ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of September
27, 2002, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Xxxxxxxxx Xxxxxx Management Inc. ("NB
Management").
WHEREAS, Xxxxxxxxx Xxxxxx California Intermediate Municipal 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
common shares are registered under the Securities Act of 1933, as amended; and
WHEREAS, NB Management is the investment advisor of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering
of the Fund's common shares;
WHEREAS, NB Management desires to provide additional compensation to
Xxxxxxx Xxxxx for acting as lead underwriter in an offering of the Fund's common
shares; and
WHEREAS, NB Management 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) NB Management 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 NB Management:
(1) to provide after-market support services designed to maintain
the visibility of the Fund on an ongoing basis;
(2) to provide 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 NB Management in connection therewith;
and
(3) to provide information to and consult with NB Management with
respect to applicable strategies designed to address market
value discounts, if any.
(b) At the request of NB Management, Xxxxxxx Xxxxx shall limit or cease
any action or service provided hereunder to the extent and for the
time period requested by NB Management; provided, however, that
pending termination of this Agreement as provided for in Section 5
hereof, any such limitation or cessation shall not relieve NB
Management of its payment obligations pursuant to Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify NB Management 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 NB Management in connection
with the performance of services by Xxxxxxx Xxxxx under this
Agreement.
2. NB Management shall pay Xxxxxxx Xxxxx a fee computed weekly and payable
quarterly in arrears commencing December 31, 2002 at an annualized rate of
0.10% of the Fund's managed assets for a term as described in Section 5
hereof; provided that the sum of the fee hereunder plus the amount of the
expense reimbursement of $.005 per common share payable by the Fund to the
underwriters pursuant to the Purchase Agreement (as defined below) shall
not exceed 4.5% of the total price (including all Initial Securities and
Option Securities as such terms are described in the Purchase Agreement,
dated September 24, 2002 (the "Purchase Agreement"), by and among the
Fund, NB Management and each of the Underwriters named therein) to the
public of the Fund's common shares offered by the prospectus dated
September 24, 2002; and provided further, that in determining when this
maximum fee amount has been paid, the value of each of the quarterly
payments made hereunder shall be discounted at the annual rate of 10% to
the closing date of offering. All quarterly fees payable hereunder shall
be paid to Xxxxxxx Xxxxx within 15 days following the end of each calendar
quarter.
3. NB Management 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 NB Management 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 NB Management acts as the investment
manager to the Fund pursuant to the Investment Management Agreement (as
such term is defined in the Purchase Agreement), by and among the Fund, NB
Management and each of the Underwriters named therein, or other subsequent
advisory agreement.
6. NB Management will xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx
Xxxxx reasonably believes appropriate to its assignment hereunder (all
such information so furnished being the "Information"). NB Management
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 NB Management's knowledge, the
Information to be furnished by NB Management 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. NB Management 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 NB Management 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
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other third party in connection with its engagement hereunder, all of
which are hereby expressly waived.
8. NB Management agrees that Xxxxxxx Xxxxx shall have no liability to NB
Management 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. NB
Management agrees to the indemnification and other agreement 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 NB Management and Xxxxxxx Xxxxx consent
to the jurisdiction of such courts and personal service with respect
thereto. Each of Xxxxxxx Xxxxx and NB Management 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. NB Management
agrees that a final judgment in any proceeding or counterclaim brought in
any such court shall be conclusive and binding upon NB Management and may
be enforced in any other courts to the jurisdiction of which NB Management
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 NB Management.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to NB Management:
Xxxxxxxxx Xxxxxx Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
cc: Xxxxx Xxxxxxx
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
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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.
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IN WITHESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
XXXXXXXXX XXXXXX MANAGEMENT INC. XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx By: /s/ X. Xxxxxxxxx
----------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name:
Title: President Title:
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XXXXXXX XXXXX & CO. INDEMNIFICATION AGREEMENT
---------------------------------------------
September 27, 2002
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx, 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 September 27, 2002
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,
including, without limitation, related services and activities prior to the date
of 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, 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
such losses, claims, damages, liabilities and expenses resulted 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,
including, without limitation, related services and activities prior to the date
of 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 reasonably 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
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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
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 shall not be liable under this
Indemnification Agreement to Xxxxxxx Xxxxx regarding any settlement or
compromise or consent to the entry of any judgment with respect to any
Proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the Company is an actual or potential party to such
Proceeding) unless such settlement, compromise or judgment is consented to by
the Company. The Company shall not, without the prior written consent of Xxxxxxx
Xxxxx, settle or compromise or consent to the entry of any judgment with respect
to any Proceeding in respect of which indemnification or contribution could be
sought under this Indemnification Agreement (whether or not Xxxxxxx Xxxxx is an
actual or potential party thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of Xxxxxxx Xxxxx from all
liability arising out of such Proceeding and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf
of Xxxxxxx Xxxxx. 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 from the gross
negligence or willful misconduct of Xxxxxxx Xxxxx in performing the services
that are the subject of the Agreement.
Notwithstanding any provision contained herein, in no event shall Xxxxxxx
Xxxxx be entitled to indemnification by the Company hereunder from and against
any losses, claims, damages, liabilities or expenses in respect of which
indemnity may be sought under Section 6 of the Purchase Agreement (as defined in
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
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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,
XXXXXXXXX XXXXXX MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
Accepted and agreed to as of
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ X. Xxxxxxxxx
---------------------------
Name:
Title:
