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 Advent Capital Management, LLC ("Advent Capital
Management").
WHEREAS, Advent Claymore Convertible Securities and Income Fund (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, Advent Capital 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, Advent Capital 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, Advent Capital 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) Advent Capital 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 Advent Capital 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 Advent Capital Management in connection
therewith; and
(3) to provide information to and consult with Advent Capital
Management with respect to applicable strategies designed to
address market value discounts, if any.
(b) At the request of Advent Capital Management, Xxxxxxx Xxxxx shall limit
or cease any action or service provided hereunder to the extent and
for the time period requested Advent Capital Management; provided,
however, that pending termination of this Agreement as provided for in
Section 5 hereof, any such limitation or cessation shall not relieve
Advent Capital Management of its payment obligations pursuant to
Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify Advent Capital 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 Advent Capital
Management in connection with the performance of services by Xxxxxxx
Xxxxx under this Agreement.
2. Advent Capital Management shall pay Xxxxxxx Xxxxx a fee computed weekly and
payable quarterly in arrears commencing [ ], 2003 at an annualized rate of
0.125% of the Fund's Managed Assets (as such term is defined in the
prospectus dated [ ], 2003) for the first five years of the Fund's
operations (through [ ], [ ]), and thereafter at an annualized rate of
0.15% of the Fund's Managed Assets, 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, Advent Capital Management and each of the
Underwriters named therein, the "Purchase Agreement") to the public of the
Fund's common shares offered by the prospectus dated [ ], 2003; 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. Advent Capital 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 Advent Capital 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 Advent Capital Management 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.
6. Advent Capital Management will xxxxxxx Xxxxxxx Xxxxx with such information
as Xxxxxxx Xxxxx believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). Advent Capital
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 Advent Capital Management's
knowledge, the Information to be furnished by Advent Capital 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.
Advent Capital 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.
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7. It is understood that Xxxxxxx Xxxxx is being engaged hereunder solely to
provide the services described above to Advent Capital 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 other third party in connection with its engagement hereunder, all of
which are hereby expressly waived.
8. Advent Capital Management agrees that Xxxxxxx Xxxxx shall have no liability
Advent Capital 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. Advent Capital 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 Advent Capital Management and Xxxxxxx
Xxxxx consent to the jurisdiction of such courts and personal service with
respect thereto. Each of Xxxxxxx Xxxxx and Advent Capital 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.
Advent Capital Management agrees that a final judgment in any proceeding or
counterclaim brought in any such court shall be conclusive and binding upon
Advent Capital Management and may be enforced in any other courts to the
jurisdiction of which Advent Capital 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 Advent Capital Management.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to Advent Capital Management:
Advent Capital Management, LLC
1065 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
or if to Xxxxxxx Xxxxx:
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Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
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.
Advent Capital Management, LLC XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: _____________________________ By: _____________________________
Name: Name:
Title: Title:
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XXXXXXX XXXXX & CO. INDEMNIFICATION AGREEMENT
[ ], 2003
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 [ ], 2003 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 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,
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 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
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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 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,
Advent Capital Management, LLC
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:
