Exhibit (K)(4)
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of November
29, 2002, between Xxxxx Xxxxx Management ("Xxxxx Xxxxx") and UBS Warburg LLC
("UBS Warburg").
WHEREAS, Xxxxx Xxxxx Insured California Municipal Bond Fund II (the
"Fund") 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 Fund; and
WHEREAS, Xxxxx Xxxxx desires to retain UBS Warburg to provide shareholder
servicing and market information with respect to the Fund, and UBS Warburg 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 Warburg, 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 Xxxxx Xxxxx or the Fund, provide certain economic
research and statistical information and reports, if reasonably
obtainable, on behalf of 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;
(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 Warburg 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
is Section 5 hereof, any such limitation or cessation shall not
relieve Xxxxx Xxxxx of its payment obligations pursuant to Section 2
hereof; and
(f) UBS Warburg 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 Warburg to Xxxxx Xxxxx or the Fund in connection with the
performance of services by UBS Warburg under this Agreement.
2. Xxxxx Xxxxx will pay UBS Warburg a fee computed weekly and payable
quarterly at an annualized rate of 0.10% of the average weekly gross
assets of the Fund; provided, however, that the fee payable hereunder by
Xxxxx Xxxxx to UBS Warburg 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.
2
3. Xxxxx Xxxxx acknowledges that the shareholder services of UBS Warburg
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 Warburg, and UBS Warburg 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 Warburg 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 Warburg's services to Xxxxx Xxxxx and the Fund
are not impaired thereby.
5. The term of this Agreement shall commence upon the date referred to above
and will continue coterminously with and so long as the Investment
Advisory Agreement, dated October 21, 2002, remains in effect between the
Fund and Xxxxx Xxxxx or any successor in interest or affiliate of Xxxxx
Xxxxx, as, and to the extent, that such Investment Advisory Agreement is
renewed periodically in accordance with the 1940 Act.
6. Xxxxx Xxxxx will furnish UBS Warburg with such information as UBS Warburg
believes appropriate to its assignment hereunder (all such information so
furnished being the "Information"). Xxxxx Xxxxx recognizes and confirms
that UBS Warburg (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 UBS
Warburg if it learns of any material inaccuracy or misstatement in, or
material omission from, any Information delivered to UBS Warburg.
7. It is understood that UBS Warburg is being engaged hereunder solely to
provide the services described above to Xxxxx Xxxxx and to the Fund and
that UBS Warburg 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,
the current or future shareholders of the Fund or any other third party in
3
connection with its engagement hereunder, all of which are hereby
expressly waived.
8. Xxxxx Xxxxx agrees that UBS Warburg shall have no liability to Xxxxx Xxxxx
or the Fund for any act or omission to act by UBS Warburg 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 Warburg. 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 THE XXXXX XXXXX AND UBS WARBURG AGREE THAT ANY ACTION OR
PROCEEDING BASED HEREON, OR ARISING OUT OF UBS WARBURG'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 UBS WARBURG 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
WARBURG 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 Warburg 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.
4
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 Warburg 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 Warburg:
UBS Warburg 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
5
of the Trustees or beneficiaries individually but are binding only upon
the assets and properties of Xxxxx Xxxxx.
6
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 WARBURG LLC
By: _______________________
Name: Xxxxx Xxxxxxxx
Title: Managing Director
By: ______________________
Name: Xxxx X. Reit
Title: Executive Director
7
UBS Warburg LLC Indemnification Agreement
November 29, 2002
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
In connection with the engagement of UBS Warburg LLC ("UBS Warburg") to
advise and assist the undersigned (together with its affiliates and
subsidiaries, referred to as the "Company") with the matters set forth in the
Agreement dated November 29, 2002 between the Company and UBS Warburg (the
"Agreement"), in the event that UBS Warburg 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 to
indemnify, defend and hold UBS Warburg 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 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 or willful
misconduct of UBS Warburg. In addition, in the event that UBS Warburg 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 reimburse
UBS Warburg for its legal and other expenses (including the cost of any
investigation and preparation) as such expenses are incurred by UBS Warburg 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 and affiliates and other constituencies, on the one hand, and UBS
Warburg, 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 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 stockholders and affiliates, on
the one hand, and the party entitled to contribution, on the other hand, of a
transaction as contemplated shall be
8
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 stockholders 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 UBS
Warburg has been retained to perform financial services bears to the fees paid
to UBS Warburg under the Agreement; provided, that in no event shall the Company
contribute less than the amount necessary to assure that UBS Warburg is not
liable for losses, claims, damages, liabilities and expenses in excess of the
amount of fees actually received by UBS Warburg 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 Warburg, on the other
hand. The Company will not settle any Proceeding in respect of which indemnity
may be sought hereunder, whether or not UBS Warburg is an actual or potential
party to such Proceeding, without UBS Warburg's prior written consent. For
purposes of this Indemnification Agreement, UBS Warburg shall include UBS
Warburg LLC, any of its affiliates, each other person, if any, controlling UBS
Warburg 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 Warburg 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 Warburg's 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 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 or willful misconduct of UBS Warburg in performing the services that
are the subject of the Agreement.
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 WARBURG CONSENT TO THE JURISDICTION OF SUCH COURTS AND
PERSONAL SERVICE WITH RESPECT THERETO. THE
9
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 WARBURG OR ANY INDEMNIFIED PARTY. EACH OF
UBS WARBURG 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 Warburg'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 WARBURG LLC
By: ___________________________
Name: Xxxxx Xxxxxxxx
Title: Managing Director
By: ___________________________
Name: Xxxx X. Reit
Title: Executive Director
10
