ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of October
31, 2003, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Fund Asset Management, L.P. (the "Investment
Adviser").
WHEREAS, Floating Rate Income Strategies Fund, Inc. (including any
successor by merger or otherwise, the "Fund") is a newly organized, 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, par
value $.10 per share ("Common Stock") are registered under the Securities Act of
1933, as amended; and
WHEREAS, the Investment Adviser is the investment adviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of the
Common Stock;
WHEREAS, the Investment Adviser desires to provide additional compensation
to Xxxxxxx Xxxxx for acting as lead underwriter in an offering of the Common
Stock; and
WHEREAS, the Investment Adviser 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) The Investment Adviser 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 the Investment Adviser:
(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 the Investment Adviser in connection
therewith; and
(3) information to and consult with the Investment Adviser with
respect to applicable strategies designed to address market value
discounts, if any.
(b) At the request of the Investment Adviser, Xxxxxxx Xxxxx shall limit or
cease any action or service provided hereunder to the extent and for
the time period requested by the Investment Adviser; provided,
however, that pending termination of this Agreement as provided for in
Section 5 hereof, any such limitation or cessation shall not relieve
the Investment Adviser of its payment obligations pursuant to Section
2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify the Investment Adviser 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 the Investment Adviser in
connection with the performance of services by Xxxxxxx Xxxxx under
this Agreement.
2. The Investment Adviser shall pay Xxxxxxx Xxxxx a fee computed weekly and
payable quarterly in arrears commencing [ ], 2003 at an annualized
rate of .15% of the Fund's average daily net assets (including any assets
attributable to any preferred stock that may be outstanding), as defined in
the Fund's prospectus dated October 28, 2003 (the "Prospectus"), plus the
proceeds of any outstanding borrowings used for leverage for a term as
described in Section 5 hereof; provided that the sum total amount of the
fee hereunder shall not exceed 4.46665% of the total price (including all
Initial Securities and Option Securities as such terms are described in the
Purchase Agreement, dated October 28, 2003, by and among the Fund, the
Investment Adviser and each of the underwriters named therein (the
"Purchase Agreement")) to the public of the Common Stock offered by the
Prospectus. All quarterly fees payable hereunder shall be paid to Xxxxxxx
Xxxxx within 15 days following the end of each calendar quarter.
3. The Investment Adviser 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.
4. 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
managers), so long as Xxxxxxx Xxxxx'x services to the Investment Adviser
are not impaired thereby.
5. The term of this Agreement shall commence upon the date referred to above
and shall be in effect so long as the Investment Adviser acts as the
investment manager to the Fund pursuant to the Advisory Agreement (as such
term is defined in the Purchase Agreement) or other subsequent advisory
agreement.
6. The Investment Adviser will xxxxxxx Xxxxxxx Xxxxx with such information as
Xxxxxxx Xxxxx believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). The Investment Adviser
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 the Investment Adviser's knowledge, the
Information to be furnished by the Investment Adviser 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. The Investment
Adviser 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.
7. It is understood that Xxxxxxx Xxxxx is being engaged hereunder solely to
provide the services described above to the Investment Adviser and that
Xxxxxxx Xxxxx is not acting as an agent or fiduciary of, and shall have no
duties or liability to the current or future shareholders of the Fund or
any other third party in connection with its engagement hereunder, all of
which are hereby expressly waived.
2
8. The Investment Adviser agrees that Xxxxxxx Xxxxx shall have no liability to
the Investment Adviser or the Fund for any act or omission to act by
Xxxxxxx Xxxxx in the course of its performance under this Agreement, in the
absence of gross negligence or willful misconduct on the part of Xxxxxxx
Xxxxx.
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 the Investment Adviser and Xxxxxxx Xxxxx
consent to the jurisdiction of such courts and personal service with
respect thereto. Each of Xxxxxxx Xxxxx and the Investment Adviser 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.
The Investment Adviser agrees that a final judgment in any proceeding or
counterclaim brought in any such court shall be conclusive and binding upon
the Investment Adviser and may be enforced in any other courts to the
jurisdiction of which the Investment Adviser 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 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 the
Investment Adviser.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to the Investment Adviser:
Fund Asset Management, L.P.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Xx., President
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Debt and Equity New Issues
4 World Financial Center
New York, New York 10080
Attention: Xxxx Xxxx
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.
3
IN WITHESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
FUND ASSET MANAGEMENT, X.X. XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: PRINCETON SERVICES, INC.
General Partner
By: _____________________________ By: _____________________________
Name: Name:
Title: Title:
4
