EXHIBIT k.3
ADDITIONAL COMPENSATION AGREEMENT
May 28, 2002
XXXXXXX XXXXX XXXXXX INC.
[Other Qualifying Underwriters]
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
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 AIM Select Real Estate Income Fund,
a Delaware business trust (the "Trust"), A I M Advisors, Inc., a Delaware
corporation (the "Adviser"), INVESCO Institutional (N.A.), Inc., a Delaware
corporation, and each of the Underwriters named therein, with respect to the
issue and sale of the Trust's Common Shares, as described therein. Reference is
also made to (i) the Master Investment Advisory Agreement (the "Investment
Advisory Agreement") to be entered into between the Adviser and the Trust and
(ii) the registration statement on Form N-2 regarding the Common Shares of the
Trust (the "Registration Statement"). Capitalized terms used herein and not
otherwise defined shall have the meanings given to them in the Underwriting
Agreement.
The Adviser hereby confirms its agreement with Xxxxxxx Xxxxx Xxxxxx
Inc. ("Xxxxxxx Xxxxx Barney") and 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 the Adviser to
Xxxxxxx Xxxxx Xxxxxx and each of the Qualifying Underwriters. The Adviser agrees
to pay to Xxxxxxx Xxxxx Barney and the Qualifying Underwriters additional
compensation (collectively, the "Additional Compensation") at an aggregate rate
of 0.10% per annum of the Trust's aggregate Managed Assets (as defined in
Section 3(b) hereof); provided, however, that such payments shall not, in the
aggregate, 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 which sells Common Shares of the Trust
with an aggregate purchase price to the public of at least $50,000,000 (which
amount shall equal the aggregate of the value of any Firm Shares and Option
Shares sold by such Underwriter) shall be a "Qualifying Underwriter"; provided,
however, that Xxxxxxx Xxxxx Xxxxxx shall not be included in the term "Qualifying
Underwriter." Within 60 days following the Closing Date, Xxxxxxx Xxxxx Barney
shall prepare and provide to the Adviser a chart listing each of the Qualifying
Underwriters, which chart shall indicate the number of Common Shares sold by
each Qualifying Underwriter, the Pro Rata Percentage (as defined in Section 2
hereof) of each
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Qualifying Underwriter and the Remaining Pro Rata Percentage (as defined in
Section 3(a)(ii) hereof) and shall be appended as Schedule A to this Additional
Compensation Agreement.
SECTION 2. Pro Rata Percentage. Each Underwriter shall be assigned a
"Pro Rata Percentage," the numerator of which shall equal the number of Common
Shares sold by such Underwriter (including any Firm Shares and Option Shares
sold by such Underwriter) and the denominator of which shall equal the aggregate
number of Common Shares (including all Firm Shares and Option Shares) purchased
by the Underwriters pursuant to the Underwriting Agreement.
SECTION 3. Payment of Additional Compensation. (a) The Adviser shall
pay the Additional Compensation at the end of each calendar quarter in arrears
as follows:
(i) To each Qualifying Underwriter, Additional Compensation in an
amount equal to the product of such Qualifying Underwriter's Pro Rata
Percentage multiplied by 0.025% of the Trust's Managed Assets for such
quarter.
(ii) To Xxxxxxx Xxxxx Xxxxxx, Additional Compensation in an amount
equal to the sum of (A) the product of Xxxxxxx Xxxxx Barney's Pro Rata
Percentage multiplied by 0.025% of the Trust's Managed Assets for such
quarter; and (B) the product of the "Remaining Pro Rata Percentage"
multiplied by 0.025% of the Trust's Managed Assets for such quarter. For
the purposes of this clause (ii), the "Remaining Pro Rata Percentage" shall
equal the sum of the Pro Rata Percentages of each Underwriter that is not
Xxxxxxx Xxxxx Xxxxxx or a Qualifying Underwriter.
(b) For the purposes of this Section, "Managed Assets" has the meaning
set forth in the prospectus forming a part of the Registration Statement.
(c) All Additional Compensation payable hereunder shall be paid to
Xxxxxxx Xxxxx Barney and each Qualifying Underwriter, respectively, by wire
transfer of immediately available funds within 15 days following the end of each
calendar quarter to a bank account designated by Xxxxxxx Xxxxx Xxxxxx or such
Qualifying Underwriter, respectively. At the time of each payment of Additional
Compensation hereunder, the Adviser shall deliver to Xxxxxxx Xxxxx Barney and
each Qualifying Underwriter receiving an installment of Additional Compensation
a statement indicating the amount of Managed Assets on which such payment was
based.
(d) The initial payments of Additional Compensation hereunder shall be
with respect to the calendar quarter ending June 30, 2002, prorated to the
initial offering date. 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 Additional Compensation payable hereunder shall
be in addition to any fees paid by the Adviser pursuant to the Underwriting
Agreement.
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(e) The Adviser 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. In the
event of a prepayment in full, the amount to be paid shall equal the difference
between (i) the Maximum Additional Compensation Amount and (ii) the sum of the
quarterly payments and any partial prepayments previously made hereunder. Any
prepayment of the Maximum Additional Compensation Amount shall be permitted only
at the end of a calendar quarter, immediately following the payment of the
Additional Compensation for such calendar quarter. Any partial prepayment of the
Maximum Additional Compensation Amount shall be in an amount equal to or greater
than the lesser of (i) $1,000,000 or (ii) the remaining balance due of the
Maximum Additional Compensation Amount, if less than $1,000,000.
SECTION 4. Maximum Additional Compensation Amount. The "Maximum
Additional Compensation Amount" payable by the Adviser hereunder shall be the
excess of (i) four and one-half percent (4.5%) of the aggregate initial public
offering price for the Common Shares purchased pursuant to the Underwriting
Agreement (including all Firm Shares and Option Shares) over (ii) $9,500 (which
represents the amount payable by the Trust to counsel for the Underwriters
pursuant to the Underwriting Agreement).
SECTION 5. Term. This Additional Compensation Agreement shall terminate
on the earliest to occur of: (a) the payment by the Adviser hereunder of the
Maximum Additional Compensation Amount; (b) the prepayment in full by the
Adviser of the Maximum Additional Compensation Amount in accordance with Section
3(e) hereof; (c) the dissolution and winding up of the Trust; (d) if the Trust
should convert into an open-end management investment company, the latter of the
date of such conversion and five years from the date of this Additional
Compensation Agreement; and (e) the date on which the Investment Advisory
Agreement or other advisory agreement between the Trust and the Adviser or any
successor in interest to the Adviser, including but not limited to an affiliate
of the Adviser, shall no longer be in full force and effect.
SECTION 6. Not an Investment Adviser. The Adviser 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 Trust's portfolio. No provision of this 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. Services to Adviser. In exchange for the Additional
Compensation, (i) Xxxxxxx Xxxxx Xxxxxx and each Qualifying Underwriter,
severally and not jointly, agree to provide certain after-market support
services designed to maintain the visibility of the Trust on an ongoing basis
and (ii) Xxxxxxx Xxxxx Barney agrees to (A) provide the Adviser with relevant
information, studies or reports regarding general trends in the closed-end
investment company and asset management industries and (B) at the Adviser's
request, provide
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information to and consult with the Adviser's representatives with respect to
issues regarding utilizing leverage in the Trust.
SECTION 8. 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 managers).
SECTION 9. No Liability. The Adviser agrees that no Underwriter shall
have liability to the Adviser or the Trust 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. This provision shall survive the termination,
expiration or supersession of this Additional Compensation Agreement.
SECTION 10. Assignment. This Additional Compensation Agreement may not
be assigned by any party without the prior written consent of each other party.
SECTION 11. 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 12. Governing Law. This Additional Compensation Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 13. 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
the Underwriters and the Adviser in accordance with its terms.
Very truly yours,
A I M ADVISORS, INC.
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX XXXXXX INC.
By:
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Authorized Signatory
[Other Qualifying Underwriters]
SCHEDULE A
Number of
Common Pro Rata
Name of Qualifying Underwriter Shares Sold Percentage*
------------------------------ ----------- --------
Xxxxxxx Xxxxx Barney Inc.
* Based on a total of _______ shares of Common Shares purchased.
The "Remaining Pro Rata Percentage" equals ________.
