EXHIBIT (k) (6)
FORM
OF
ADDITIONAL COMPENSATION AGREEMENT
April [ ], 2005
Xxxxx Xxxxx Management
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated April [ ],
2005 (the "Underwriting Agreement"), by and among Xxxxx Xxxxx Tax-Managed
Buy-Write Income Fund, a closed-end management investment company (the "Fund"),
Xxxxx Xxxxx Management ("Xxxxx Xxxxx" or the "Investment Adviser"), Parametric
Portfolio Associates LLC, Rampart Investment Management Company, Inc. and each
of the respective Underwriters named therein, with respect to the issue and sale
of the Fund's common shares of beneficial interest, par value $0.01 per share
(the "Common Shares"), as described therein. Reference is also made to (i) the
Investment Advisory Agreement, dated [ ], 2005 (the "Investment Advisory
Agreement") between Xxxxx Xxxxx and the Fund and (ii) the registration statement
on Form N-2 regarding the Common Shares of the Fund (the "Registration
Statement"). Capitalized terms used herein and not otherwise defined shall have
the meanings given to them in the Underwriting Agreement.
Xxxxx Xxxxx hereby confirms its agreement with each Qualifying
Underwriter (as defined in Section 1 hereof) with respect to the additional
compensation referred to in the "Underwriting" section of the Registration
Statement, payable by Xxxxx Xxxxx to each of the Qualifying Underwriters. Xxxxx
Xxxxx agrees to pay to each Qualifying Underwriter additional compensation
(collectively, the "Additional Compensation") as provided for in Section 3
hereof; provided, however, that such Additional Compensation shall not exceed an
amount equal to 0.15% per annum of the aggregate average daily gross assets of
the Fund (including assets attributable to any preferred shares of the Fund and
borrowings used for financial leverage that may be outstanding); and provided,
further, that such payments shall not exceed the "Maximum Additional
Compensation Amount" (as defined in Section 4 hereof). The Additional
Compensation shall be payable as set forth in Section 3 hereof.
Section 1. Qualifying Underwriters. For the purposes of this
Additional Compensation Agreement, each Underwriter (other than Citigroup Global
Markets Inc.) which sells Common Shares of the Fund with an aggregate purchase
price to the public of at least $50,000,000 shall be a "Class I Qualifying
Underwriter" and each Underwriter (other than Citigroup Global Markets Inc.)
which sells Common Shares of the Fund with an aggregate purchase price to the
public of at least $100,000,000 shall be a "Class II Qualifying
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Underwriter;" provided, however, that the amounts required to qualify as a Class
I Qualifying Underwriter or a Class II Qualifying Underwriter may be reduced
with respect to any Underwriter in the sole discretion of Xxxxx Xxxxx. Class I
Qualifying Underwriters and Class II Qualifying Underwriters are referred to
collectively herein as "Qualifying Underwriters." A Qualifying Underwriter which
qualifies as a Class II Qualifying Underwriter shall not also be a Class I
Qualifying Underwriter. Within 60 days following the Closing Date, the
Qualifying Underwriters shall prepare or cause to be prepared and provide to
Xxxxx Xxxxx a chart listing each of the Qualifying Underwriters, which chart
shall indicate the aggregate purchase price to the public of the Common Shares
sold by each Qualifying Underwriter and the Pro Rata Percentage (as defined in
Section 2 hereof) of each Qualifying Underwriter and shall be appended as
Schedule A to this Additional Compensation Agreement. Such Schedule A shall be
prepared in good faith by the Qualifying Underwriters and shall be subject to
verification by Xxxxx Xxxxx.
Section 2. Pro Rata Percentage. Each Qualifying Underwriter shall be
assigned a "Pro Rata Percentage," the numerator of which shall equal the
aggregate purchase price to the public of the Common Shares sold by such
Qualifying Underwriter as set forth on Schedule A hereto and the denominator of
which shall equal the aggregate purchase price to the public of all of the
Common Shares purchased by the Underwriters pursuant to the Underwriting
Agreement.
Section 3. Payment of Additional Compensation.
(a) Xxxxx Xxxxx shall pay the Additional Compensation, quarterly in
arrears, to each Class I Qualifying Underwriter in an amount equal to the
product of such Qualifying Underwriter's Pro Rata Percentage multiplied by
0.0250% of the aggregate average daily gross assets of the Fund (including
assets attributable to any preferred shares of the Fund and borrowings used for
financial leverage that may be outstanding) for such quarter.
(b) Xxxxx Xxxxx shall pay the Additional Compensation, quarterly in
arrears, to each Class II Qualifying Underwriter in an amount equal to the
product of such Qualifying Underwriter's Pro Rata Percentage multiplied by
0.0375% of the aggregate average daily gross assets of the Fund (including
assets attributable to any preferred shares of the Fund and borrowings used for
financial leverage that may be outstanding) for such quarter.
(c) All Additional Compensation payable hereunder shall be paid to
each Qualifying Underwriter by wire transfer of immediately available funds
within 15 days following the end of each calendar quarter to a bank account
designated by such Qualifying Underwriter. At the time of each payment of
Additional Compensation hereunder, Xxxxx Xxxxx shall deliver to each Qualifying
Underwriter receiving an installment of Additional Compensation a statement
indicating the amount of the aggregate average daily gross assets of the Fund
for such quarter (including assets attributable to any preferred shares of the
Fund and borrowings used for financial leverage that may be outstanding) on
which such payment was based.
(d) The initial payments of Additional Compensation hereunder shall
be paid with respect to the calendar quarter ending June 30, 2005. In the event
that this Additional Compensation Agreement terminates prior to the end of a
calendar quarter, the Additional
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Compensation required to be paid hereunder shall be due and payable within 15
days following the termination hereof and shall be pro-rated in respect of the
period prior to such termination. Notwithstanding the foregoing, if any payment
hereunder would otherwise fall on a day which is not a business day, it shall be
due on the next day which is a business day. All Additional Compensation payable
hereunder shall be in addition to any fees paid by the Investment Adviser
pursuant to the Underwriting Agreement.
Section 4. Maximum Additional Compensation Amount. The "Maximum
Additional Compensation Amount" payable by the Investment Adviser hereunder
shall be [ ]% of the aggregate initial price to the public of the Common Shares.
[ ] will receive additional compensation which will not exceed [ ]% of the
aggregate initial price to the public of the Common Shares and [ ] will received
additional compensation which will not exceed [ ]% of the aggregate initial
price to the public of the Common Shares.
Section 5. Term. This Additional Compensation Agreement shall
continue coterminously with and so long as the Investment Advisory Agreement
remains in effect between the Fund and Xxxxx Xxxxx, or any similar investment
advisory agreement with a successor in interest to or affiliate of Xxxxx Xxxxx
remains in effect, as, and to the extent, that such investment advisory
agreement is renewed periodically in accordance with the Investment Company Act
of 1940, as amended. This Additional Compensation Agreement shall terminate on
the earliest to occur of (a) with respect to any Qualifying Underwriter, the
payment by Xxxxx Xxxxx to such Qualifying Underwriter of the Maximum Additional
Compensation Amount, (b) with respect to the Fund, the dissolution and winding
up of the Fund and (c) with respect to the Fund, the date on which the
Investment Advisory Agreement or other investment advisory agreement between the
Fund and Xxxxx Xxxxx or any successor in interest to Xxxxx Xxxxx, including but
not limited to an affiliate of Xxxxx Xxxxx, shall terminate.
Section 6. Not an Investment Adviser. Xxxxx Xxxxx acknowledges that
the Qualifying Underwriters are not providing any advice hereunder as to the
value of securities or regarding the advisability of purchasing or selling any
securities for the Fund. No provision of this Additional Compensation Agreement
shall be considered as creating, nor shall any provision create, any obligation
on the part of any Qualifying Underwriter, and the Qualifying Underwriters are
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.
Section 7. Not Exclusive. Nothing herein shall be construed as
prohibiting any Qualifying Underwriter or its respective affiliates from acting
as such for any other clients (including other registered investment companies
or other investment advisers).
Section 8. No Liability. Xxxxx Xxxxx agrees that no Qualifying
Underwriter shall have liability to Xxxxx Xxxxx or the Fund for any act or
omission to act by such Qualifying Underwriter in the course of its performance
under this Additional Compensation Agreement, in the absence of gross negligence
or willful misconduct on the part of such Qualifying Underwriter. Xxxxx Xxxxx
agrees to indemnify and hold harmless each Qualifying Underwriter and its
respective officers, directors, agents and employees against any loss or expense
arising out of or in connection with such Qualifying Underwriter's performance
under this Additional
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Compensation Agreement. This provision shall survive the termination, expiration
or supersession of this Additional Compensation Agreement.
Section 9. Assignment. This Additional Compensation Agreement may
not be assigned by any party without the prior written consent of each other
party.
Section 10. Amendment; Waiver. No provision of this Additional
Compensation Agreement may be amended or waived except by an instrument in
writing signed by the parties hereto.
Section 11. Governing Law. This Additional Compensation Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York.
Section 12. Counterparts. This Additional Compensation Agreement may
be executed in any number of counterparts, each of which shall be an original,
and all of which, when taken together, shall constitute one agreement. Delivery
of an executed signature page of this Additional Compensation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
Xxxxx Xxxxx and the Qualifying Underwriters in accordance with its terms.
Very truly yours,
[ ]
By: ________________________________
Name:
Title:
[ ]
By: ________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXX XXXXX MANAGEMENT
By: _________________________________
Name:
Title:
SCHEDULE A
AGGREGATE PURCHASE PRICE TO PUBLIC
NAME OF QUALIFYING UNDERWRITER CLASS OF COMMON SHARES SOLD PRO RATA PERCENTAGE
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