EXHIBIT k.3
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of March
[_], 2003, between PIMCO Advisors Fund Management LLC ("PIMCO Advisors") and UBS
Warburg LLC ("UBS Warburg").
WHEREAS, Xxxxxxxx-Xxxxxxxxx Convertible & Income Fund (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 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. PIMCO Advisors 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 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 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 Warburg
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 is Section 5 hereof,
any such limitation or cessation shall not relieve PIMCO Advisors of its payment
obligations pursuant to Section 2 hereof.
(f) UBS Warburg will promptly notify PIMCO Advisors 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 PIMCO Advisors or the Fund in connection with the performance of
services by UBS Warburg under this Agreement.
2. PIMCO Advisors will pay UBS Warburg 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 that may be outstanding) minus accrued liabilities (other than
liabilities representing leverage).
3. PIMCO Advisors 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 PIMCO Advisors and the Fund 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; 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 Warburg pursuant to Section 1(f) of this agreement shall 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. PIMCO Advisors will furnish UBS Warburg with such information as
UBS Warburg reasonably believes appropriate to its assignment hereunder (all
such information so furnished being the "Information"). PIMCO Advisors
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 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 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 PIMCO Advisors 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 or any
other third party in connection with its engagement hereunder, all of which are
hereby expressly waived.
8. PIMCO Advisors agrees that UBS Warburg shall have no liability to
PIMCO Advisors 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 gross
negligence or willful misconduct on the part of UBS Warburg. 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 arising out or relating to the
characterization of the compensation payable by PIMCO Advisors to UBS Warburg
under this Agreement or to the characterization of UBS Warburg's payment of
compensation to third parties in connection with its or their activities on
behalf of the Fund, including with respect to the characterization of such
compensation under applicable rules of the National Association of Securities
Dealers, Inc.
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 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. PIMCO
ADVISORS 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 PIMCO ADVISORS 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 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 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. 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 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 Xxxxxxxxx
or if to UBS Warburg:
UBS Warburg 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 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.
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 WARBURG LLC
By: _____________________________
Name: Xxxxx Xxxxxxxx
Title: Managing Director
By: _____________________________
Name: Xxxx X. Reit
Title: Executive Director
UBS Warburg LLC Indemnification Agreement
March [ ], 2003
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 (the "Company") with the matters set forth in
the Agreement dated , 2003 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 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 reasonable 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, 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, 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 Warburg has been
retained to perform services bears to the fees paid to UBS Warburg 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
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. Promptly after UBS Warburg receives notice of the
commencement of any action or other proceeding in respect of which
indemnification or reimbursement may be sought hereunder, UBS Warburg 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
Warburg, the Company shall, upon written notice given reasonably promptly
following UBS Warburg's 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 us and reasonably satisfactory to UBS Warburg; provided, however, that
UBS Warburg 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 Warburg, 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 Warburg's engagement under the Agreement unless
such settlement, compromise or consent includes an unconditional release of UBS
Warburg from all liability arising or that may arise out of such claim, action
or proceeding. 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 any such 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
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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 WARBURG 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 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.
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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,
PIMCO ADVISORS FUND
MANAGEMENT LLC
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
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