INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement"), dated as of
April [ ], 2004, between Advent Claymore Global Convertible & Income Fund, a
Delaware statutory trust (the "Trust"), and Claymore Advisors, LLC, a Delaware
limited liability company (the "Advisor").
WHEREAS, the Advisor has agreed to furnish investment advisory
services and certain administrative services to the Trust, a closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Advisor is registered as a registered investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Advisor is willing to furnish such
services upon the terms and conditions herein set forth;
WHERAS, the Advisor will delegate its duties and obligations under
Section 2 hereof to Advent Capital Management, LLC, the Trust's Investment
Manager ("Advent"), pursuant to an investment management agreement among the
Advisor, Advent and the Trust, dated the date hereof;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, it is agreed by and between the parties hereto
as follows:
1. IN GENERAL. The Advisor agrees, all as more fully set forth
herein, to act as investment adviser to the Trust with respect to the
investment of the Trust's assets and to supervise and arrange for the
day-to-day operations of the Trust and the purchase of securities for and the
sale of securities held in the investment portfolio of the Trust.
2. DUTIES AND OBLIGATIONS OF THE ADVISOR WITH RESPECT TO INVESTMENT
OF ASSETS OF THE TRUST. Subject to the succeeding provisions of this section
and subject to the direction and control of the Trust's Board of Trustees (the
"Board"), the Advisor is hereby appointed as the Trust's agent and
attorney-in-fact with authority to negotiate, execute and deliver all
documents and agreements on behalf of the Trust and to do or take all related
acts, with the power of substitution, and shall (i) act as investment adviser
for and supervise and manage the investment and reinvestment of the Trust's
assets and, in connection therewith, have complete discretion in purchasing
and selling securities and other assets for the Trust and in voting,
exercising consents and exercising all other rights appertaining to such
securities and other assets on behalf of the Trust; (ii) supervise the
investment program of the Trust and the composition of its investment
portfolio; and (iii) arrange, subject to the provisions of paragraph 4 hereof,
for the purchase and sale of securities and other assets held in the
investment portfolio of the Trust. In performing its duties under this Section
2, the Advisor may delegate some or all of its rights, powers, duties and
obligations under this Agreement to one or more sub-investment advisers or
investment managers, including, without limitation, Advent; provided, however,
that any such delegation shall be pursuant to an agreement with terms agreed
upon by the Trust and approved in a manner consistent with the 1940 Act and
provided, further, that no such delegation shall relieve the Advisor from its
duties and obligations of management and supervision of the management of the
Trust's assets pursuant to this Agreement and to applicable law.
3. DUTIES AND OBLIGATIONS OF ADVISOR WITH RESPECT TO THE
ADMINISTRATION OF THE TRUST. The Advisor also agrees to furnish office
facilities and equipment and clerical, bookkeeping and administrative services
(other than such services, if any, provided by the Trust's Custodian, Transfer
Agent, Administrator and Dividend Disbursing Agent and other service
providers) for the Trust. To the extent requested by the Trust, the Advisor
agrees to provide the following administrative services:
(a) Reply to requests for information concerning the Trust from
shareholders or prospective shareholders, brokers or the public;
(b) Aid in the secondary market support of the Trust through regular
written and oral communications with the Trust'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 all reports required to be sent to the Trust's
shareholders under the 1940 Act, and assist in the printing and
dissemination of such reports to such shareholders, each with
the assistance of the Trust;
(d) Prepare all reports required to be filed with the Securities and
Exchange Commission (the "SEC") on Form N-SAR or Form N-CSR, or
such other forms as the SEC may substitute for Form N-SAR or
Form N-CSR, and file such completed forms with the SEC, each
with the assistance of the Trust;
(e) Disseminate to shareholders of the Trust the Trust's proxy
materials and assist in the filing of such materials with the
Trust's regulators, and oversee the tabulation of proxies by the
Trust's transfer agent, each with the assistance of the Trust;
(f) Analyze the amounts available for distribution as dividends and
distributions to be paid by the Trust to its shareholders and
prepare materials relevant to the Trust's Automatic Dividend
Reinvestment Plan, each with the assistance of the Trust;
(g) Establish and maintain a toll-free number for sales support and
marketing requests on an ongoing basis;
(h) Produce (with the assistance of the Trust) marketing and
road-show materials for the offerings of the Trust's common
shares and preferred shares of beneficial interest;
(i) Develop and maintain a website for the Trust which will provide
quarterly updates, daily and month-end net asset value and
monthly distribution notifications, as well as hyperlinks to the
websites of the Advisor and Advent, as applicable, for added
information;
(j) Assist Advent in devising trading strategies that might by used
by the Trust and communicate to the investment community any
changes made to the Trust's trading strategies;
(k) Assist in the provision of materials regarding the Trust to the
investment community and current and prospective investors;
(l) Assist in the review of materials made available to shareholders
and prospective investors to assure compliance with applicable
laws, rules and regulations;
(m) Assist in the filing of advertisements and sales materials,
including information on the Trust's website, as necessary, with
the SEC, the New York Stock Exchange, the National Association
of Securities Dealers and any regulatory bodies having
jurisdiction over the Trust and its operations;
(n) Assist in the dissemination of the Trust's net asset value,
market price and discount;
(o) Host analyst meetings as appropriate;
(p) Provide persons to serve as officers and trustees of the Trust,
as the Trust may request;
(q) Maintain ongoing contact with brokers in branch offices whose
clients hold Trust shares or whose clients may have an interest
in acquiring Trust shares, including providing, among other
things, progress reports on the Trust, dividend announcements
and performance updates;
(r) Assist in the drafting of press releases to the public;
(s) Make such reports and recommendations to the Board as the Board
reasonably requests or deems appropriate; and
(t) Provide such other services as the Trust, Advent and the Advisor
may mutually agree upon from time to time.
All services are to be furnished through the medium of any directors, officers
or employees of the Advisor or its affiliates as the Advisor deems appropriate
in order to fulfill its obligations hereunder. The Trust will reimburse the
Advisor or its affiliates for all out-of-pocket expenses incurred by them in
connection with the performance of the administrative services described in
this paragraph 3.
4. COVENANTS. In the performance of its duties under this Agreement,
the Advisor:
(a) shall at all times conform to, and act in accordance with, any
requirements imposed by: (i) the provisions of the 1940 Act and
the Advisers Act and all applicable Rules and Regulations of the
SEC; (ii) any other applicable provision of law; (iii) the
provisions of the Amended and Restated Agreement and Declaration
of Trust of the Trust and Amended and Restated By-Laws of the
Trust, as such documents may be amended from time to time; (iv)
the investment objectives, policies and restrictions of the
Trust as set forth in the Trust's Registration Statement on Form
N-2 (as currently in effect and as they may be amended or
supplemented from time to time); and (v) any policies and
determinations of the Board;
(b) will place orders either directly with the issuer or with any
broker or dealer. Subject to the other provisions of this
paragraph, in placing orders with brokers and dealers, the
Advisor will attempt to obtain the best price and the most
favorable execution of its orders. In placing orders, the
Advisor will consider the experience and skill of the firm's
securities traders as well as the firm's financial
responsibility and administrative efficiency. Consistent with
this obligation, the Advisor may select brokers on the basis of
the research, statistical and pricing services they provide to
the Trust and other clients of the Advisor. Information and
research received from such brokers will be in addition to, and
not in lieu of, the services required to be performed by the
Advisor hereunder. A commission paid to such brokers may be
higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the
Advisor determines in good faith that such commission is
reasonable in terms either of the transaction or the overall
responsibility of the Advisor to the Trust and its other clients
and that the total commissions paid by the Trust will be
reasonable in relation to the benefits to the Trust over the
long-term. In no instance, however, will the Trust's securities
be purchased from or sold to the Advisor, or any affiliated
person thereof, except to the extent permitted by the SEC or by
applicable law; and
(c) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust,
Advent, and the Trust's prior, current or potential
shareholders, and will not use such records and information for
any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and
approval in writing by the Trust or Advent, as applicable, which
approval shall not be unreasonably withheld and may not be
withheld where the Advisor may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or
when so requested by the Trust or Advent, as applicable.
5. SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall prevent
the Advisor or any officer, employee or other affiliate thereof from acting as
investment adviser for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Advisor or any of its officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the Advisor
will undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust or Advent any such records upon the Trust's or
Advent's request. The Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. AGENCY CROSS TRANSACTIONS. From time to time, the Advisor or
brokers or dealers affiliated with it may find themselves in a position to buy
for certain of their brokerage clients (each an "Account") securities which
the Advisor's investment advisory clients wish to sell, and to sell for
certain of their brokerage clients securities which advisory clients wish to
buy. Where one of the parties is an advisory client, the Advisor or the
affiliated broker or dealer cannot participate in this type of transaction
(known as a cross transaction) on behalf of an advisory client and retain
commissions from one or both parties to the transaction without the advisory
client's consent. This is because in a situation where the Advisor is making
the investment decision (as opposed to a brokerage client who makes his own
investment decisions), and the Advisor or an affiliate is receiving
commissions from both sides of the transaction, there is a potential
conflicting division of loyalties and responsibilities on the Advisor's part
regarding the advisory client. The SEC has adopted a rule under the Advisers
Act, which permits the Advisor or its affiliates to participate on behalf of
an Account in agency cross transactions if the advisory client has given
written consent in advance. By execution of this Agreement, the Trust
authorizes the Advisor or its affiliates to participate in agency cross
transactions involving an Account. The Trust may revoke its consent at any
time by written notice to the Advisor and Advent.
8. EXPENSES. During the term of this Agreement, the Advisor will bear
all costs and expenses of its employees and any overhead incurred in
connection with its duties hereunder and shall bear the costs of any salaries
or trustees fees of any officers or trustees of the Trust who are affiliated
persons (as defined in the 0000 Xxx) of the Advisor.
9. COMPENSATION OF THE ADVISOR.
(a) The Trust agrees to pay to the Advisor and the Advisor agrees to
accept as full compensation for all services rendered by the
Advisor as such, a monthly fee (the "Investment Advisory Fee"),
payable in arrears, at an annual rate equal to 0.49% of the
average daily value of the Trust's Managed Assets. "Managed
Assets" means the total assets of the Trust (including the
assets attributable to the proceeds from any financial leverage)
minus the sum of the accrued liabilities (other than the
aggregate indebtedness constituting financial leverage). The
liquidation preference of any preferred shares of the Trust, if
any, constituting financial leverage shall not be considered a
liability of the Trust. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated
according to the proportion which such period bears to a full
month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the total assets of the Trust
shall be calculated pursuant to the procedures adopted by
resolutions of the Board of the Trust for calculating the value
of the Trust's assets or delegating such calculations to third
parties. The Advisor will monitor the net asset calculation of
any third party making such calculation.
10. INDEMNITY.
(a) The Trust hereby agrees to indemnify the Advisor, and each of
the Advisor's directors, officers, employees, agents, associates
and controlling persons and the directors, partners, members,
officers, employees and agents thereof (including any individual
who serves at the Advisor's request as director, officer,
partner, member, trustee or the like of another entity) (each
such person being an "Indemnitee") against any liabilities and
expenses, including amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, and counsel fees (all
as provided in accordance with applicable state law) reasonably
incurred by such Indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or
investigative body in which such Indemnitee may be or may have
been involved as a party or otherwise or with which such
Indemnitee may be or may have been threatened, while acting in
any capacity set forth herein or thereafter by reason of such
Indemnitee having acted in any such capacity, except with
respect to any matter as to which such Indemnitee shall have
been adjudicated not to have acted in good faith in the
reasonable belief that such Indemnitee's action was in the best
interest of the Trust and furthermore, in the case of any
criminal proceeding, so long as such Indemnitee had no
reasonable cause to believe that the conduct was unlawful;
provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Trust or its shareholders
or any expense of such Indemnitee arising by reason of (i)
willful misfeasance, (ii) bad faith, (iii) gross negligence or
(iv) reckless disregard of the duties involved in the conduct of
such Indemnitee's position (the conduct referred to in such
clauses (i) through (iv) being sometimes referred to herein as
"disabling conduct"), (2) as to any matter disposed of by
settlement or a compromise payment by such Indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for
said payment or for any other expenses shall be provided unless
there has been a determination that such settlement or
compromise is in the best interests of the Trust and that such
Indemnitee appears to have acted in good faith in the reasonable
belief that such Indemnitee's action was in the best interest of
the Trust and did not involve disabling conduct by such
Indemnitee and (3) with respect to any action, suit or other
proceeding voluntarily prosecuted by any Indemnitee as
plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such
Indemnitee was authorized by a majority of the full Board.
(b) The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which
indemnification might be sought hereunder if the Trust receives
a written affirmation of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Trust unless it
is subsequently determined that such Indemnitee is entitled to
such indemnification and if the trustees of the Trust determine
that the facts then known to them would not preclude
indemnification. In addition, at least one of the following
conditions must be met: (i) the Indemnitee shall provide a
security for such Indemnitee-undertaking; (ii) the Trust shall
be insured against losses arising by reason of any lawful
advance; or (iii) a majority of a quorum consisting of trustees
of the Trust who are neither "interested persons" of the Trust
(as defined in Section 2(a)(19) of the 0000 Xxx) nor parties to
the proceeding ("Disinterested Non-Party Trustees") or an
independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that
the Indemnitee ultimately will be found entitled to
indemnification.
(c) All determinations with respect to indemnification hereunder
shall be made: (i) by a final decision on the merits by a court
or other body before whom the proceeding was brought that such
Indemnitee is not liable or is not liable by reason of disabling
conduct; or (ii) in the absence of such a decision, by (A) a
majority vote of a quorum of the Disinterested Non-Party
Trustees of the Trust, or (B) if such a quorum is not obtainable
or, even if obtainable, if a majority vote of such quorum so
directs, independent legal counsel in a written opinion. All
determinations that advance payments in connection with the
expense of defending any proceeding shall be authorized shall be
made in accordance with the immediately preceding clause (ii)
above.
(d) The rights accruing to any Indemnitee under these provisions
shall not exclude any other right to which such Indemnitee may
be lawfully entitled.
11. LIMITATION ON LIABILITY.
(a) The Advisor will not be liable for any error of judgment or
mistake of law or for any loss suffered by Advent or by the
Trust in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss
resulting 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.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that, as
provided in Section 5.1 of Article V of the Amended and Restated
Agreement and Declaration of Trust of the Trust, this Agreement
is executed by the Trustees and/or officers of the Trust, not
individually but as such Trustees and/or officers of the Trust,
and the obligations hereunder are not binding upon any of the
Trustees or shareholders individually but bind only the estate
of the Trust.
12. DURATION AND TERMINATION. This Agreement shall become effective
as of the date hereof and, unless sooner terminated by the Trust
or Advisor as provided herein, shall continue in effect for a
period of two years. Thereafter, if not terminated, this
Agreement shall continue in effect with respect to the Trust for
successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of
a majority of the Board or the vote of a majority of the
outstanding voting securities of the Trust at the time
outstanding and entitled to vote, and (b) by the vote of a
majority of the Trustees who are not parties to this Agreement
or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such
approval. Notwithstanding the foregoing, this Agreement may be
terminated by the Trust at any time, without the payment of any
penalty, upon giving the Advisor 60 days' notice (which notice
may be waived by the Advisor), provided that such termination by
the Trust shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or
by the vote of the holders of a majority of the voting
securities of the Trust at the time outstanding and entitled to
vote, or by the Advisor on 60 days' written notice (which notice
may be waived by the Trust). This Agreement will also
immediately terminate in the event of its assignment. As used in
this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the
same meanings of such terms in the 1940 Act.
13. NOTICES. Any notice under this Agreement shall be in writing to
the other party at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on the
earlier of the date actually received or on the fourth day after the postmark
if such notice is mailed first class postage prepaid; all notices sent by the
Advisor to the Trust shall also be sent to Advent at the address that it may
designate from time to time.
14. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. Any amendment of this Agreement
shall be subject to the 1940 Act.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware for contracts to be
performed entirely therein without reference to choice of law principles
thereof and in accordance with the applicable provisions of the 1940 Act.
16. USE OF THE NAME CLAYMORE. The Advisor has consented to the use by
the Trust of the name or identifying word "Claymore" in the name of the Trust.
Such consent is conditioned upon the employment of the Advisor, any successor
thereto or any affiliate thereof as the investment advisor to the Trust. The
name or identifying word "Claymore" may be used from time to time in other
connections and for other purposes by the Advisor and any of its affiliates.
The Advisor may require the Trust to cease using "Claymore" in the name of the
Trust if the Trust ceases to employ, for any reason, the Advisor, any
successor thereto or any affiliate thereof as investment advisor of the Trust.
17. MISCELLANEOUS. The captions in 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. This Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective successors.
18. COUNTERPARTS. This Agreement may be executed in counterparts by
the parties hereto, each of which shall constitute an original counterpart,
and all of which, together, shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
ADVENT CLAYMORE GLOBAL CONVERTIBLE & INCOME FUND
By:
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Name: Xxxx Xxxxxx
Title: Secretary
CLAYMORE ADVISORS, LLC
By:
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Name: Xxxxxxxx Xxxxxxx
Title: Senior Managing Director
and General Counsel
