EXHIBIT h.4
ADDITIONAL COMPENSATION AGREEMENT
March __, 2004
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 Calamos Strategic Total Return Fund
(the "Fund"), Calamos Asset Management, Inc. (the "Adviser") and each of the
Underwriters named therein, with respect to the issue and sale of the Fund'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 Fund and (ii) the registration statement on Form N-2 with
respect to the Common Shares of the Fund (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)
0.15% multiplied by (B) the Fund's Managed Assets (as defined in Section 3(b)
hereof) multiplied by (C) a fraction, the numerator of which is the number of
Common Shares sold by the Underwriter in the Fund's initial public offering as
listed on Schedule I and the denominator of which is the total number of Common
Shares sold in the Fund'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
Services Fee, the Underwriter will provide to the Adviser (i) after-market
support services designed to maintain the visibility of the Fund on an ongoing
basis, (ii) 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 Adviser in connection
therewith and (iii) 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 Fund (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 funds 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, 2004. 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 Fund 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. and UBS Securities LLC pursuant to the Structuring
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 Fund and (e)
the date on which the Investment Management Agreement or other advisory
agreement between
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that Fund and the Adviser or any successor in interest to the Adviser, including
but not limited to an affiliate of the Adviser, shall terminate.
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
Fund'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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CALAMOS ASSET MANAGEMENT, INC.
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 __, 2004
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 __, 2004
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") 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 the Bank 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 the Bank. In addition, in the event that the Bank 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 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.
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 in connection with or as a result of either the Bank's 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 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 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 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.
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,
CALAMOS ASSET MANAGEMENT, INC.
By: ______________________
Name:
Title:
Accepted and agreed to as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: ______________________
Name:
Title:
INDEMNIFICATION AGREEMENT
March __, 2004
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 __, 2004
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") 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 the Bank 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 the Bank. In addition, in the event that the Bank 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 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.
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 in connection with or as a result of either the Bank's 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 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 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 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.
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,
CALAMOS ASSET MANAGEMENT, INC.
By: ______________________
Name:
Title:
Accepted and agreed to as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: ______________________
Name:
Title:
