Exhibit k(4)
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of June
[ ], 2004, between Xxxxx Xxxxx Management ("Xxxxx Xxxxx") and UBS Securities LLC
("UBS Securities").
WHEREAS, Xxxxx Xxxxx Floating-Rate Income 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., and shall not exceed [ ]% of the aggregate offering price in
the initial public offering of the common shares of the Fund (the
"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 [ ], 2004, 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 Management
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: _____________________________
Name:
Title:
UBS SECURITIES LLC
By: _____________________________
By:
Title:
By: _____________________________
By:
Title:
UBS Securities LLC Indemnification Agreement
June [ ], 2004
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 June [ ], 2004 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: ___________________________
Name:
Title:
Accepted and agreed to as of
the date first above written:
UBS SECURITIES LLC
By: ___________________________
By:
Title:
By: ___________________________
By:
Title:
