Exhibit 99.(h)(ii)
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of [ ],
2004, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Claymore Advisors, LLC ("Claymore").
WHEREAS, TS&W/Claymore Tax-Advantaged Balanced 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;
WHEREAS, Claymore is the investment adviser and the administrator of the
Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of the
Fund's common shares;
WHEREAS, Claymore desires to provide additional compensation to Xxxxxxx
Xxxxx for acting as lead underwriter in an offering of the Fund's common shares;
and
WHEREAS, Claymore 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) Claymore 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 Claymore:
(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 Claymore in
connection therewith; and
(3) information to and consult with Claymore with respect to
applicable strategies designed to address market value
discounts, if any.
(b) At the request of Claymore, Merrill Lynch shall limit or cease any
action or service provided hereunder to the extent and for the time
period requested by Claymore; provided, however, that pending
termination of this Agreement as provided for in Section 5 hereof, any
such limitation or cessation shall not relieve Claymore of its payment
obligations pursuant to Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify Claymore, 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
Claymore in connection with the performance of services by Xxxxxxx
Xxxxx under this Agreement.
2. Claymore shall pay Xxxxxxx Xxxxx a fee computed weekly and payable
quarterly in arrears commencing [ ] at an annualized rate of 0.15%
of the Fund's Managed Assets (as defined below) for a term as described in
Section 5 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 [ ], 2004 (including all
Initial Securities and Option Securities as such terms are described in the
Purchase Agreement, dated [ ], 2004, by and among the Fund, Claymore
and each of the Underwriters named therein (the "Purchase Agreement"). The
sum total of this fee, [the additional compensation payable to other
Qualifying Underwriters], the fee paid to Claymore Securities, Inc. for its
distribution assistance 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. "Managed Assets" is defined
as the total assets of the Fund (including any assets attributable to any
Preferred Shares that may be outstanding or otherwise attributable to the
use of leverage) minus the sum of accrued liabilities (other than debt
representing financial leverage). All quarterly fees payable hereunder
shall be paid to Xxxxxxx Xxxxx within 15 days following the end of each
calendar quarter.
3. Claymore 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
paragraph 2 above.
4. Claymore 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
advisers), so long as Xxxxxxx Xxxxx'x services to Claymore 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 Claymore acts as the investment adviser
to the Fund pursuant to the Investment Management Agreement (as such term
is defined in the Purchase Agreement) or other subsequent advisory
agreement.
7. Claymore will xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx Xxxxx
believes appropriate to its assignment hereunder (all such information so
furnished being the "Information"). Claymore 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 Claymore's knowledge, the Information to be furnished by
Claymore when delivered, will be true and correct in all material respects
and will not contain
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any material misstatement of fact or omit to state any material fact
necessary to make the statements contained therein not misleading. Claymore
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. Claymore agrees that Xxxxxxx Xxxxx shall have no liability to Claymore 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. Claymore 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 Claymore and Xxxxxxx Xxxxx consent to the
jurisdiction of such courts and personal service with respect thereto. Each
of Xxxxxxx Xxxxx and Claymore 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. Claymore agrees that a final
judgment in any proceeding or counterclaim brought in any such court shall
be conclusive and binding upon Claymore and may be enforced in any other
courts to the jurisdiction of which Claymore 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 Claymore.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to Claymore:
Claymore Advisors, LLC
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
CLAYMORE ADVISORS, 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
[ ], 2004
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 [ ], 2004 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
things,
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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,
CLAYMORE ADVISORS, 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:
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