EXHIBIT (k)(ii)
ADDITIONAL COMPENSATION AGREEMENT
[March 28], 2005
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx 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 The Gabelli Gold, Natural Resources
and Income Trust (the "Trust"), Gabelli Funds, LLC (the "Adviser") 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
Investment Management Agreement (the "Investment Management Agreement") between
the Adviser and the Trust and (ii) the registration statement on Form N-2 with
respect to 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.
1. Agreement. The Adviser hereby confirms its agreement with Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the "Underwriter") with respect to
the service fees referred to in the "Underwriting" section of the Registration
Statement, payable by the Adviser to the Underwriter. The Adviser agrees to pay
the Underwriter a fee (the "Service Fee") at an aggregate annual rate of (A) 15%
multiplied by (B) the investment advisory fees paid to the Adviser by the Trust
multiplied by (C) a fraction, the numerator of which is the number of Common
Shares sold by the Underwriter in the Trust's initial public offering as listed
on Schedule I and the denominator of which is the total number of Common Shares
sold in the Trust's initial public offering as listed on Schedule I (the product
of (B) and (C) to be referred to as the "Base Amount"); provided, however, that
such payments shall not, in the aggregate, exceed the "Maximum Service Fee
Amount" (as defined in Section 4 hereof). In exchange for the Service Fee, the
Underwriter will: (i) provide services related to the sale and distribution of
the Trust's Common Shares, (ii) provide after-market support services designed
to maintain the visibility of the Trust on an ongoing basis, (iii) provide
relevant information, studies or reports to the Adviser regarding general trends
in the closed-end investment company and asset management industries, if
reasonably obtainable, and consult with representatives of the Adviser in
connection therewith and (iv) provide information to and consult with the
Adviser with respect to applicable strategies designed to address market value
discounts, if any.
2. Reserved.
3. Payment of Service Fee. (a) The Adviser shall pay the Service Fee,
payable in arrears at the end of each calendar quarter, as follows: to the
Underwriter, a Service Fee in an amount equal to 0.0375% of the Base Amount.
(b) For the purposes of this Agreement, "Managed Assets" means the
total assets of the Trust (including any assets attributable to any leverage
that may be outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage). For this purpose the liquidation preference on
any preferred shares will not constitute a liability.
(c) The Service Fee payable hereunder shall be paid to the Underwriter
by wire transfer of immediately available Trusts within 30 days following the
end of each calendar quarter to a bank account designated by the Underwriter. At
the time of each payment of the Service Fee hereunder, the Adviser shall deliver
to the Underwriter a statement indicating the amount of Managed Assets on which
such payment was based.
(d) The initial payments of the Service Fee hereunder shall be with
respect to the calendar quarter ending June 30, 2005. In the event that this
Agreement terminates prior to the end of a calendar quarter, the Service Fee
required to be paid hereunder shall be due and payable within 30 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 that is not a business day, it shall be due on the next
day that is a business day. The Service Fee payable hereunder shall be in
addition to any fees paid by the Adviser pursuant to the Underwriting Agreement.
(e) The Adviser shall be permitted to terminate this Agreement at any
time upon making a prepayment to the Underwriter of amounts otherwise payable
hereunder. The amount of any such prepayment will be determined by mutual
agreement of the Adviser and the Underwriter.
4. Maximum Service Fee Amount. The "Maximum Service Fee Amount" payable
by the Adviser hereunder shall be 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 Underwritten Securities and Option
Securities), minus (i) the amount payable by the Trust to the Underwriters
pursuant to Section 6(i) of the Underwriting Agreement for partial reimbursement
of certain underwriter expenses and (ii) the amount payable by the Adviser to
Citigroup Global Markets Inc. pursuant to the Fee Agreements dated the date
hereof.
5. Indemnification. The Adviser 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.
6. Term. This Agreement shall terminate on the earliest to occur of (a)
the delivery by the Underwriter to the Adviser of written notice of the
Underwriter's intent to terminate its provision of services pursuant to this
Agreement; (b) the payment by the Adviser hereunder of the Maximum Service Fee
Amount, (c) the prepayment by the Adviser of an agreed upon amount in accordance
with Section 3(e) hereof, (d) the dissolution and winding up of the Trust and
(e) the date on which the Investment Management Agreement or other advisory
agreement between that Trust and the Adviser or any successor in interest to the
Adviser, including but not limited to an affiliate of the Adviser, shall
terminate.
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7. Not an Investment Adviser. The Adviser acknowledges that the
Underwriter is 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 the
Underwriter, and the Underwriter 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.
8. Not Exclusive. Nothing herein shall be construed as prohibiting the
Underwriter or its affiliates from acting as an underwriter for any other
persons (including other registered investment companies or other investment
advisers).
9. Assignment. This Agreement may not be assigned by any party without
the prior written consent of the other party.
10. Amendment; Waiver. No provision of this Agreement may be amended or
waived except by an instrument in writing signed by the parties hereto.
11. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
12. Counterparts. This 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 Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
The Agreement shall be effective as of the date first written above.
[END OF TEXT]
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GABELLI FUNDS, LLC
By:______________________
Name:
Title:
Agreed and Accepted:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:
--------------------------------------------
Name:
Title:
Schedule I
Common Shares sold by Underwriter
Total Number of Common Shares sold in Initial Public Offering
INDEMNIFICATION AGREEMENT
[March 28], 2005
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 Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated (the "Bank") to advise and assist the undersigned (together
with its affiliates and subsidiaries, referred to as the "Company") with the
matters set forth in the Additional Compensation Agreement dated [March 28],
2005 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") with
respect to the services performed pursuant to and in accordance with 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 with respect to the services performed
pursuant to and in accordance with 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 primarily from
the gross negligence or willful misconduct of the Bank. In addition, in the
event that the Bank becomes involved in any capacity in any Proceeding with
respect to the services performed pursuant to and in accordance with the
Agreement, the Company will reimburse the Bank for its legal and other expenses
(including the 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 stockholders 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 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 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, 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.
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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 with respect to the services performed pursuant to and in accordance
with 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 primarily from the
gross negligence or willful misconduct of the Bank 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 WITH RESPECT TO THE SERVICES PERFORMED PURSUANT
TO AND IN ACCORDANCE WITH THE 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 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 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,
GABELLI FUNDS, LLC
By: ______________________
Name:
Title:
Accepted and agreed to as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: ______________________
Name:
Title:
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