SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of
[ ], 2004, between Xxxx Xxxxxxx Advisers, LLC ("Xxxx Xxxxxxx Advisers") and UBS
Securities LLC ("UBS Securities").
WHEREAS, Xxxx Xxxxxxx Tax-Advantaged Dividend 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, Xxxx Xxxxxxx Advisers is the investment adviser of
the Fund; and
WHEREAS, Xxxx Xxxxxxx Advisers 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. Xxxx Xxxxxxx Advisers hereby employs UBS Securities, for the period and on
the terms and conditions set forth herein, to provide the following services
(the "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 Xxxx Xxxxxxx Advisers or the Fund, provide certain
economic research and statistical information and reports, if reasonably
obtainable, on behalf of Xxxx Xxxxxxx Advisers or the Fund and consult with
representatives of Xxxx Xxxxxxx Advisers 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;
provided that, except as legally required or as Xxxx Xxxxxxx Advisers or the
Fund shall reasonably determine to be appropriate to explain to regulatory
authorities or courts any action taken by the Fund or its Board of Trustees,
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; and
(d) At the request of Xxxx Xxxxxxx Advisers or the Fund, provide
information to and consult with Xxxx Xxxxxxx Advisers 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;
provided that, except as legally required or as Xxxx Xxxxxxx Advisers or the
Fund shall reasonably determine to be appropriate to explain to regulatory
authorities or courts any action taken by the Fund or its Board of Trustees,
such information and any recommendations 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.
(e) At the request of Xxxx Xxxxxxx Advisers 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 Xxxx Xxxxxxx Advisers 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 Xxxx Xxxxxxx Advisers
of its payment obligations pursuant to Section 2 hereof.
(f) UBS Securities will promptly notify Xxxx Xxxxxxx Advisers 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
Xxxx Xxxxxxx Advisers or the Fund in connection with the performance of the
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. Xxxx Xxxxxxx Advisers will pay UBS Securities a fee computed weekly and
payable quarterly at an annualized rate of 0.10% of the average daily managed
assets of the Fund. Fees payable hereunder shall be subject to the sales charge
limits of the National Association of Securities Dealers, Inc. and shall not
exceed [ ]% of the aggregate offering price in the initial public offering (the
"Offering") of the common shares of the Fund (the "Maximum Fee Amount").
3. Xxxx Xxxxxxx Advisers 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.
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 Xxxx Xxxxxxx Advisers 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 Xxxx Xxxxxxx Advisers. In addition, nothing
herein shall be construed to constitute UBS Securities as the agent or employee
of Xxxx Xxxxxxx Advisers or Xxxx Xxxxxxx Advisers as the agent or employee of
UBS Securities, and neither party shall make any representation to the contrary.
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 Xxxx Xxxxxxx Advisers or such successor or affiliate
under the Investment Management Agreement is reduced below 0.55%, the fee
payable by Xxxx Xxxxxxx Advisers 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. Xxxx Xxxxxxx Advisers will furnish UBS Securities with such information
regarding Xxxx Xxxxxxx Advisers and the Fund as UBS Securities believes
appropriate to its assignment hereunder (all such information so furnished being
the "Information"). Xxxx Xxxxxxx Advisers 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 Xxxx
Xxxxxxx Advisers 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. Xxxx Xxxxxxx Advisers 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 Xxxx Xxxxxxx Advisers may be proprietary
to Xxxx Xxxxxxx Advisers and hereby agrees that it will not disclose (other than
as may be required by applicable law or regulatory proceeding, or with the prior
written consent of Xxxx Xxxxxxx Advisers) to any third party any Information
provided to UBS Securities by Xxxx Xxxxxxx Advisers and specifically identified
in writing by Xxxx Xxxxxxx Advisers, 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 Xxxx Xxxxxxx Advisers 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,
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. Xxxx Xxxxxxx Advisers agrees that UBS Securities shall have no liability to
Xxxx Xxxxxxx Advisers 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. Xxxx
Xxxxxxx Advisers 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 XXXX XXXXXXX ADVISERS 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. XXXX XXXXXXX
ADVISERS 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 XXXX XXXXXXX ADVISERS 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. Xxxx Xxxxxxx Advisers 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 Xxxx
Xxxxxxx Advisers.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to Xxxx Xxxxxxx Advisers:
Xxxx Xxxxxxx Advisers, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Chief Legal Officer
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 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.
XXXX XXXXXXX ADVISERS, LLC
By: _____________________________
Name:
Title:
UBS SECURITIES LLC
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
UBS Securities LLC Indemnification Agreement
--------------------------------------------
[ ], 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 (the "Services") to the undersigned
(together with its affiliates and subsidiaries, referred to as the "Company")
set forth in the Shareholder Servicing Agreement dated [ ], 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 any matter in any way relating to or referred to in 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 any matter in any way relating to or referred to in
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 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. 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, 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
1
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 Securities has been
retained to perform financial services bears to the fees paid to UBS Securities
under the Agreement; 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' 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
2
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 or willful misconduct
of UBS Securities 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 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.
3
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,
XXXX XXXXXXX ADVISERS, LLC
By:
------------------------
Name:
Title:
Accepted and agreed to as
of the date first above written:
UBS SECURITIES LLC
By
-------------------------------
Name:
Title:
By
-------------------------------
Name:
Title:
4
