EXHIBIT (j)(3)
FORM OF ADMINISTRATION AGREEMENT
The Administration Agreement of XXXXXXXX & XXXXXXXX/CLAYMORE TOTAL RETURN
FUND INCORPORATED, a Maryland corporation (the "Fund") made and agreed to by and
between the Fund and PFPC Inc., a Massachusetts corporation ("PFPC"), on
_____________, 2003, to read in its entirety as follows:
WHEREAS, the Fund is registered as a diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund desires to retain PFPC to render certain administrative
services to the Fund and PFPC is willing to render such services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints PFPC to act as Administrator of the
Fund on the terms set forth in this Agreement. PFPC accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Fund has furnished PFPC with copies properly
certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Directors authorizing the
appointment of PFPC to provide certain administrative services to
the Fund and approving this Agreement;
(b) The Fund's Articles of Incorporation filed with the Maryland
Department of Assessments and Taxation on June 23, 2003 and all
amendments thereto (the "Articles");
(c) The Fund's By-Laws and all amendments thereto (the "By-Laws");
(d) The Investment Advisory Agreement between Xxxxxxxx & Xxxxxxxx
Incorporated (the "Adviser") and the Fund dated as of _________,
2003 as amended and restated from time to time (the "Advisory
Agreement");
(e) The Custody Agreement between PFPC Trust Company and the Fund
dated as of __________, 2003 as amended and restated from time to
time (the "Custody Agreement");
(f) The Transfer Agency and Registrar Agreement between PFPC and the
Fund dated as of __________, 2003 as amended and restated from
time to time;
(g) The Fund's most recent Registration Statement on Form N-2 (the
"Registration Statement") under the Securities Act of 1933 and
under the 1940 Act (File Nos. 333-91282 and 811-21129), as filed
with the Securities and Exchange Commission ("SEC") on _________,
2003 relating to shares of the Fund's Common Stock, $.01 par
value per share, and all amendments thereto; and
(h) The Fund's most recent prospectus (the "Prospectus").
The Fund will furnish PFPC from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, the Fund will provide PFPC with any other documents
that PFPC may reasonably request and will notify PFPC as soon as possible
of any matter materially affecting the performance of PFPC of its services
under this agreement.
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3. DUTIES AS ADMINISTRATOR. Subject to the supervision and direction of the
Board of directors of the Fund, PFPC, as Administrator, will assist in
supervising various aspects of the Fund's administrative operations and
undertakes to perform the following specific services:
(a) Maintaining office facilities (which may be in the offices of
PFPC or a corporate affiliate);
(b) Furnishing statistical and research data, data processing
services, clerical services, and regulatory administration,
executive the administrative services and stationery and office
supplies in connection with the foregoing;
(c) Furnishing corporate secretarial services including preparation
and distribution of materials for Board of Directors meetings;
(d) Accounting and bookkeeping services (including the maintenance of
such accounts, books and records of the Fund as may be required
by section 31(a) of the 1940 Act and the rules thereunder);
(e) Internal auditing;
(f) Valuing the Fund's assets and calculating the net asset value of
the shares of the Fund at the close of trading on the New York
Stock Exchange (the "NYSE") on the last day on which the NYSE is
open for trading of each week and month and at such other times
as the Board of Directors may reasonably request;
(g) Accumulating information for and, subject to approval by the
Fund's Treasurer, preparing reports to the Fund's shareholders of
record and the
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SEC including, but not necessarily limited to, Annual Reports and
Semi-Annual Reports on Form N-SAR;
(h) Preparing and filing various reports or other documents required
by federal, state and other applicable laws and regulations and
by stock exchanges on which the shares of the Fund are listed,
other than those filed or required to be filed by the Adviser or
Transfer Agent;
(i) Preparing and filing the Fund's tax returns;
(j) Assisting the Adviser, at the Adviser's request, in monitoring
and developing compliance procedures for the Fund which will
include, among other matter, procedures to assist the Adviser in
monitoring compliance with the Fund's investment objective,
policies, restrictions, tax matters and applicable laws and
regulations;
(k) Preparing and furnishing the Fund (at the Fund's request) with
the performance information (including yield and total return
information) calculated in accordance with applicable U.S.
securities laws and reporting to external databases such
information as may reasonably be requested; and
(l) Upon request from the Fund (which request may be a standing
request), PFPC will arrange for the sweep of the Fund's daily net
excess cash balance in accordance with written instructions
(which may be standing instructions) acceptable to PFPC which are
received from or on behalf of the Fund.
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In performing all services under this Agreement, PFPC shall act in
conformity with the Fund's Articles and By-Laws; the 1940 Act and the
Investment Advisers Act of 1940, as the same may be amended from time to
time; and the investment objective, investment policies and other practices
and policies set forth in the Fund's Registration Statement as such
Registration Statement and practices and policies may be amended from time
to time.
4. ALLOCATION OF EXPENSES. PFPC shall bear all expenses in connection with the
performance of its services under this Agreement.
(a) PFPC will from time to time employ or associate with itself such
person or persons as PFPC may believe to be particularly suited
to assist it in performing services under this Agreement. Such
person or persons may be officers and employees who are employed
by both PFPC and the Fund. The compensation of such person or
persons shall be paid by PFPC and no obligation shall be incurred
on behalf of the Fund in such respect.
(b) PFPC shall not be required to pay any of the following expenses
incurred by the Fund: membership dues in the Investment Company
Institute or any similar organization; investment advisory
expenses; costs of printing and mailing stock certificates,
prospectuses, reports and notices; interest on borrowed money;
brokerage commissions; taxes and fees payable to Federal, state
and other governmental agencies; fees of Directors of the Fund
who are not affiliated with PFPC; outside auditing expenses;
outside legal expenses; or other expenses not specified in this
Section 4 which may be properly payable by the Fund.
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(c) For the services to be rendered, the facilities to be furnished
and the payments to be made by PFPC, as provided for in this
Agreement, the Fund will pay PFPC the fees in accordance with the
Fee Agreement between the Fund and PFPC.
(d) The Fund will compensate PFPC for its services rendered pursuant
to this Agreement in accordance with the fees set forth above.
Such fees do not include out-of-pocket disbursements of PFPC.
PFPC shall be entitled to xxxx the Fund for such out-of-pocket
expenses only upon the prior written approval of the Fund.
(e) PFPC will xxxx the Fund as soon as practicable after the end of
each calendar month, and said xxxxxxxx will be detailed in
accordance with the out-of-pocket schedule. The Fund will
promptly pay to PFPC the amount of such billing.
5. LIMITATION OF LIABILITY. PFPC shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with
the performance of its obligations and duties under this Agreement, except
a loss resulting from PFPC willful misfeasance, bad faith or gross
negligence in the performance of such obligations and duties, or by reason
of its reckless disregard thereof. The Fund will indemnify PFPC against and
defend and hold it harmless from any and all losses, claims, damages,
liabilities of expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit not resulting from the
willful misfeasance, bad faith or gross negligence of PFPC in the
performance of such obligations and duties or by reason of its reckless
disregard thereof.
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6. TERMINATION OF AGREEMENT.
(a) This Agreement shall become effective on the date hereof and
shall remain in force from year to year so long as such
continuance is specifically approved at least annually by the
Board of Directors of the Fund or unless terminated pursuant to
the provisions of subsection (b) of this Section 6.
(b) This Agreement may be terminated at any time without payment of
any penalty, upon 60 days' written notice, by vote of the holders
of a majority of the outstanding voting securities of the Fund,
or by vote of a majority of the Board of Directors of the Fund,
or by the PFPC.
7. AMENDMENT TO THIS AGREEMENT. No provisions of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change,
discharge or termination is sought.
8. MISCELLANEOUS.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or PFPC shall be
sufficiently given if addressed to that party and received by it
at its office set forth below or at such other place as it may
from time to time designate in writing.
To the Fund:
Xxxxxxxx & Xxxxxxxx/Claymore Total Return Fund Incorporated
c/x Xxxxxxxx & Xxxxxxxx Incorporated
000 X. Xxxxxxxx Xxxx-Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
To PFPC:
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PFPC Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention:
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
without the written consent of the other party.
(c) This Agreement shall be deemed to be a contract made in Delaware
and governed by Delaware law, without regard to principles of
conflicts of law.
(d) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively
shall be deemed to constitute shall be deemed to constitute only
one instrument.
(e) 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.
(f) Neither party shall be liable or responsible for delays or errors
by acts of God or by reason of circumstances beyond its control,
including acts of civil or military authority, acts of terrorism,
national emergencies, labor difficulties, mechanical breakdown,
insurrection, war, riots, or failure or unavailability of
transportation, communication or power supply, fire, flood or
other catastrophe.
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9. CONFIDENTIALITY. All books, records, information and data pertaining to the
business of the Fund that are exchanged or received pursuant to the
performance of PFPC duties under this Agreement shall remain confidential
and shall not be voluntarily disclosed to any other person, except as
specifically authorized by the Fund or as may be required by law.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date,
first written above.
PFPC INC.
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By
Title:
XXXXXXXX & XXXXXXXX/CLAYMORE
TOTAL RETURN FUND INCORPORATED
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By
Title:
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