EXHIBIT (k)
FORM OF 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 Xxxxxxxx & Xxxxxxxx Incorporated ("Xxxxxxxx &
Xxxxxxxx").
WHEREAS, Xxxxxxxx & Xxxxxxxx/Claymore Total Return Fund Incorporated
(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, Xxxxxxxx & Xxxxxxxx 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, Xxxxxxxx & Xxxxxxxx desires to provide additional compensation
to Xxxxxxx Xxxxx for acting as lead underwriter in an offering of the Fund's
common shares; and
WHEREAS, Xxxxxxxx & Xxxxxxxx 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) Xxxxxxxx & Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx
Incorporated:
(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 Xxxxxxxx & Xxxxxxxx in connection
therewith; and
(3) to provide information to and consult with Xxxxxxxx &
Xxxxxxxx with respect to applicable strategies
designed to address market value discounts, if any.
(b) At the request of Xxxxxxxx & Xxxxxxxx, Xxxxxxx Xxxxx shall limit or
cease any action or service provided hereunder to the extent and
for the time period requested by Xxxxxxxx & Xxxxxxxx; provided,
however, that pending termination of this Agreement as provided for
in Section 5 hereof, any such limitation or cessation shall not
relieve Xxxxxxxx & Xxxxxxxx of its payment obligations pursuant to
Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify Xxxxxxxx & Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx in
connection with the performance of services by Xxxxxxx Xxxxx under
this Agreement.
2. Xxxxxxxx & Xxxxxxxx shall pay Xxxxxxx Xxxxx a fee computed weekly and
payable quarterly in arrears commencing [ ], 2003 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,
plus the amount of the expense reimbursement of $.0083 per common share
payable by the Fund to the Underwriters pursuant to the Purchase
Agreement, 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,
Xxxxxxxx & Xxxxxxxx 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. Xxxxxxxx & Xxxxxxxx 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 Xxxxxxxx &
Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx 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. Xxxxxxxx & Xxxxxxxx will xxxxxxx Xxxxxxx Xxxxx with such information as
Xxxxxxx Xxxxx believes appropriate to its assignment hereunder (all
such information so furnished being the "Information"). Xxxxxxxx &
Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx'x knowledge, the Information to be furnished by
Xxxxxxxx & Xxxxxxxx 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. Xxxxxxxx & Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx 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
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or any other third party in connection with its engagement hereunder,
all of which are hereby expressly waived.
8. Xxxxxxxx & Xxxxxxxx agrees that Xxxxxxx Xxxxx shall have no liability
to Xxxxxxxx & Xxxxxxxx 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. Xxxxxxxx & Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx and
Xxxxxxx Xxxxx consent to the jurisdiction of such courts and personal
service with respect thereto. Each of Xxxxxxx Xxxxx and Xxxxxxxx &
Xxxxxxxx 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. Xxxxxxxx & Xxxxxxxx agrees that a final
judgment in any proceeding or counterclaim brought in any such court
shall be conclusive and binding upon Xxxxxxxx & Xxxxxxxx and may be
enforced in any other courts to the jurisdiction of which Xxxxxxxx &
Xxxxxxxx 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 Xxxxxxxx & Xxxxxxxx.
13. All notices required or permitted to be sent under this Agreement shall
be sent, if to Xxxxxxxx & Xxxxxxxx:
Xxxxxxxx & Xxxxxxxx Incorporated
000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower, World Financial Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
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.
XXXXXXXX & XXXXXXXX INCORPORATED 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 reasonably 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,
XXXXXXXX & XXXXXXXX INCORPORATED
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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