor expense accruals for the Company; |
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| (xxxvii) | Authorize expenditures and approve bills for payment on behalf of the Company; |
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| (xxxviii) | Monitor the number of shares of the Company registered and assist in the
registration of additional shares, as necessary; |
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| (xxxix) | Prepare such reports as the Board of Directors of the Company may request from
time to time; |
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| (xl) | Administer and oversee any securities lending program of the Company; |
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| (xli) | Be responsible for the Company’s allocable portion of the employment
costs of the Company’s executive officers and their respective staffs and other
employees of Highland who devote substantial attention to the administration of the
Company, except that the Company will be responsible for all costs relating to
maintenance of a toll-free stockholder information telephone line, including the
Company’s allocable share of routine overhead expenses of any third-party service
provider furnishing this telephone line; and |
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| (xlii) | Perform such additional administrative duties relating to the administration of
the Company as may subsequently be agreed upon in |
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writing between the Company and Highland.
Except as expressly set forth above, the Agreement will remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first written above.
| HIGHLAND CAPITAL MANAGEMENT, L.P. |
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| By: | Strand Advisors, Inc., its general partner |
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| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | President | |||
| HIGHLAND DISTRESSED OPPORTUNITIES, INC. |
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| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | President | |||
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