SERVICING AGREEMENT
Agreement made as of April 23, 2003, between Advent Claymore Convertible
Securities and Income Fund, a Delaware Business Trust (the "Fund") and Claymore
Securities, Inc., a Kansas corporation ("Claymore").
WHEREAS, the Fund intends to operate as a closed-end management investment
company, and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Fund has authorized the issuance of its common stock, par
value $.001 per share (the "Common Shares") and a class of preferred shares (the
"Preferred Shares") with the relative rights, terms and preferences of which are
to be determined in the future by the Board of Trustees (the "Board") of the
Fund (holders of the Common Shares and Preferred Shares are referred to
collectively herein as the "Shareholders");
WHEREAS, the Fund wishes to retain Claymore to provide certain services to
the Fund, under the terms and conditions stated below, and Claymore is willing
to provide such services for the compensation set forth below:
NOW, THEREFORE, In consideration of the premises and mutual covenants
contained herein, the parties hereby agree as follows:
1. APPOINTMENT. The Fund hereby appoints Claymore as Servicing Agent of
the Fund, and Claymore accepts such appointment and agrees that it
will furnish the services set forth in paragraph 2 below.
2. SERVICES AND DUTIES OF CLAYMORE. Subject to the supervision of the
Board, Claymore will:
(a) Reply to requests for information concerning the Fund from
shareholders or prospective shareholders, brokers or the
public;
(b) Aid in the secondary market support of the Fund through
regular written and oral communications with the Fund's New
York Stock Exchange specialist, the closed-end fund analyst
community and various information providers specializing in
the dissemination of closed-end fund information;
(c) Prepare reports to be sent to the Fund shareholders and
print and disseminate such reports to shareholders, each
with the assistance of the Fund;
(d) Prepare all reports required to be filed with the Securities
and Exchange Commission (the "SEC") on Form N-SAR and Form
N-CSR, or such other form as the SEC may substitute for Form
N-SAR and Form N-CSR, and file such completed forms with the
SEC, each with the assistance of the Fund;
(e) Disseminate to shareholders of the Fund the Fund's proxy
materials and file such materials with the Fund's
regulators, and oversee the tabulation of proxies by the
Fund's transfer agent, each with the assistance of the Fund;
(f) Analyze the amounts available for distribution as dividends
and distributions to be paid by the Fund to its shareholders
and prepare materials relevant to the Fund's Dividend
Reinvestment Plan, each with the assistance of the Fund;
(l) Establish and maintain a toll-free number for sales support
and marketing requests on an ongoing basis;
(m) Produce (with the assistance of the Fund) marketing and
road-show materials for the offerings of the Fund's Common
Shares and Preferred Shares;
(n) Develop and maintain a website for the Fund which will
provide quarterly updates, weekly and month-end net asset
value and monthly distribution notifications, as well as
hyperlinks to the websites of Claymore and Advent Capital
Management, LLC (the "Adviser") for added information;
(o) Communicate to the investment community any changes made to
the Fund's trading strategies;
(p) Provide materials regarding the Fund to the investment
community (excluding prospective investors);
(q) Assist in the review of materials made available to
shareholders and prospective investors to assure compliance
with applicable laws, rules and regulations;
(r) File advertisements and sales materials, including
information on the Fund's website, as necessary, with the
Securities and Exchange Commission ("SEC"), the New York
Stock Exchange, the National Association of Securities
Dealers, Inc. and any regulatory bodies having jurisdiction
over the Fund and its operations (each with the assistance
of the Fund);
(s) Disseminate the Fund's weekly and month-end net asset value,
market price and discount (with the assistance of the Fund);
(t) Host analyst meetings as appropriate;
(u) Provide persons to serve as officers and trustees of the
Fund, as the Fund may request;
(v) Maintain ongoing contact with brokers in branch offices
whose clients hold Fund shares or whose clients may have an
interest in acquiring Fund shares, including providing,
among other things, progress reports on the Fund, dividend
announcements and performance updates;
(w) Assist in the drafting of press releases to the public;
(x) Make such reports and recommendations to the Board as the
Board reasonably requests or deems appropriate; and
(y) Provide such other services as the parties may mutually
agree from time to time.
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3. COMPLIANCE WITH THE FUND'S GOVERNING DOCUMENTS AND APPLICABLE LAW. In
all matters pertaining to the performance of this Agreement, the
Servicing Agent will act in conformity with the Fund's Agreement and
Declaration of Trust, By-Laws and registration statements on Form N-2
and in accordance with the directions of the Board and the Fund's
executive officers and will conform to and comply with the
requirements of the 1940 Act and the rules and regulations thereunder
and all other applicable federal or state laws and regulations.
4. SERVICE NOT EXCLUSIVE. The Servicing Agent's services hereunder are
not deemed to be exclusive, and the Servicing Agent is free to render
such services to other funds or clients as long as the Servicing
Agent's services under this Agreement are not impaired thereby.
5. REPRESENTATIONS AND WARRANTIES OF CLAYMORE
(a) Claymore represents and warrants that it has obtained all
necessary registrations, licenses and approvals in order to
perform the services provided in this Agreement. Claymore
covenants to maintain all necessary registrations, licenses and
approvals in effect during the term of this Agreement.
(b) Claymore represents that it has adopted a written Code of Ethics
in compliance with Rule 17j-1 under the 1940 Act and will provide
the Fund with any amendments to such Code and any certifications
required by Rule 17j-1.
(c) Claymore agrees that it shall promptly notify the Fund (i) in the
event that the SEC or any other regulatory authority has censured
its activities, functions or operations; suspended or revoked any
registration, license or approval; or has commenced proceedings
or an investigation that may result in any of these actions, and
(ii) in the event that there is a change of control in Claymore,
change in its management or in its financial status, or any other
change to Claymore that adversely affects its ability to perform
services under this Agreement.
(d) The Fund shall be given access to the records of Claymore at
reasonable times solely for the purpose of monitoring compliance
with the terms of this Agreement. Claymore agrees to cooperate
with the Fund and its representatives in connection with any such
monitoring efforts.
(e) Claymore represents and warrants that it has in place policies
and procedures reasonably designed to assure the proper
processing of information provided to Claymore by the Fund and to
assure the timely filing of such information with regulators as
required by applicable law.
(f) Claymore represents and warrants that (i) it is a validly
existing entity and has full corporate power and authority to
perform its obligations under this Agreement, (ii) this Agreement
has been duly and validly authorized, executed and delivered on
its behalf and constitutes its binding and enforceable obligation
in accordance with its terms and (iii) the execution and delivery
of this Agreement, the incurrence of its obligations herein set
forth and the consummation of the transactions contemplated
herein and in the Fund's registration statement on Form N-2 will
not constitute a breach of, or default under, its constituent
documents or under any order, rule or regulation applicable to it
of any court or any governmental body or administrative agency
having jurisdiction over it.
6. COMPENSATION. As compensation for its services, the Fund pays the
Servicing Agent an annual fee computed and paid monthly based on the
average weekly value of the Fund's
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Managed Assets during such month as described in the Fund's
registration statement on Form N-2.
7. LIMITATION OF LIABILITY OF THE SERVICING AGENT. The Servicing Agent
will not be liable for any reasonable error of judgment or for any
loss suffered by the Fund or its shareholders in connection with the
performance of its duties under this Agreement, except a loss
resulting from a breach of its representations and warranties, from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
duties under this Agreement ("Disabling Conduct").
Claymore agrees to indemnify, defend and hold the Fund, the
Adviser, their several officers and trustees, and any person who
controls the Fund or the Adviser within the meaning of Section 15 of
the Securities Act of 1933 (collectively, "Fund Indemnified Persons"),
free and harmless from and against any and all claims, demands,
liabilities and expenses (including the costs of investigating or
defending such claims, demands or liabilities and any reasonable
counsel fees incurred in connection therewith) which Fund Indemnified
Persons may incur, but only to the extent that such liability or
expense incurred by the Fund Indemnified Persons or resulting from
such claims or demands shall arise out of or be based upon (a) any
Disabling Conduct with respect to the provision of services under this
Agreement, (b) any violation of law relating to the provision of
services under this Agreement or (c) the breach by Claymore of this
Agreement.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE FUND.
Pursuant to the provisions of the Fund's Agreement and Declaration of
Trust, this Agreement is entered into by the Board not individually,
but as Trustees, and the obligations of the Fund hereunder are not
binding upon any such Trustees or shareholders of the Fund, but binds
only the Fund itself.
9. DURATION AND TERMINATION. This Agreement shall continue for an initial
period of two years and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically
approved at least annually by (a) a vote of a majority of the Fund's
Board and (b) a vote of a majority of the Fund's Board members who are
not interested persons (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable (a)
by the Fund, without penalty, on thirty (30) days' written notice, by
a vote of a majority of the Fund's Board, or (b) on sixty (60) days'
written notice by Claymore. This Agreement shall automatically
terminate in the event of its assignment as the term is defined in the
1940 Act, or upon any material breach of the terms of this agreement
by either party.
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged, amended or terminated orally, but only by
an instrument in writing signed by both parties hereto.
11. LICENSE.
Claymore hereby grants to the Fund the nonexclusive right and
license to use the xxxx "Claymore" (the "Licensed Xxxx") in the Fund's
name and in connection with the formation, issuance, marketing, and/or
promotion of, or disclosure related to, the Fund. Claymore agrees that
it shall receive no compensation for any such use by the Fund.
Claymore hereby warrants and represents that it has filed applications
and/or owns rights in the Licensed Xxxx sufficient to grant this
license. No right, title or interest in the Licensed Xxxx, except the
right to use the Licensed Xxxx as provided in this Agreement, is or
will be transferred to the Fund by this Agreement. Should this
Agreement be terminated, the Fund agrees that it will take reasonably
necessary steps to change its name to a name not including the word
"Claymore."
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12. CONFIDENTIALITY.
Claymore agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records
and other information relative to the Fund, the Adviser and all prior,
current or potential shareholders of the Fund and not to use such
records and information for any purpose other than the performance of
its duties hereunder. Claymore also agrees that, without the prior
written consent of the Fund, it will not disclose personal information
of any shareholders of the Fund ("Personal Shareholder Information"),
including to its affiliates, unless it is required by law to disclose
the information to the recipient of such information. Claymore further
agrees, represents and warrants that (a) only those employees of
Claymore who need to do so in carrying out their job responsibilities
may access Personal Shareholder Information; (b) it maintains
physical, electronic and procedural safeguards that comply with
federal standards to protect confidentiality; and (c) it may use
Personal Shareholder Information only for the purposes set forth in
this Agreement. Upon termination of this Agreement, Claymore with
either return any confidential information it obtains from the Fund or
the Adviser to the Adviser or destroy such information (to the extent
permitted by applicable law).
13. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the 1940 Act and the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
14. BOOKS AND RECORDS
(a) In compliance with the requirements of the 1940 Act, Claymore
hereby agrees that all records which it maintains for the Fund
are the property of the Fund and further agrees to surrender
promptly to the Fund any of such records upon request. Claymore
further agrees to preserve for the periods prescribed under the
1940 Act the records required to be maintained under the 0000
Xxx.
(b) Claymore hereby agrees to furnish to regulatory authorities
having the requisite authority any information or reports in
connection with services that Claymore renders pursuant to this
Agreement which may be requested in order to ascertain whether
the operations of the Fund are being conducted in a manner
consistent with applicable laws and regulations.
15. MISCELLANEOUS. The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. NOTICES.
All notices required or permitted to be sent under this Agreement
shall be sent, if to the Fund, to:
Advent Claymore Convertible Securities and Income Fund
c/o Advent Capital Management, LLC
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
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Or if to Claymore, to:
Claymore Securities, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx, COO and General Counsel
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
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IN WITNESS WHEREOF, the parties hereto have caused the instrument to be
executed by their officers designated below as of the day and year first
above written.
ADVENT CLAYMORE CONVERTIBLE
SECURITIES AND INCOME FUND
/s/ Xxxx Xxxxxx
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By: Xxxx Xxxxxx
Title: Secretary
CLAYMORE SECURITIES, INC.
/s/ Xxxxxxxx Xxxxxxx
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By: Xxxxxxxx Xxxxxxx
Title: Chief Operations Officer and General Counsel
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