MARKETING AND STRUCTURING FEE AGREEMENT
Exhibit (k)(5)
June ___, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This agreement is between Highland Capital Management, L.P. (the “Company”) and Xxxxxx Xxxxxxx
& Co. Incorporated (“Xxxxxx Xxxxxxx”) with respect to the Highland Credit Strategies Fund (the
“Fund”).
1. Fee. (a) In consideration of advice to the Company relating to, but not limited
to, the design, structure, corporate finance and marketing of the Fund and for assistance in
connection with distribution of the Fund as a closed-end investment company, the Company shall pay
a fee to you calculated based on 1.25% of the aggregate price to public of the common shares of
beneficial interest of the Fund sold by Xxxxxx Xxxxxxx in the Fund’s initial public offering (the
“Offering”) (including any common shares of the Fund over-allotted by Xxxxxx Xxxxxxx in the
Offering regardless of whether the over-allotment option in the Offering is exercised), equal to $[ ] (the “Fee”).
(b) Notwithstanding Section 1(a), in the event that the Company (or the Fund or any person or
entity affiliated with the Company or the Fund or acting on behalf of or at the direction of the
Company or the Fund) compensates or agrees to compensate any broker or dealer participating in the
Offering (each, an “Other Broker”) for any services or otherwise in connection with the Offering or
with respect to the Fund (excluding for this purpose any compensation paid directly to the entire
underwriting syndicate, as a group, pursuant to the principal underwriting agreement relating to
the Offering), whether such compensation be denominated as a fee, an expense reimbursement, a
set-off, a credit or otherwise (such compensation with respect to any Other Broker, such Other
Broker’s “Other Compensation”), then the amount of the Fee shall be increased as and to the extent
necessary so that the Fee payable to Xxxxxx Xxxxxxx hereunder, expressed as a percentage of the
aggregate price to public of the common shares of the Fund sold by Xxxxxx Xxxxxxx in the Offering
(including any common shares of the Fund over-allotted by Xxxxxx Xxxxxxx in the Offering regardless
of whether the over-allotment option in the Offering is exercised), is no less than the Other
Compensation, expressed as a percentage of the aggregate price to public of the common shares
of the Fund sold by such Other Broker in the Offering.
(c) The Fee paid to Xxxxxx Xxxxxxx shall not exceed [ ]% of the total price to the
public of the common shares sold in the Offering. The Fee shall be paid on or before June [ ],
2006 and shall be made by wire transfer to the order of Xxxxxx Xxxxxxx. The Company acknowledges
that the Fee is in addition to any compensation you earn in connection with your role as an
underwriter to the Fund in its initial public offering, which services are distinct from and in
addition to the market and structuring services described above.
2. Term. This Agreement shall terminate upon payment of the entire amount of the Fee,
as specified in Section 1 hereof.
3. Indemnification. The Company 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.
4. Not an Investment Advisor. The Company acknowledges that you are not providing any
advice hereunder 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 you, and you
are not agreeing hereby, 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.
5. Not Exclusive. Nothing herein shall be construed as prohibiting you or your
affiliates from acting as an underwriter or financial advisor or in any other capacity for any
other persons (including other registered investment companies or other investment managers).
Neither this Agreement nor the performance of the services contemplated hereunder shall be
considered to constitute a partnership, association or joint venture between Xxxxxx Xxxxxxx and the
Company. In addition, nothing in this Agreement shall be construed to constitute Xxxxxx Xxxxxxx as
the agent or employee of the Company or the Company as the agent or employee of Xxxxxx Xxxxxxx, and
neither party shall make any representation to the contrary. It is understood that Xxxxxx Xxxxxxx
is engaged hereunder solely to provide the services described above to the Company and that Xxxxxx
Xxxxxxx is not acting as an agent or fiduciary of, and Xxxxxx Xxxxxxx shall not have any duties or
liability to, the current or future partners of the Company or any other third party in connection
with its engagement hereunder, all of which are hereby expressly waived to the extent the Company
has the authority to waive such duties and liabilities.
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6. Assignment. This Agreement may not be assigned by any party without prior written
consent of the other party.
7. Amendment; Waiver. No provision of this Agreement may be amended or waived except
by an instrument in writing signed by the parties hereto.
8. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
9. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof.
This Agreement shall be effective as of the date first written above.
[END OF TEXT]
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| HIGHLAND CAPITAL MANAGEMENT, L.P. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Agreed and Accepted:
| XXXXXX XXXXXXX & CO. INCORPORATED | ||||
By: |
||||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Executive Director | |||
Indemnification Agreement
June [ ], 2006
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx Xxxxxxx”) to
advise and assist the undersigned (together with its affiliates and subsidiaries, referred to as
the “Company”) with the matters set forth in the Marketing and Structuring Fee Agreement dated June
[ ], 2006 between the Company and Xxxxxx Xxxxxxx (the “Marketing and Structuring Fee Agreement”),
in the event that Xxxxxx Xxxxxxx 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) with respect to the services performed pursuant to and in
accordance with the Marketing and Structuring Fee Agreement, the Company has agreed to indemnify
and hold harmless Xxxxxx Xxxxxxx and Xxxxxx Xxxxxxx’x affiliates and their respective officers,
directors, employees and agents and each other person, if any, controlling Xxxxxx Xxxxxxx or any of
Xxxxxx Xxxxxxx’x affiliates (Xxxxxx Xxxxxxx and each such other person being an “Indemnified
Person”) from and against any losses, claims, damages or liabilities related to, arising out of or
in connection with the activities (the “Activities”) performed by any Indemnified Person in
connection with, or arise out of, or based upon, the Marketing and Structuring Fee Agreement and/or
any action taken by any Indemnified Person in connecting therewith (including, without limitation,
any presentation given by the Company and an Indemnified Person relating to the common shares of
beneficial interest (the “Common Shares”) of Highland Credit Strategies Fund (the “Fund”)), and
will reimburse each Indemnified Person for all expenses (including fees and expenses of counsel) as
they are incurred in connection with investigating, preparing, pursuing or defending any claim,
suit, action, proceeding, investigation or inquiry related to, arising out of or in connection with
the Activities, whether or not pending or threatened and whether or not any Indemnified Person is a
party. The Company will not, however, be responsible for any losses, claims, damages, liabilities
(or expenses relating thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of any Indemnified Person. The Company also agrees that no Indemnified
Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to
the Company for or in connection with the Activities, except for any such liability for losses,
claims, damages or liabilities incurred by the Company that are finally judicially
determined to have resulted from the bad faith or gross negligence of such Indemnified Person.
Notwithstanding the foregoing, in no event shall the Company be responsible for any losses,
claims, damages or liabilities to any Indemnified Person arising from any such claim, suit, action,
proceeding, investigation or inquiry in excess of the gross proceeds received by the Company from
the initial public offering of the Common Shares of the Fund (the “Offering”); provided, however,
that the Company shall, as set forth above, indemnify and be responsible for, regardless of the
gross proceeds received by the Company from the Offering, all expenses (including fees and expenses
of counsel) incurred in connection with investigating, preparing, pursuing or defending any claim,
suit, action, proceeding, investigation or inquiry related to, arising out of or in connection with
the Activities, whether or not pending or threatened and whether or not any Indemnified Person is a
party, as set forth above.
The Company will not, without Xxxxxx Xxxxxxx’x prior written consent, settle, compromise,
consent to the entry of any judgment in or otherwise seek to terminate any claim, suit, action,
proceeding, investigation or inquiry in respect of which indemnification may be sought hereunder
(whether or not any Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination includes a release of each Indemnified Person from any liabilities arising
out of such claim, suit, action, proceeding, investigation or inquiry. No Indemnified Person
seeking indemnification, reimbursement or contribution under this agreement (the “Indemnification
Agreement”) will, without our prior written consent, settle, compromise, consent to the entry of
any judgment in or otherwise seek to terminate any claim, suit, action, proceeding, investigation
or inquiry referred to in the preceding paragraph.
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
(including the net proceeds from the Common Shares sold by Xxxxxx Xxxxxxx in the Offering before
deducting expenses) and its partners and affiliates and other constituencies, on the one hand, and
Xxxxxx Xxxxxxx, on the other hand, in the matters contemplated by the Marketing and Structuring Fee
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
partners and affiliates and other constituencies, on the one hand, and the party entitled to
contribution, on the other hand, as well as any other relevant equitable considerations. The
Company agrees that for the purposes of this paragraph the relative benefits received, or sought to
be received, by the Company and its partners and affiliates, on the one hand, and the party
entitled to contribution, on
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the other hand, of a transaction as contemplated shall be deemed to be in the same proportion
that the total value received or paid or contemplated to be received or paid by the Company or its
partners or affiliates and other constituencies, as the case may be, as a result of or in
connection with the transaction (whether or not consummated) for which Xxxxxx Xxxxxxx has been
retained to perform financial services bears to the fees paid to Xxxxxx Xxxxxxx under the Marketing
and Structuring Fee Agreement; provided that in no event shall the Company contribute less than the
amount necessary to assure that Xxxxxx Xxxxxxx is not liable for losses, claims, damages,
liabilities and expenses in excess of the amount of fees actually received by Xxxxxx Xxxxxxx
pursuant to the Marketing and Structuring Fee 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 Xxxxxx Xxxxxxx, on the other hand.
This Indemnification Agreement, together with the Marketing and Structuring Fee Agreement, any
contemporaneous written agreements and any prior written agreements (to the extent not superseded
by this agreement) that relate to the Offering of the Common Shares, represents the entire
agreement between the Company and the Indemnified Parties with respect to the marketing and
structuring fee paid to Xxxxxx Xxxxxxx under the Marketing and Structuring Fee Agreement.
The Company acknowledges that in connection with the Offering of the Common Shares: (i)
Xxxxxx Xxxxxxx has acted at arms length, is not an agent of, and owes no fiduciary duties to, the
Company, the Fund or any person affiliated with the Fund or the Company, (ii) Xxxxxx Xxxxxxx owes
the Company only those duties and obligations set forth in this Indemnification Agreement and (iii)
Xxxxxx Xxxxxxx may have interests that differ from those of the Company. The Company waives to the
full extent permitted by applicable law any claims any of them may have against Xxxxxx Xxxxxxx
arising from an alleged breach of fiduciary duty in connection with the offering of the Common
Shares.
The provisions of this Indemnification Agreement shall apply to the Activities and any
modification thereof and shall remain in full force and effect regardless of any termination or the
completion of Xxxxxx Xxxxxxx’x services under the Marketing and Structuring Fee Agreement.
This Indemnification Agreement and Marketing and Structuring Fee Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that state.
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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.
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| Very truly yours, HIGHLAND CAPITAL MANAGEMENT, L.P. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted and agreed to as of
the date first above written:
the date first above written:
| XXXXXX XXXXXXX & CO. INCORPORATED | ||||
By: |
||||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Executive Director | |||
