Exhibit (k)(5)
CC US DRAFT: 05/11/05
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of June
[__], 2005, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Xxxxx Xxxxx Management ("Xxxxx Xxxxx").
WHEREAS, the Xxxxx Xxxxx Tax-Managed Buy-Write Opportunities Fund
(including any successor by merger or otherwise) (the "Fund") is a diversified,
closed-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), and its common shares are registered
under the Securities Act of 1933, as amended; and
WHEREAS, Xxxxx Xxxxx is the investment adviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of the
Fund's common shares;
WHEREAS, Xxxxx Xxxxx desires to provide additional compensation to Xxxxxxx
Xxxxx for acting as lead underwriter in an offering of the Fund's common shares;
and
WHEREAS, Xxxxx Xxxxx 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) Xxxxx Xxxxx 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 Xxxxx Xxxxx:
(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 Xxxxx Xxxxx in connection therewith;
and
(3) information to and consult with Xxxxx Xxxxx with respect to
applicable strategies designed to address market value
discounts, if any.
(b) At the request of Xxxxx Xxxxx, Xxxxxxx Xxxxx shall limit or cease
any action or service provided hereunder to the extent and for the
time period requested by Xxxxx Xxxxx; provided, however, that
pending termination of this Agreement as provided for in Section 6
hereof, any such limitation or cessation shall not relieve Xxxxx
Xxxxx of its payment obligations pursuant to Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify Xxxxx Xxxxx, as the case may be,
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 Xxxxx Xxxxx
in connection with the performance of services by Xxxxxxx Xxxxx
under this Agreement.
2. Xxxxx Xxxxx shall pay Xxxxxxx Xxxxx a fee computed weekly and payable
quarterly in arrears commencing June 30, 2005 at an annualized rate of
0.15% of the average daily Gross Assets (as defined below) of the Fund for
a term as described in Section 6 hereof; provided that the total amount of
the fee hereunder, shall not exceed [_____]% of the total price to the
public of the Fund's common shares offered by the Prospectus dated June
[__], 2005 (the "Prospectus") (including all Initial Securities and Option
Securities as such terms are described in the Purchase Agreement, dated
June [__], 2005, by and among the Fund, Xxxxx Xxxxx and each of the
Underwriters named therein (the "Purchase Agreement")). The sum total of
this fee, [any other additional compensation], plus the amount of the
expense reimbursement of $.00667 per common share payable by the Fund to
the underwriters pursuant to the Purchase Agreement shall not exceed 4.5%
of the total price of the Fund's common shares offered by the Prospectus.
The sum total of all compensation to the Underwriters in connection with
the public offering of the common shares of the Fund, including sales load
and all forms of additional compensation to the Underwriters, shall not
exceed 9.0% of the total price of the Fund's common shares offered by the
Prospectus. "Gross Assets" is defined as total assets of the Fund,
including any form of investment leverage that the Fund may in the future
determine to utilize, minus all accrued expenses incurred in the normal
course of operations, but not excluding any liabilities or obligations
attributable to any future investment leverage obtained through (i)
indebtedness of any type (including, without limitation, borrowing through
a credit facility/commercial paper program or the issuance debt
securities), (ii) the issuance of preferred shares or other similar
preference securities, (iii) the reinvestment of collateral received for
securities loaned in accordance with the Fund's investment objectives and
policies, and/or (iv) any other means. All quarterly fees payable
hereunder shall be paid to Xxxxxxx Xxxxx within 15 days following the end
of each calendar quarter.
3. Xxxxx Xxxxx 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 commission amount
described in Section 2 above.
4. Xxxxx Xxxxx 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.
5. 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 Xxxxx Xxxxx are not
impaired thereby.
6. The term of this Agreement shall commence upon the date referred to above
and shall be in effect so long as Xxxxx Xxxxx acts as the investment
manager to the Fund pursuant to the Investment Management Agreement (as
such term is defined in the Purchase Agreement) or other subsequent
advisory agreement.
7. Xxxxx Xxxxx will xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx
Xxxxx believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). Xxxxx Xxxxx recognizes
and confirms that Xxxxxxx Xxxxx (a) will use and rely
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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 Xxxxx Xxxxx'x knowledge, the
Information to be furnished by Xxxxx Xxxxx 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. Xxxxx Xxxxx 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.
8. Xxxxx Xxxxx agrees that Xxxxxxx Xxxxx shall have no liability to Xxxxx
Xxxxx 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. Xxxxx Xxxxx
agrees to the indemnification and other agreements 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 Agreement.
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 Xxxxx Xxxxx and Xxxxxxx Xxxxx consent to
the jurisdiction of such courts and personal service with respect thereto.
Each of Xxxxxxx Xxxxx and Xxxxx Xxxxx 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. Xxxxx Xxxxx agrees that a
final judgment in any proceeding or counterclaim brought in any such court
shall be conclusive and binding upon Xxxxx Xxxxx and may be enforced in
any other courts to the jurisdiction of which Xxxxx Xxxxx 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 (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 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 Xxxxx Xxxxx.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to Xxxxx Xxxxx:
c/o Xxxxx Xxxxx Management
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Fund Administration
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or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
New York, New York 10080
Attention: Xxxx Xxxxx
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 U.S. mail with certified postage prepaid or when
actually received, whether by hand, express delivery service or facsimile
transmission, whichever is earlier.
14. A copy of the Agreement and Declaration of Trust of each of the Fund and
Xxxxx Xxxxx is on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice hereby is given that this Additional
Compensation Agreement is executed on behalf of Xxxxx Xxxxx by an officer
or trustee of Xxxxx Xxxxx in his or her capacity as an officer or trustee
of Xxxxx Xxxxx and not individually and that the obligations under or
arising out of this Additional Compensation Agreement are not binding upon
any of the trustees, officers or shareholders individually but are binding
only upon the assets and properties of Xxxxx Xxxxx.
15. 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.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
XXXXX XXXXX MANAGEMENT XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: By:
----------------------------------- ------------------------------------
Name: Name:
Title: Title:
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XXXXXXX XXXXX & CO. INDEMNIFICATION AGREEMENT
June [__], 2005
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") to advise and assist the
undersigned (together with its affiliates and subsidiaries, referred to as the
"Company") with the matters set forth in the Agreement dated June [__], 2005
between the Company and Xxxxxxx Xxxxx (the "Agreement"), in the event that
Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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 or willful
misconduct of Xxxxxxx Xxxxx. In addition, in the event that Xxxxxxx Xxxxx
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 Xxxxxxx Xxxxx
for its legal and other expenses (including the cost of any investigation and
preparation) as such expenses are incurred by Xxxxxxx Xxxxx 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 stockholders
and affiliates and other constituencies, on the one hand, and Xxxxxxx Xxxxx, 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 stockholders 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 stockholders 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
stockholders 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 Xxxxxxx Xxxxx has been retained to perform financial services bears to the
fees paid to Xxxxxxx Xxxxx under the Agreement; provided, that in no event shall
the Company contribute less than the amount necessary to assure that Xxxxxxx
Xxxxx is not liable for losses, claims, damages, liabilities and expenses in
excess of the amount of fees actually received by Xxxxxxx Xxxxx pursuant to the
Agreement. Relative fault shall be determined by reference to, among other
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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 Xxxxxxx
Xxxxx, on the other hand. The Company will not settle any Proceeding in respect
of which indemnity may be sought hereunder, whether or not Xxxxxxx Xxxxx is an
actual or potential party to such Proceeding, without Xxxxxxx Xxxxx'x prior
written consent. For purposes of this Indemnification Agreement, Xxxxxxx Xxxxx
shall include Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, any of its affiliates, each other person, if any, controlling
Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx'x 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 or willful misconduct of Xxxxxxx Xxxxx in performing the services
that are the subject of the 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 XXXXXXX XXXXX 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
XXXXXXX XXXXX OR ANY INDEMNIFIED PARTY. EACH OF XXXXXXX XXXXX AND THE COMPANY
WAIVES 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.
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The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of Xxxxxxx Xxxxx'x 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,
XXXXX XXXXX MANAGEMENT
By:
------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
------------------------------------
Name:
Title:
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