AMENDMENT NO. 1 TO ADMINISTRATION
SERVICES AGREEMENT
This Amendment
No. 1 dated June 6, 2008 is made to the Administration
Services Agreement dated as of February 27, 2007 (the
“Agreement”) by and between HIGHLAND CAPITAL
MANAGEMENT, L.P., a Delaware limited partnership
(“Highland”), and HIGHLAND DISTRESSED OPPORTUNITIES,
INC., a Delaware corporation (the
“Company”).
WHEREAS, Highland
provides administration services to the Company pursuant to the
Agreement; and
WHEREAS, Highland
and the Company desire to amend the Agreement to set forth in more
detail the administration services that Highland has been providing
and will continue to provide to the Company; and
WHEREAS,
Section 17 of the Agreement provides that the Agreement may be
changed by a written amendment;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein
contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
Section 14 of
the Agreement is hereby amended and restated in its entirety,
effective as of the date hereof, as follows:
14.
Description of Administration Services on a Continuous Basis
. Highland will perform the following administration
services:
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(i)
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Prepare monthly security
transaction listings;
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(ii)
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Supply various normal and customary
portfolio and Company statistical data as requested on an ongoing
basis;
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(iii)
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Prepare for execution and file the
Company’s Federal and state tax returns: prepare a fiscal tax
provision in coordination with the annual audit; prepare an excise
tax provision; and prepare all relevant 1099
calculations;
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(iv)
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Coordinate contractual
relationships and communications between the Company and its
contractual service providers;
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(v)
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Coordinate printing of the
Company’s annual shareholder reports;
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(vi)
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Prepare income and capital gain
distributions;
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(vii)
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Prepare the semiannual and annual
financial statements;
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(viii)
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Monitor the Company’s
compliance with IRC, SEC and prospectus requirements;
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(ix)
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Prepare, coordinate with the
Company’s counsel and coordinate the filing with the SEC:
semi-annual reports on Form N-SAR and Form N-CSR; Form N-Q; and
Form N-PX based upon information provided by the Company; assist in
the preparation of Forms 3, 4 and 5 pursuant to Section 16 of
the 1934 Act and Section 30(h) of the 1940 Act for the officers and
directors of the Company, such filings to be based on information
provided by those persons;
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(x)
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Assist in the preparation of
notices of meetings of shareholders, coordinate preparation of
proxy statements, including obtaining information required to be
disclosed by applicable regulations and the engagement of proxy
solicitors on behalf of the Company;
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(xi)
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Assist in obtaining the fidelity
bond and directors’ and officers’/errors and omissions
insurance policies for the Company in accordance with the
requirements of Rule 17g-1 and 17d-1(d)(7) under the 1940 Act,
including evaluation of insurance carriers, recommending
appropriate coverage levels and evaluating the costs thereof, as
such bond and policies are approved by the Company’s Board of
Directors;
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(xii)
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Monitor the Company’s assets
to assure adequate fidelity bond coverage is maintained;
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(xiii)
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Draft agendas and resolutions for
quarterly and special board meetings;
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(xiv)
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Coordinate the preparation,
assembly and mailing of board materials;
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(xv)
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Attend board meetings and draft
minutes thereof;
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(xvi)
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Maintain the Company’s
corporate calendar to assure compliance with various filing and
board approval deadlines;
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(xvii)
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Assist the Company in the handling
of SEC examinations and responses thereto;
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(xviii)
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If the chief executive officer or
chief financial officer of the Company is required to provide a
certification as part of the Trust’s Form 10-Q or Form 10-K
filing pursuant to regulations promulgated by the SEC under
Section 302 of the Sarbanes-Oxley Act of 2002, Highland will
provide (to such pe
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