1
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 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 and reports shall
include: (i) statistical and financial market information with respect
2
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.
3
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.
9) THIS AGREEMENT SHALL BE CONSTRUED IN ACCOR DANCE WITH THE
LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO
4
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:
Xxxxx Xxxxx Corporation
5
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: _____________________________
Name:
Title:
6
PAINEWEBBER INCORPORATED
By: _____________________________
Name:
Title:
7
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
8
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
9
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.
