ADDITIONAL COMPENSATION AGREEMENT
Exhibit (h)(2)
ADDITIONAL
COMPENSATION AGREEMENT (the “Agreement”), dated as of July
[ ], 2005, between
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and AIG
SunAmerica Asset Management Corp. (“SAAMCo”).
WHEREAS, SunAmerica Focused Alpha Growth Fund, Inc. (including any successor by merger or
otherwise, the “Fund”) is a non-diversified, closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the “1940 Act”), and its shares of common
stock are registered under the Securities Act of 1933, as amended;
WHEREAS, SAAMCo is the investment adviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of the Fund’s common
stock;
WHEREAS, SAAMCo desires to provide additional compensation to Xxxxxxx Xxxxx for acting as lead
underwriter in an offering of the Fund’s common stock; and
WHEREAS, SAAMCo desires to retain Xxxxxxx Xxxxx to provide after-market support services
designed to maintain the visibility of the Fund on an ongoing basis, and Xxxxxxx Xxxxx 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. | (a) | SAAMCo hereby employs Xxxxxxx Xxxxx, for the period and on the terms and conditions set forth herein, to provide the following services at the reasonable request of SAAMCo: |
(1) | after-market support services designed to maintain the visibility of the Fund on an ongoing basis; | ||
(2) | relevant information, studies or reports regarding general trends in the closed-end investment company and asset management industries, if reasonably obtainable, and consult with representatives of SAAMCo in connection therewith; and | ||
(3) | information to and consult with SAAMCo with respect to applicable strategies designed to address market value discounts, if any. |
(b) | At the request of SAAMCo, Xxxxxxx Xxxxx shall limit or cease any action or service provided hereunder to the extent and for the time period requested by SAAMCo; provided, however, that pending termination of this Agreement as provided for in Section 6 hereof, any such limitation or cessation shall not relieve SAAMCo of its payment obligations pursuant to Section 2 hereof. | ||
(c) | Xxxxxxx Xxxxx will promptly notify SAAMCo if it learns of any material inaccuracy or misstatement in, or material omission from, any written information, as of the date such information was published, provided by Xxxxxxx Xxxxx to SAAMCo in connection with the performance of services by Xxxxxxx Xxxxx under this Agreement. |
2. | SAAMCo shall pay Xxxxxxx Xxxxx a fee computed weekly and payable quarterly in arrears commencing [ ], 2005 at an annualized rate of .15% of the Fund’s average daily total |
assets (including any assets attributable to any preferred shares that may be outstanding or otherwise attributable to the use of leverage) for a term as described in Section 6 hereof; provided that the sum total amount of the fee hereunder shall not exceed [ ]% of the total price to the public of the Fund’s common stock offered by the prospectus dated July [ ], 2005 (the “Prospectus”) (including all Initial Securities and Option Securities as such terms are described in the Purchase Agreement, dated July [ ], 2005, by and among the Fund, SAAMCo and each of the Underwriters named therein (the “Purchase Agreement”)). The sum total of this fee, [any additional compensation fees payable to [other underwriter]], plus the amount of the expense reimbursement of $[ ] per common stock payable by the Fund to the underwriters pursuant to the Purchase Agreement shall not exceed 4.5% of the total price of the Fund’s common stock offered by the Prospectus. All quarterly fees payable hereunder shall be paid to Xxxxxxx Xxxxx within 30 days following the end of each calendar quarter. |
3. | SAAMCo shall be permitted to discharge all or a portion of its payment obligations hereunder upon prepayment in full or in part of the remaining balance due of the maximum additional compensation amount described in paragraph 2 above. | |
4. | SAAMCo acknowledges that the services of Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx, and Xxxxxxx Xxxxx 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. | |
5. | Nothing herein shall be construed as prohibiting Xxxxxxx Xxxxx or its affiliates from providing similar or other services to any other clients (including other registered investment companies or other investment advisers), so long as Xxxxxxx Xxxxx’x services to SAAMCo are not impaired thereby. | |
6. | The term of this Agreement shall commence upon the date referred to above and shall be in effect so long as SAAMCo acts as the investment adviser to the Fund pursuant to the Investment Advisory Agreement (as such term is defined in the Purchase Agreement) or other subsequent advisory agreement. | |
7. | SAAMCo will xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx Xxxxx believes appropriate to its assignment hereunder (all such information so furnished being the “Information”). SAAMCo recognizes and confirms that Xxxxxxx Xxxxx (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 SAAMCo’s knowledge, the Information to be furnished by SAAMCo 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. SAAMCo will promptly notify Xxxxxxx Xxxxx if it learns of any material inaccuracy or misstatement in, or material omission from, any Information delivered to Xxxxxxx Xxxxx. | |
8. | SAAMCo agrees that Xxxxxxx Xxxxx shall have no liability to SAAMCo or the Fund for any act or omission to act by Xxxxxxx Xxxxx in the course of its performance under this Agreement, in the |
2
absence of gross negligence or willful misconduct on the part of Xxxxxxx Xxxxx. SAAMCo 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 and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement (“Claim”) shall be governed by and construed in accordance with the laws of the State of New York. | |
10. | 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 SAAMCo and Xxxxxxx Xxxxx consent to the jurisdiction of such courts and personal service with respect thereto. Each of Xxxxxxx Xxxxx and SAAMCo waives all right to trial by jury in any proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. SAAMCo agrees that a final judgment in any proceeding or counterclaim brought in any such court shall be conclusive and binding upon SAAMCo and may be enforced in any other courts to the jurisdiction of which SAAMCo is or may be subject, by suit upon such judgment. | |
11. | 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 Xxxxxxx Xxxxx and SAAMCo. | |
13. | All notices required or permitted to be sent under this Agreement shall be sent, if to SAAMCo: |
AIG SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxx
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxx
With a copy to:
AIG SunAmerica Asset Management Corp.
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Xxxxxx
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxx
Attention: Xxx Xxx
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 US 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 executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. |
[signatures on following page]
4
IN WITNESS WHEREOF, the parties hereto have duly executed this Additional Compensation
Agreement as of the date first above written.
AIG SUNAMERICA ASSET MANAGEMENT CORP. | XXXXXXX XXXXX & CO. | |||||
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX | ||||||
INCORPORATED | ||||||
By:
|
By: | |||||
Name: | Name: | |||||
Title: | Title: |
5
Xxxxxxx Xxxxx & Co. Indemnification Agreement
July [ ], 2005
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated (“Xxxxxxx Xxxxx”) to advise and assist the undersigned (together with its
affiliates and subsidiaries, referred to as the “Company”) with the matters set forth in the
Additional Compensation Agreement dated July [ ], 2005 between the Company and Xxxxxxx Xxxxx (the
“Agreement”), in the event that Xxxxxxx Xxxxx 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, the Company agrees to indemnify, defend and hold Xxxxxxx Xxxxx
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, 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 Xxxxxxx
Xxxxx. In addition, in the event that Xxxxxxx Xxxxx 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, the Company will reimburse Xxxxxxx Xxxxx
for its legal and other expenses (including the cost of any investigation and preparation) as such
expenses are incurred by Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx, 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 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 Xxxxxxx Xxxxx has been retained to perform financial services bears to the
fees paid to Xxxxxxx Xxxxx under the Agreement; provided, that in no event shall the Company
contribute less than the amount necessary to assure that Xxxxxxx Xxxxx is not liable for losses,
claims, damages, liabilities and expenses in excess of the amount of fees actually received by
Xxxxxxx Xxxxx pursuant to the Agreement. Relative fault shall be determined by reference to, among
other
6
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 Xxxxxxx Xxxxx, on the other hand. The Company will not settle any
Proceeding in respect of which indemnity may be sought hereunder, whether or not Xxxxxxx Xxxxx is
an actual or potential party to such Proceeding, without Xxxxxxx Xxxxx’x prior written consent.
For purposes of this Indemnification Agreement, Xxxxxxx Xxxxx shall include Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, any of its affiliates, each other person, if
any, controlling Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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 Xxxxxxx
Xxxxx’x 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 Xxxxxxx Xxxxx 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 XXXXXXX XXXXX
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 ANY THIRD PARTY AGAINST XXXXXXX XXXXX
OR ANY INDEMNIFIED PARTY. EACH OF XXXXXXX XXXXX 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.
7
The foregoing Indemnification Agreement shall remain in full force and effect notwithstanding
any termination of Xxxxxxx Xxxxx’x 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, AIG SUNAMERICA ASSET MANAGEMENT CORP. |
||||
By: | ||||
Name: | ||||
Title: | ||||
Accepted and agreed to as of
the date first above written:
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By |
||||
Name: | ||||
Title: |
8