ADDITIONAL COMPENSATION AGREEMENT
Exhibit (k)(4)
September [ ], 2007
Xxxx Xxxxxxx Advisers, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated September [ ], 2007 (the “Underwriting
Agreement”), by and among Xxxx Xxxxxxx Tax-Advantaged Global Shareholder Yield Fund, a closed-end
management investment company (the “Fund”), Xxxx Xxxxxxx Advisers, LLC (“XXX” or the “Adviser”),
Epoch Investment Partners, Inc. and Analytic Investors, Inc. (the “Sub-Advisers”) 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 August [ ], 2007
(the “Investment Advisory Agreement”) between the Adviser 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.
The Adviser 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 the Adviser to each of the Qualifying Underwriters. The
Adviser 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 [ ]% per annum of the aggregate
average daily gross assets of the Fund (including assets attributable to any preferred shares of
the Fund 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 UBS Securities LLC and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated), 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
amounts required to qualify as a Qualifying Underwriter may be reduced with respect to any
Underwriter in the sole discretion of the Adviser. Within 60 days following the Closing Date, the
Qualifying Underwriters shall prepare or cause to be prepared and provide to the Adviser 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 the Adviser.
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) The Adviser 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 gross 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 the
bank account designated by such Qualifying Underwriter. At the time of each payment of Additional
Compensation hereunder, the Adviser shall deliver to each Qualifying Underwriter receiving an
installment of Additional Compensation a statement indicating the amount of the aggregate average
daily gross asset value of the Fund for such quarter (including assets attributable to any
preferred shares 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 December 31, 2007. 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 Adviser pursuant to the Underwriting Agreement.
SECTION 4. Maximum Additional Compensation Amount. The “Maximum Additional Compensation
Amount” payable by the Adviser 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.
SECTION 5. Term. This Additional Compensation Agreement shall continue coterminously with
and so long as the Investment Advisory Agreement, dated [ ], 2007, remains in effect between
the Fund and the Adviser, or any similar investment advisory agreement with a successor in interest
or affiliate of the Adviser 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 the Adviser 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 the
Adviser or any successor in interest to the Adviser, including but not limited to an affiliate of
the Adviser, shall terminate.
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 Fund’s portfolio. 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. The Adviser agrees that no Underwriter shall have liability to the
Adviser 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. The Adviser agrees to the terms 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 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. 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
Adviser and each Underwriter consent to the jurisdiction of such courts and personal service with
respect thereto. Each of the Adviser and each Underwriter 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 Additional Compensation Agreement. The Adviser agrees that a final judgment in any
proceeding or counterclaim brought in any such court shall be conclusive and binding upon the
Adviser and may be enforced in any other courts to the jurisdiction of which the Adviser is or may
be subject, by suit upon such judgment.
SECTION 12. Entire Agreement. This Additional Compensation 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 Additional Compensation 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 Additional Compensation Agreement, which will remain
in full force and effect. This Additional Compensation Agreement may not be amended or otherwise
modified or waived except by an instrument in writing signed by each Underwriter and the Adviser.
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.
[END OF TEXT]
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 Adviser and the Qualifying Underwriters in accordance with its
terms.
| Very truly yours, [ ] |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| CONFIRMED AND ACCEPTED, as of the date first above written: |
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| XXXX XXXXXXX ADVISERS LLC | ||||
By: |
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| Title: | ||||
SCHEDULE A
| Aggregate | ||||||||
| Purchase Price to Public | Pro Rata | |||||||
| Name of Qualifying Underwriter | of Common Shares Sold | Percentage | ||||||
[ ] |
$ | [ ] | [ ] | % | ||||
Indemnification Agreement
September [ ], 2007
[ ]
[ADDRESS]
[ADDRESS]
In connection with the additional compensation payments made to [ ] (the “Bank”) by the
undersigned (the “Company”) as set forth in the Additional Compensation Agreement dated September [
], 2007, between the Company and the Bank (the “Agreement”), in the event that the Bank 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 the Bank 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,
bad faith or willful misconduct of the Bank. In addition, in the event that the Bank 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 the Bank for its legal and other expenses (including the reasonable cost of
any investigation and preparation) as such expenses are incurred by the Bank 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 shareholders and affiliates and other constituencies, on the one hand, and the Bank, 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 shareholders 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 shareholders 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 shareholders 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 the Bank has been retained to perform financial services bears to the
fees paid to the Bank under the Agreement; provided, that in no event shall the Company contribute
less than the amount necessary to assure that the Bank is not liable for losses, claims, damages,
liabilities and expenses in excess of the amount of fees actually received by the Bank pursuant to
the Agreement. Relative fault shall be determined by reference to, among other 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 the Bank, on the other hand. The Company will not settle any
Proceeding in respect of which
indemnity may be sought hereunder, whether or not the Bank is an actual or potential party to such
Proceeding, without the Bank’s prior written consent. For purposes of this Indemnification
Agreement, the Bank shall include the Bank itself, any of its affiliates, each other person, if
any, controlling the Bank 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 the Bank 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 the
Bank’s 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,
bad faith or willful misconduct of the Bank in performing the services that are the subject of the
Agreement. Nothing in this Indemnification Agreement shall be read or construed to limit any
obligations of any party arising under or in connection with the Underwriting 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 THE BANK 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 THE BANK OR ANY
INDEMNIFIED PARTY. EACH OF THE BANK AND THE COMPANY WAIVE 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.
The foregoing Indemnification Agreement shall remain in full force and effect notwithstanding
any termination of the Bank’s 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, XXXX XXXXXXX ADVISERS, LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| Accepted and agreed to as of the date first above written: |
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| [ ] | ||||
By: |
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| Title: | ||||
