Exhibit (k)(3)
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of [ ],
2003, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Fund Asset Management, L.P. (the "Investment
Adviser").
WHEREAS, Muni California Intermediate Duration Fund, Inc. (including any
successor by merger or otherwise, the "Fund") is a newly organized,
non-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 daily
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 [ ], 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 total amount of the fee hereunder 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 [ ], 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; 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% back to the
closing date of the Fund's Common Stock offering. 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.
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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
Xxxxx Xxxxx, 0xx Xxxxx, World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
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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 WITNESS 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:
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