SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of
[ ], 2003, between Xxxxx Xxxxx Management ("Xxxxx Xxxxx") and UBS Securities LLC
("UBS Securities").
WHEREAS, Xxxxx Xxxxx Senior Floating-Rate Trust (the "Fund")
is a closed-end, 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 Fund; and
WHEREAS, Xxxxx Xxxxx desires to retain UBS Securities to
provide shareholder servicing and market information with respect to the Fund,
and UBS Securities 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 UBS Securities, for the period and
on the terms and conditions set forth herein, to provide the
following services (the "Services"):
(a) At the request of and as specified by Xxxxx Xxxxx,
undertake to make available public information
pertaining to the Fund on an ongoing basis and to
communicate to investors and prospective investors
the Fund's features and benefits (including arranging
periodic seminars or conference calls for Xxxxx Xxxxx
to communicate to investors, responding to questions
from current or prospective shareholders and
contacting specific shareholders, where appropriate),
provided that Services shall not include customary
market research information provided by UBS
Securities or its registered broker-dealer affiliates
in the ordinary course of their business.
(b) At the request of and as specified by Xxxxx Xxxxx,
make available to investors and prospective investors
market price, net asset value, yield and other
information regarding the Fund (provided that
Services shall not include customary market research
information provided by UBS Securities or its
registered broker-dealer affiliates in the ordinary
course of their business), if reasonably obtainable,
for the purpose of maintaining the visibility of the
Fund in the investor community.
(c) At the request of Xxxxx Xxxxx or the Fund, provide
certain economic research and statistical information
and reports, if reasonably obtainable, to Xxxxx Xxxxx
or the Fund and consult with representatives of Xxxxx
Xxxxx and/or Trustees of the Fund in connection
therewith, which information and reports shall
include: (i) statistical and financial market
information with respect to the Fund's market
performance; and (ii) comparative information
regarding the Fund 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 Fund and such
other companies, and (z) other relevant performance
indicators. Except as legally required, such
information and reports may not be quoted or referred
to, orally or in writing, reproduced or disseminated
by the Fund or any of its affiliates or any of their
agents, without the prior written consent of UBS
Securities, which consent will not be unreasonably
withheld.
(d) At the request of Xxxxx Xxxxx or the Fund, provide
information to and consult with Xxxxx Xxxxx and/or
the Board of Trustees of the Fund 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 Fund, conversion of the Fund 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 Fund, UBS
Securities shall limit or cease any action or service
provided hereunder to the extent and for the time
period requested by Xxxxx Xxxxx or the Fund;
provided, however, that pending termination of this
Agreement as provided for in Section 5 hereof, any
such limitation or cessation shall not relieve Xxxxx
Xxxxx of its payment obligations pursuant to Section
2 hereof.
(f) UBS Securities will promptly notify Xxxxx Xxxxx or
the Fund, as the case may be, if it learns of any
material inaccuracy or misstatement in, or material
omission from, any written information provided by
UBS Securities to Xxxxx Xxxxx or the Fund in
connection with the performance of Services by UBS
Securities under this Agreement. UBS Securities
acknowledges that in performing the Services under
this Agreement, it will comply in all material
respects with all applicable laws, rules and
regulations.
2. Xxxxx Xxxxx will pay UBS Securities a fee computed daily and
payable quarterly at an annualized rate of 0.10% of the
average daily gross assets of the Fund; provided, however,
that the fee payable hereunder by Xxxxx Xxxxx to UBS
Securities shall be reduced for the duration of any period
during which Xxxxx Xxxxx voluntarily agrees to reduce or limit
the management fee payable to it by the Fund under any
management contract with the Fund from time-to-time in effect
(provided, however, that the fee payable by Xxxxx Xxxxx shall
not be reduced in connection with any contractual fee waiver
or expense reimbursement, which is disclosed in the prospectus
of the Fund). The reduced fee payable hereunder during any
such period shall be the percentage of the usual fee payable
hereunder equal to the percentage of the usual management fee
received by Xxxxx Xxxxx after giving effect to the fee waiver
or limitation (i.e., if the management fee is effectively
reduced by 40% the fee hereunder also shall be reduced by
40%); provided further, that under no circumstances shall the
fee hereunder be reduced to less than zero for any period.
Fees payable hereunder shall be subject to the sales charge
limits of the National Association of Securities Dealer, Inc.,
which UBS Securities understands to be 9.0% of the aggregate
offering price in the initial public offering of the common
shares of the Fund (the "Offering"), when taken together with
the sales load and all other items of underwriting
compensation (including reimburseable legal and other
expenses) received by the underwriters in connection with such
Offering (the "Maximum Fee Amount").
3. Xxxxx Xxxxx acknowledges that the Services of UBS Securities
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 Fund's portfolio.
No provision of this Agreement shall be considered as
creating, nor shall any provision create, any obligation on
the part of UBS Securities, and UBS Securities 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, it being understood between the parties
hereto that any such advice, recommendations or such similar
activities if, and to the extent, agreed to be performed by
UBS Securities shall be the subject of a separate agreement
with Xxxxx Xxxxx, including, but not limited to, separate
agreements with respect to any indemnification of UBS
Securities.
Except to the extent legally required, neither (i) the name of
UBS Securities nor (ii) any advice rendered by UBS Securities
to Xxxxx Xxxxx or the Fund in connection with the services
performed by UBS Securities pursuant to this Agreement will be
quoted or referred to orally or in writing, or in the case of
(ii), reproduced or disseminated, by the Fund or any of its
affiliates or any of their agents, without the prior written
consent
of UBS Securities, which consent will not be unreasonably
withheld.
4. Nothing herein shall be construed as prohibiting UBS
Securities or its affiliates from providing similar or other
services to any other clients (including other registered
investment companies or other investment advisers), so long as
Services provided by UBS Securities to Xxxxx Xxxxx and the
Fund are not impaired thereby. Neither this Agreement nor the
performance of the Services hereunder shall be considered to
constitute a partnership, association or joint venture between
UBS Securities and Xxxxx Xxxxx. In addition, nothing herein
shall be construed to constitute UBS Securities as the agent
or employee of Xxxxx Xxxxx or Xxxxx Xxxxx as the agent or
employee of UBS Securities, and neither party shall make any
representation to the contrary.
5. This Agreement shall continue coterminously with and so long
as the Investment Advisory Agreement, dated [ ], 2003, remains
in effect between the Fund and Xxxxx Xxxxx, or any similar
investment advisory agreement with a successor in interest or
affiliate of Xxxxx Xxxxx remains in effect, as, and to the
extent, that such investment advisory agreement is renewed
periodically in accordance with the 1940 Act; provided,
however, that this Agreement shall automatically terminate if
further payments to UBS Securities would cause the total
amount of underwriting compensation in connection with the
Offering to exceed the Maximum Fee Amount. This Agreement may
not be assigned, except by operation of law or in connection
with the sale of all or substantially all of the assets or of
the equity securities of one of the parties hereto, without
the other party's prior consent.
6. Xxxxx Xxxxx will furnish UBS Securities with such information
as UBS Securities believes appropriate to its assignment
hereunder (all such information so furnished being the
"Information"). Xxxxx Xxxxx recognizes and confirms that UBS
Securities (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.
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 UBS
Securities if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information
delivered to UBS Securities. UBS Securities acknowledges that
certain of the Information provided by Xxxxx Xxxxx may be
proprietary to Xxxxx Xxxxx and hereby agrees that it will not
disclose (other than as may be required by applicable law or
regulatory proceeding) to any third party any Information
provided to UBS Securities
by Xxxxx Xxxxx and specifically identified in writing by
Xxxxx Xxxxx, prior to or at the time of its delivery, as
confidential or proprietary.
7. It is understood that UBS Securities is being engaged
hereunder solely to provide the Services described above to
Xxxxx Xxxxx and to the Fund and that UBS Securities is not
acting as an agent or fiduciary of, and shall have no duties
or liability to the current or future shareholders of Xxxxx
Xxxxx or any other third party in connection with its
engagement hereunder, all of which are hereby expressly
waived.
8. Xxxxx Xxxxx agrees that UBS Securities shall have no liability
to Xxxxx Xxxxx or the Fund for any act or omission to act by
UBS Securities in the course of its performance under this
Agreement, in the absence of bad faith, gross negligence or
willful misconduct on the part of UBS Securities. 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.
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 XXXXX XXXXX AND UBS SECURITIES AGREE THAT ANY ACTION
OR PROCEEDING BASED HEREON, OR ARISING OUT OF UBS SECURITIES'
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 UBS SECURITIES 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 UBS SECURITIES 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 UBS Securities 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 UBS Securities and Xxxxx Xxxxx.
13. All notices required or permitted to be sent under this
Agreement shall be sent, if to Xxxxx Xxxxx:
Xxxxx Xxxxx Corporation
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Legal Officer
or if to UBS Securities:
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
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 State 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:
UBS SECURITIES LLC
By:
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Name:
Title:
By:
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Name:
Title:
UBS Securities LLC Indemnification Agreement
[ ], 2003
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
In connection with the engagement of UBS Securities LLC ("UBS
Securities") to provide the Services to the undersigned (the "Company") with the
matters set forth in the Shareholder Servicing Agreement dated [ ], 2003 between
the Company and UBS Securities (the "Agreement"), in the event that UBS
Securities becomes involved in any capacity in any claim, suit, action,
proceeding, investigation or inquiry (including, without limitation, any
shareholder or derivative action or arbitration proceeding) (collectively, a
"Proceeding") in connection with or arising out of the Agreement or the Services
to be provided thereunder, the Company agrees to indemnify, defend and hold UBS
Securities harmless to the fullest extent permitted by law, from and against any
losses, claims, damages, liabilities and expenses in connection with or arising
out of the Agreement or the Services to be provided thereunder (a "Covered
Claim"), except to the extent that it shall be determined by a court of
competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review, that such losses, claims, damages,
liabilities and expenses resulted solely from the gross negligence, bad faith or
willful misconduct of UBS Securities. In addition, in the event that UBS
Securities becomes involved in any capacity in any Proceeding which relates to a
Covered Claim, the Company will reimburse UBS Securities for its legal and other
expenses (including the reasonable cost of any investigation and preparation) as
such expenses are incurred by UBS Securities in connection therewith. If such
indemnification were not to be available for any reason, the Company agrees to
contribute to the losses, claims, damages, liabilities and expenses involved (i)
in the proportion appropriate to reflect the relative benefits received or
sought to be received by the Company and its stockholders, on the one hand, and
UBS Securities, on the other hand, in the matters contemplated by the Agreement
or (ii) if (but only if and to the extent) the allocation provided for in clause
(i) is for any reason held unenforceable, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company and its stockholders, on the one hand, and the
party entitled to contribution, on the other hand, as well as any other relevant
equitable considerations; provided, that in no event shall the Company
contribute less than the amount necessary to assure that UBS Securities is not
liable for losses, claims, damages, liabilities and expenses in excess of the
amount of fees actually received by UBS Securities pursuant to the Agreement.
Relative fault shall be determined by reference to, among other things, whether
any alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Company or other conduct by the Company (or its
employees or other agents), on the one hand, or by UBS Securities, on the other
hand. The Company will not settle any Proceeding in respect of which indemnity
may be sought hereunder, whether or not UBS Securities is an actual or potential
party to such Proceeding, without UBS Securities's prior written consent. For
purposes of this Indemnification Agreement, UBS Securities shall include UBS
Securities LLC, any of its affiliates, each other person, if any, controlling
UBS Securities or any of its affiliates, their respective officers, current and
former directors, employees and agents, and the successors and assigns of all of
the foregoing persons. The foregoing indemnity and contribution agreement shall
be in addition to any rights that any indemnified party may have at common law
or otherwise.
If any Proceeding is brought against UBS Securities in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
UBS Securities shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to UBS Securities
and payment of all fees and expenses; provided, however, that the omission to so
notify the Company shall not relieve the Company from any liability which the
Company may have to UBS Securities or otherwise, unless and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the Company. UBS Securities shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of UBS Securities unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
Proceeding or the Company shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to have charge of the defense of
such Proceeding or UBS Securities shall have reasonably concluded that there may
be defenses available to it which are different from, additional to or in
conflict with those available to the Company (in which case the Company shall
not have the right to direct the defense of such Proceeding on behalf of UBS
Securities), in any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction). The Company shall not be liable for any
settlement of any Proceeding effected without its written consent but if settled
with the written consent of the Company, the Company agrees to indemnify and
hold harmless UBS Securities from and against any loss or liability by reason of
such settlement. Notwithstanding the foregoing sentence, if at any time UBS
Securities shall have requested the Company to reimburse UBS Securities for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the Company agrees that it shall be liable for any settlement of
any Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by the Company of the
aforesaid request, (ii) the Company shall not have reimbursed UBS Securities in
accordance with such request prior to the date of such settlement and (iii) UBS
Securities shall have given the Company at least 30 days' prior notice of its
intention to settle. The Company shall not, without its prior written consent,
effect any settlement of any pending or threatened Proceeding in respect of
which UBS Securities is or could have been a party and indemnity could have been
sought hereunder by UBS Securities, unless such settlement includes an
unconditional release of UBS Securities from all liability on claims that are
the subject matter of such Proceeding and does not include an admission of
fault, culpability or a failure to act, by or on behalf of UBS Securities.
The Company agrees that neither UBS Securities nor any of its
affiliates, directors, agents, employees or controlling persons shall have any
liability to the Company or any person asserting claims on behalf of or in right
of the Company in connection with or as a result of a Covered Claim, except to
the extent that it shall be determined by a court of competent jurisdiction in a
judgment that has become final in that it is no longer subject to appeal or
other review that any losses, claims, damages, liabilities or expenses incurred
by the Company resulted solely from the gross negligence, bad faith or willful
misconduct of UBS Securities in performing the Services.
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR
DISPUTE OF ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING
TO THIS AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS SET
FORTH BELOW, NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT
OTHER THAN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF
NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF
SUCH MATTERS, AND THE COMPANY AND UBS SECURITIES CONSENT TO THE JURISDICTION OF
SUCH COURTS AND PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANY HEREBY
CONSENTS TO PERSONAL JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY
CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY AND
THIRD PARTY AGAINST UBS SECURITIES OR ANY INDEMNIFIED PARTY. EACH OF UBS
SECURITIES AND THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN
ANY WAY RELATING TO THIS AGREEMENT. THE COMPANY AGREES THAT A FINAL JUDGMENT IN
ANY PROCEEDING OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT
BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND
MAY BE ENFORCED IN ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANY IS
OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
The foregoing Indemnification Agreement shall remain in full
force and effect notwithstanding any termination of UBS Securities's engagement.
This Indemnification Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same agreement.
Very truly yours,
XXXXX XXXXX MANAGEMENT
By:
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Name:
Title:
Accepted and agreed to as of
the date first above written:
UBS SECURITIES LLC
By:
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Name:
Title:
By:
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Name:
Title:
Name:
Title:
