EXHIBIT k.3
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of [ ],
2003, between PIMCO Advisors Fund Management LLC ("PIMCO Advisors") and UBS
Securities LLC ("UBS Securities").
WHEREAS, Xxxxxxxx-Xxxxxxxxx Convertible & Income Fund II (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, PIMCO Advisors is the investment manager of the Fund; and
WHEREAS, PIMCO Advisors 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. PIMCO Advisors hereby employs UBS Securities, 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 Fund on an ongoing basis and to communicate to investors and prospective
investors the Fund'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 Fund, if
reasonably obtainable, for the purpose of maintaining the visibility of the Fund
in the investor community;
(c) At the request of PIMCO Advisors or the Fund, provide certain
economic research and statistical information and reports, if reasonably
obtainable, on behalf of PIMCO Advisors or the Fund and consult with
representatives of PIMCO Advisors and/or the Board of 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;
and
(d) At the request of PIMCO Advisors or the Fund, provide
information to and consult with PIMCO Advisors 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 PIMCO Advisors 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 PIMCO Advisors 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 PIMCO
Advisors of its payment obligations pursuant to Section 2 hereof.
(f) UBS Securities will promptly notify PIMCO Advisors and
the Fund if it learns of any material inaccuracy or misstatement in, or material
omission from, any written information provided by UBS Securities to PIMCO
Advisors or the Fund in connection with the performance of services by UBS
Securities under this Agreement.
2. PIMCO Advisors will pay UBS Securities a fee computed monthly and
payable quarterly at the annual rate of 0.10% of the average daily total managed
assets of the Fund. "Total managed assets" means the total assets of the Fund
(including any assets attributable to any preferred shares or other forms of
leverage of the Fund that may be outstanding) minus accrued liabilities (other
than liabilities representing leverage).
3. PIMCO Advisors acknowledges that the shareholder 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.
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 managers),
so long as UBS Securities' services to PIMCO Advisors and the Fund are not
impaired thereby.
5. The term of this Agreement shall commence upon the date referred to
above and shall thereafter continue so long as the Investment Management
Agreement remains in effect between the Fund and PIMCO Advisors, or any
successor in interest or affiliate of PIMCO Advisors, as and to the extent that
such Investment Management Agreement is renewed periodically in accordance with
the 1940 Act; provided, however, that in the event that the contractual advisory
fee rate payable by the Fund to PIMCO Advisors or such successor or affiliate
under the Investment Management Agreement is reduced, the fee payable by PIMCO
Advisors to UBS Securities pursuant to Section 2 of this Agreement shall be
reduced in proportion to, and for the period of,
such reduction of the advisory fee, and this agreement shall be deemed to be
amended automatically to reflect the same.
6. To the extent permitted by Regulation S-P, Regulation FD and
other applicable law, PIMCO Advisors will furnish UBS Securities with such
information as UBS Securities reasonably believes appropriate to its assignment
hereunder (all such information so furnished being the "Information"). PIMCO
Advisors 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. To the best of PIMCO Advisors' knowledge, the Information to
be furnished by PIMCO Advisors 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. PIMCO Advisors 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.
7. It is understood that UBS Securities is being engaged hereunder
solely to provide the services described above to PIMCO Advisors 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 the Fund
or any other third party in connection with its engagement hereunder, all of
which are hereby expressly waived.
8. PIMCO Advisors agrees that UBS Securities shall have no liability
to PIMCO Advisors 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 gross
negligence or willful misconduct on the part of UBS Securities. PIMCO Advisors
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. Notwithstanding the foregoing or anything to
the contrary in this Agreement or in the Indemnification Agreement, PIMCO
Advisors' indemnification obligations shall not apply to any losses, claims,
damages, liabilities, fines or expenses (including legal expenses) arising out
of or relating to limitations on or the reasonableness or characterization of
the compensation payable by PIMCO Advisors to UBS Securities under this
Agreement, including as a result of any violation of applicable rules of the
National Association of Securities Dealers, Inc or other applicable law.
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 PIMCO ADVISORS 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. PIMCO
ADVISORS 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 PIMCO ADVISORS 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 JURISDICTION REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11. PIMCO Advisors 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 PIMCO Advisors.
13. All notices required or permitted to be sent under this Agreement
shall be sent, if to PIMCO Advisors:
PIMCO Advisors Fund Management LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
or if to UBS Securities:
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Legal Officer
or such other name or address as may be given in writing to the other party.
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 executed on separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Shareholder Servicing Agreement as of the date first above written.
PIMCO ADVISORS FUND
MANAGEMENT LLC
By: _____________________________
Name:
Title:
UBS SECURITIES LLC
By: _____________________________
Name: Xxxxx Xxxxxxxx
Title: Managing Director
By: _____________________________
Name: Xxxx X. Key
Title: Director
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 advise and assist the undersigned (the "Company") with the matters set forth
in the 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 any matter in any
way relating to or referred to in the Agreement or arising out of the matters
contemplated by the Agreement, including, without limitation, related services
and activities prior to the date of the Agreement, the Company agrees, subject
to any limitations specified in the Agreement, 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 any matter
in any way relating to or referred to in the Agreement or arising out of the
matters contemplated by the Agreement, including, without limitation, related
services and activities prior to the date of the Agreement, except to the extent
that such losses, claims, damages, liabilities and expenses resulted from the
gross negligence or willful misconduct of UBS Securities. In addition, in the
event that UBS Securities becomes involved in any capacity in any Proceeding in
connection with any matter in any way relating to or referred to in the
Agreement or arising out of the matters contemplated by the Agreement,
including, without limitation, related services and activities prior to the date
of the Agreement, the Company will, subject to any limitations specified in the
Agreement, reimburse UBS Securities for its reasonable legal and other expenses
(including the 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, 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, 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, on the one hand, and the party entitled to
contribution, on 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, as the case may be, as a
result of or in connection with the transaction (whether or not consummated) for
which UBS Securities has been retained to perform services bears to the fees
paid to UBS Securities under the Agreement; provided, that in no event
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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. Promptly after UBS Securities receives notice of
the commencement of any action or other proceeding in respect of which
indemnification or reimbursement may be sought hereunder, UBS Securities will
notify the Company thereof; but the omission so to notify the Company shall not
relieve the Company from any obligation hereunder unless, and only to the extent
that, such omission results in the Company's forfeiture of substantive rights or
defenses. If any such action or other proceeding shall be brought against UBS
Securities, the Company shall, upon written notice given reasonably promptly
following UBS Securities' notice to the Company of such action or proceeding, be
entitled to assume the defense thereof at the Company's expense with counsel
chosen by the Company and reasonably satisfactory to UBS Securities; provided,
however, that UBS Securities may at its own expense retain separate counsel to
participate in such defense. The Company agrees that it will not, without the
prior written consent of UBS Securities, 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 UBS Securities' engagement under the
Agreement unless such settlement, compromise or consent includes an
unconditional release of UBS Securities from all liability arising or that may
arise out of such claim, action or proceeding. 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.
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 either UBS Securities' engagement
under the Agreement or any matter referred to in the Agreement, including,
without limitation, related services and activities prior to the date of the
Agreement, except to the extent that any such losses, claims, damages,
liabilities or expenses incurred by the Company resulted solely from the gross
negligence or willful misconduct of UBS Securities in performing the services
that are the subject of the Agreement.
For the avoidance of doubt, UBS Securities' underwriting activities on
behalf of the Company or its clients, including the Fund referred to in the
Agreement, shall not constitute a matter in any way relating to or referred to
in the Agreement or be deemed to arise out of matters contemplated by the
Agreement, and the Company's indemnification obligations hereunder shall not
apply to any Proceeding arising out of or relating to such underwriting
activities.
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
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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.
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The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of UBS Securities' 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,
PIMCO ADVISORS FUND
MANAGEMENT LLC
By: ___________________________
Name:
Title
Accepted and agreed to as of
the date first above written:
UBS SECURITIES LLC
By _________________________________
Name: Xxxxx Xxxxxxxx
Title: Managing Director
By _______________________________
Name: Xxxx X. Reit
Title: Executive Director
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