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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 California 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:
i. 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
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and reports shall include: (i) statistical and financial market information with
respect 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.
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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.
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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 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:
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Xxxxx Xxxxx Corporation
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: _____________________________
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Name:
Title:
PAINEWEBBER INCORPORATED
By: _____________________________
Name:
Title:
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Investment Banking Division
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
000-000-0000
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
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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
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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.
