ADDITIONAL COMPENSATION AGREEMENT
Exhibit h.4
ADDITIONAL COMPENSATION AGREEMENT
[ ], 2005
Allianz Global Investors Fund Management LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated the date hereof (the “Underwriting Agreement”), by and among Xxxxxxxx-Xxxxxxxxx International & Premium Strategy Fund, a closed-end management investment company (the “Fund”), Allianz Global Investors Fund Management LLC (“Allianz” or the “Investment Manager”) 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 $0.00001 per share (the “Common Shares”), as described therein. Reference is also made to (i) the Investment Management Agreement, dated [ ], 2005 (the “Investment Management Agreement”) between Allianz 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.
Allianz 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 Allianz to each of the Qualifying Underwriters. Allianz 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, in the aggregate to all Qualifying Underwriters, shall not exceed an amount equal to 0.10% per annum of the aggregate average daily total managed assets of the Fund; and provided, further, that such payments shall not exceed the “Maximum Additional Compensation Amount” (as defined in Section 4 hereof). “Total managed assets” means the total assets of the Fund (including assets attributable to any preferred shares and borrowings of the Fund that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). 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 UBS Securities LLC) which sells Common Shares of the Fund with an aggregate purchase price to the public of at least $50,000,000 shall be a “Qualifying Underwriter”; provided, however, that the amount required to qualify as a Qualifying Underwriter may be reduced with respect to any Underwriter in the sole discretion of Allianz (upon consultation with the lead manager of the Underwriters). Within 60 days following the Closing Date, the Qualifying Underwriters shall prepare or cause to be
prepared and provide to Allianz 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 subject to verification by Allianz.
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 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) Allianz shall pay the Additional Compensation, quarterly in arrears, to each 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 total managed assets of the Fund for such quarter.
(b) All fees 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, Allianz shall deliver to each Qualifying Underwriter receiving an installment of Additional Compensation a statement indicating the amount of the aggregate average daily total managed assets of the Fund for such quarter (including assets attributable to any preferred shares or other financial leverage of the Fund that may be outstanding) on which such payment was based.
(c) 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 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 fees payable hereunder shall be in addition to any fees paid by the Investment Manager pursuant to the Underwriting Agreement.
SECTION 4. Maximum Additional Compensation Amount. The “Maximum Additional Compensation Amount” payable by the Investment Manager hereunder shall be [ ]% of the aggregate offering price of the Common Shares. [ ] will receive additional compensation which will not exceed [ ]% of the aggregate initial offering price of the Common Shares, [ ] will receive additional compensation which will not exceed [ ]% of the aggregate initial offering price of the Common Shares and [ ] will receive additional compensation which will not exceed [ ]% of the aggregate initial offering price of the Common Shares. The Maximum Additional
Compensation Amount payable by the Investment Manager to all Qualifying Underwriters hereunder, when taken together with the sales load and other underwriting compensation in connection with this offering, will not exceed the maximum compensation allowed under the conduct rules of the NASD, Inc. (which the Investment Manager and the Underwriters understand to be 9.00% of the aggregate initial offering price of the Common Shares).
SECTION 5. Term. This Additional Compensation Agreement shall continue coterminously with and so long as the Investment Management Agreement, dated [ ], 2005, remains in effect between the Fund and Allianz, or any similar investment management agreement with a successor in interest or affiliate of Allianz remains in effect, as, and to the extent, that such investment management 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) the aggregate payment by Allianz to all Qualifying Underwriters of the Maximum Additional Compensation Amount, (b) the dissolution and winding up of the Fund and (c) the date on which the Investment Management Agreement or other investment management agreement between the Fund and Allianz or any successor in interest to Allianz, including but not limited to an affiliate of Allianz, shall terminate.
SECTION 6. Not an Investment Adviser. Allianz acknowledges that the 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 Underwriter, and the 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 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. Allianz agrees that no Underwriter shall have liability to Allianz or the Fund for any act or omission to act by such 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 Underwriter. Allianz agrees to indemnify and hold harmless each Underwriter and its respective officers, directors, agents and employees against any loss or expense arising out of or in connection with such Underwriter’s performance under this Additional Compensation Agreement. Notwithstanding the foregoing or anything to the contrary in this Additional Compensation Agreement, the Investment Manager’s indemnification obligations shall not apply to any losses, claims, damages, liabilities, fines or expenses (including legal expenses) arising out of or relating to limitations on or the reasonableness or characterization of the compensation payable by the Investment Manager to any Underwriter or to the Underwriters in the aggregate under this Agreement, including as a result of any violation of applicable rules of the National Association of Securities Dealers, Inc. or other applicable law. 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.
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 Allianz and the Qualifying Underwriters in accordance with its terms.
| Very truly yours, | ||
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| CONFIRMED AND ACCEPTED, | ||
| as of the date first above written: | ||
| ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC | ||
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SCHEDULE A
| Name of Qualifying Underwriter |
Aggregate Purchase Price to Public of Common Shares Sold |
Pro Rata Percentage | ||
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