Exhibit (k)(8)
UNDERWRITER PARTICIPATION AGREEMENT
This Agreement, dated as of August 26, 2003, is entered into between
Xxxxxxxx & Xxxxxxxx/Claymore Total Return Fund Incorporated (the "Fund") and
Claymore Securities, Inc. ("Claymore") with respect to certain distribution
assistance to be provided by Claymore to the Fund, limited exclusively to
providing offering and marketing materials and additional information to
registered broker-dealers who are part of the underwriting syndicate publicly
offering common shares (the "Common Shares") of the Fund. In consideration of
their mutual promises, the parties agree as follows:
1. STATUS OF CLAYMORE
(a) Claymore represents and warrants to the Fund that:
(i) It is a broker-dealer registered as such with the Securities
and Exchange Commission (the "SEC") and is registered or
qualified in all capacities and jurisdictions required by
reason of any participation in the distribution of the Common
Shares and any Preferred Shares of the Fund (collectively, the
"Shares") by it while providing the services described above
and each employee or agent of Claymore who participates in the
distribution of Shares has all necessary licenses and
qualifications in all capacities and jurisdictions required by
reason of any participation in a distribution of Shares
pursuant to this Agreement.
(ii) It is a registered broker-dealer and is a member of the
National Association of Securities Dealers, Inc. (the "NASD")
and it agrees to abide by all of the rules and regulations of
the NASD in connection with the participation in the
distribution of Shares including, without limitation, the NASD
Rules of Fair Practice. Claymore agrees to notify the Fund in
writing immediately in the event of (1) its expulsion or
suspension from the NASD, or (2) its being found to have
violated any applicable federal or state law, rule or
regulation arising out of its activities as a broker-dealer or
in connection with this Agreement, or which may otherwise
affect in any material way its ability to act in accordance
with the terms of this Agreement. Claymore's expulsion from
the NASD will automatically terminate this Agreement
immediately without notice. Suspension of Claymore from the
NASD for violation of any applicable federal or state law,
rule or regulation will terminate this Agreement effective
immediately upon the Fund's written notice of termination to
Claymore.
(iii) It is familiar with and understands the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and has
substantial experience with offers and sales of securities by
issuers involving a public offering under the 1933 Act.
(iv) It is a corporation duly organized and validly existing in
good standing
under the laws of the jurisdiction in which it is organized.
(b) The Fund assumes no obligation or responsibility as to Claymore's
right to participate in the distribution of the Fund's Shares in any
jurisdiction. If Claymore, while performing the services it provides the Fund
hereunder, becomes subject to the laws of any non-U.S. jurisdiction, Claymore
will take, at its own expense, such action, if any, as may be necessary to
comply with the laws of such non-U.S. jurisdictions.
(c) Claymore agrees that it will maintain the registrations,
qualifications, exemptions and memberships referred to in paragraphs (a) and (b)
in good standing and in full force and effect throughout the term of this
Agreement.
2. CLAYMORE'S COVENANTS.
(a) Claymore covenants and agrees that, in connection with providing the
services as described above, Claymore will engage in the permitted activities
solely with registered broker-dealers, and will not participate in any
distribution of Shares to any person that is not a registered broker-dealer, and
will not offer Shares, or solicit offers for Shares, of the Fund.
(b) Claymore covenants and agrees that it will not make any
representations or provide any information to any person concerning the Fund
other than those contained in the Fund's registration statement on Form N-2 (the
"Registration Statement") or any marketing materials approved by the Fund and
the Fund's investment adviser, Xxxxxxxx & Xxxxxxxx Incorporated (the "Investment
Adviser").
(c) Claymore covenants and agrees to use information provided by the Fund
or the Investment Adviser only in the manner intended (e.g., documents marked
"internal use only" will not be disseminated to any person other than a
registered broker-dealer).
(d) Claymore covenants that the execution and delivery of this Agreement
and the performance of its services contemplated hereby (i) have been duly
authorized by all necessary action and all other authorizations and approvals
(if any) required for its lawful execution and delivery of this Agreement and
its performance hereunder have been obtained and (ii) does not and will not
violate any federal or state laws, rules or regulations.
3. INDEPENDENT CONTRACTOR.
The Fund shall not be liable for any acts of Claymore or any employee
or agent of Claymore, and nothing contained herein shall be construed as
creating, or be deemed to create, the relationship of employer and employee
between the parties, nor any agency, joint venture, or partnership. Claymore
shall at all times be and be deemed to be an independent contractor. Claymore,
its employees and agents shall, under no circumstances, have any authority to
act for or to bind the Investment Adviser or the Fund in any way or to sign the
name of the Investment Adviser or the Fund or to represent that the Investment
Adviser or the Fund is in any way responsible for the acts or omissions of
Claymore. Claymore shall not be required to devote any minimum amount of time to
performing its obligations under this Agreement.
4. REPRESENTATIONS AND WARRANTIES BY THE FUND. The Fund represents and
warrants to
2
Claymore as of the date hereof as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act, or order of suspension or revocation of registration pursuant to
Section 8(e) of the Investment Company Act of 1940, as amended (the "1940 Act"),
and no proceedings for any such purpose have been instituted or are pending or,
to the knowledge of the Fund, are contemplated by the SEC, and any request on
the part of the SEC for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective, the Registration Statement, the Rule 462(b) Registration Statement,
the notification of Form N-8A and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of the
1933 Act and the 1940 Act and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither the
prospectus nor any amendments or supplements thereto, at the time the prospectus
or any such amendment or supplement was issued, included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 497 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act and each preliminary prospectus and the
prospectus delivered to Claymore for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the SEC
pursuant to XXXXX, except to the extent permitted by Regulation S-T. If a Rule
462(b) Registration Statement is required in connection with the offering and
sale of the Common Shares, the Fund has complied or will comply with the
requirements of Rule 111 under the 1933 Act relating to the payment of filing
fees thereof.
(b) INDEPENDENT ACCOUNTS. The accountants who certified the statement of
assets and liabilities included in the Registration Statement are independent
public accountants as required by the 1933 Act.
(c) FINANCIAL STATEMENTS. The statement of assets and liabilities included
in the Registration Statement and the prospectus, together with the related
notes, presents fairly the financial position of the Fund at the date indicated;
and said statement has been prepared in conformity with U.S. generally accepted
accounting principles ("GAAP").
(d) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of which
information is given in the Registration Statement and the prospectus, except as
otherwise stated therein, (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Fund, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (ii) there have been no transactions
3
entered into by the Fund, other than those in the ordinary course of business,
which are material with respect to the Fund, and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Fund on any
class of its capital stock.
(e) GOOD STANDING OF THE FUND. The Fund has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Maryland and has corporation power and authority to own, lease and operate
its properties and to conduct its business as described in the prospectus and to
enter into and perform its obligations under this Agreement; and the Fund is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
(f) NO SUBSIDIARIES. The Fund has no subsidiaries.
(g) INVESTMENT COMPANY STATUS. The Fund is duly registered with the SEC
under the 1940 Act as a closed-end, diversified management investment company,
and no order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or threatened by the Commission.
(h) CAPITALIZATION. The authorized, issued and outstanding shares of
common stock of the Fund is as set forth in the prospectus as of the date
thereof in the Statement of Assets and Liabilities as of August __, 2003. All
issued and outstanding shares of common stock of the Fund have been duly
authorized and validly issued and are fully paid and non-assessable, and have
been offered and sold or exchanged by the Fund in compliance with all applicable
laws (including, without limitation, federal and state securities laws); none of
the outstanding shares of common stock of the Fund were issued in violation of
the preemptive or other similar rights of any securityholder of the Fund.
(i) DESCRIPTION OF COMMON SHARES. The Common Shares conform in all material
respects to all statements relating thereto contained in the prospectus and such
description conforms in all material respects to the rights set forth in the
instruments defining the same; no holder of the Common Shares will be subject to
personal liability by reason of being such a holder; and the issuance of the
Common Shares is not subject to the preemptive or other similar rights of any
securityholder of the Fund.
(j) ABSENCE OF DEFAULTS AND CONFLICTS. The Fund is not in violation of its
articles of incorporation or by-laws, or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by which it may
be bound, or to which any of the property or assets of the Fund is subject
(collectively, "Agreements and Instruments") except for such violations or
defaults that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement and
compliance by the Fund with its obligations hereunder have been duly authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or
4
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Fund (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not result in
a Material Adverse Effect), nor will such action result in any violation of the
provisions of the articles of incorporation or by-laws of the Fund or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Fund or any of its assets, properties or operations.
(k) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Fund, threatened,
against or affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties or
assets of the Fund or the consummation of the transactions contemplated in this
Agreement or the performance by the Fund of its obligations hereunder. The
aggregate of all pending legal or governmental proceedings to which the Fund is
a party or of which any of its property or assets is the subject which are not
described in the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(l) ACCURACY OF EXHIBITS. There are no contracts or documents which are
required to be described in the Registration Statement or the prospectus or to
be filed as exhibits thereto by the 1933 Act or the 1940 Act which have not been
so described and filed as required.
(m) POSSESSION OF INTELLECTUAL PROPERTY. The Fund owns or possesses, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by the Fund, and the Fund has not received any notice or
is not otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Fund therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
(n) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
consummation of the transactions contemplated by this Agreement, except such as
have been already obtained or as may be required under the 1933 Act, the 1940
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or under
the rules of the NASD.
(o) POSSESSION OF LICENSES AND PERMITS. The Fund possesses such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to operate
5
its properties and to conduct the business as contemplated in the Prospectus;
the Fund is in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and the Fund has not
received any notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(p) SUBCHAPTER M. The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement in such a
manner as to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended ("Subchapter M of the Code" and the "Code,"
respectively), and intends to qualify as a regulated investment company under
Subchapter M of the Code.
(q) ACCOUNTING CONTROLS. The Fund maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization and with the applicable requirements of the 1940 Act and the Code;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets and to maintain compliance with the books and
records requirements under the 1940 Act; (iii) access to assets is permitted
only in accordance with the management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(r) ABSENCE OF UNDISCLOSED PAYMENTS. To the Fund's knowledge, neither the
Fund nor any employee or agent of the Fund has made any payment of funds of the
Fund or received or retained any funds, which payment, receipt or retention of
funds is of a character required to be disclosed in the prospectus.
(s) REGISTRATION RIGHTS. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Fund under the 1933 Act.
(t) NYSE LISTING. The Common Shares have been duly authorized for listing,
upon notice of issuance, on the New York Stock Exchange ("NYSE') and the Fund's
registration statement on Form 8-A under the 1934 Act has become effective.
5. COVENANTS OF THE FUND.
(a) The Fund covenants with Claymore as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Fund, subject to Section 5(a)(ii), will comply
with the requirements of Rule 430A or Rule 434, as applicable,
and will notify Claymore immediately, and confirm the notice
in writing, (A) when any post-effective
6
amendment to the Registration Statement shall become
effective, or any supplement to the prospectus or any amended
prospectus shall have been filed, (B) of the receipt of any
comments from the SEC, (C) of any request by the SEC for any
amendment to the Registration Statement or any amendment or
supplement to the prospectus or statement of additional
information and (D) of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the
qualification of the Common Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Fund will promptly
effect the filings necessary pursuant to Rule 497 and will
take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under
Rule 497 was received for filing by the SEC and, in the event
that it was not, it will promptly file such prospectus. The
Fund will make every reasonable effort to prevent the issuance
of any stop order, or order of suspension or revocation of
registration pursuant to Section 8(e) of 1940 Act and, if any
such stop order or order of suspension or revocation of
registration is issued, to obtain the lifting thereof at the
earliest possible moment.
(ii) FILING OF AMENDMENTS. The Fund will give Claymore notice of
its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule
462(b)), any term sheet or any amendment, supplement or
revision to the prospectus included in the Registration
Statement at the time it became effective, and will furnish
Claymore with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may
be.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Fund has furnished or
will deliver to Claymore, without charge, signed copies of the
Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to
Claymore, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto
(without exhibits). The copies of the Registration Statement
and each amendment thereto furnished to Claymore will be
identical to the electronically transmitted copies thereof
filed with the SEC pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(iv) DELIVERY OF PROSPECTUSES. The Fund has delivered to Claymore,
without charge, as many copies of each preliminary prospectus
as Claymore reasonably requested, and the Fund hereby consents
to the use of such copies for purposes permitted by the 1933
Act, except as provided in Section 2(a) of this Agreement. The
Fund will furnish to Claymore, without charge, during the
period when the prospectus is required to be
7
delivered under the 1933 Act or the 1934 Act, such number of
copies of the prospectus (as amended or supplemented) as
Claymore may reasonably request. The prospectus and any
amendments or supplements thereto furnished to Claymore will
be identical to the electronically transmitted copies thereof
filed with the SEC pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(v) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time it
shall be necessary, in the opinion of the Fund's counsel, to
amend the Registration Statement or amend or supplement the
prospectus in order to comply with the requirements of the
1933 Act, the Fund will promptly prepare and file with the
SEC, such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration
Statement or the prospectus comply with such requirements, and
the Fund will furnish to Claymore such number of copies of
such amendment or supplement as Claymore may reasonably
request.
(vi) BLUE SKY QUALIFICATIONS. The Fund will use its best efforts,
in cooperation with Claymore, to qualify the Common Shares for
offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as
Claymore may designate and to maintain such qualifications in
effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that
the Fund shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Common
Shares have been so qualified, the Fund will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration
Statement.
(vii) RULE 158. The Fund will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(viii) USE OF PROCEEDS. The Fund will use the net proceeds received
by it from the sale of the Common Shares in the manner
specified in the prospectus under "Use of Proceeds."
(ix) LISTING. The Fund will use its reasonable best efforts to
effect the listing of the Common Shares on the NYSE, subject
to notice of issuance, concurrently with the effectiveness of
the Registration Statement.
8
(x) REPORTING REQUIREMENTS. The Fund, during the period when the
prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed
with the SEC pursuant to the 1940 Act and the 1934 Act within
the time periods required by the 1940 Act and the 1934 Act and
the rules and regulations of the SEC thereunder, respectively.
(xi) RULE 462(b) REGISTRATION STATEMENT. If the Fund elects to rely
upon Rule 462(b), the Fund shall file a Rule 462(b)
Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement, and the Fund shall at the time of filing
either pay to the SEC the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the 1933
.Act.
6. STANDARD OF CARE.
Claymore shall perform its duties and obligations hereunder as a
reasonable person in like circumstances would perform such duties and
obligations.
7. INDEMNIFICATION.
(a) Claymore shall indemnify and hold harmless the Fund and its
affiliates, shareholders, officers, directors, agents and employees from and
against any losses, claims, damages, liabilities or expenses (including
reasonable attorneys' fees and expenses) to which they may become subject
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon: (i) any breach by Claymore of
any provision of this Agreement; (ii) any willful misfeasance or negligence by
Claymore in the performance of its duties and obligations hereunder, (iii) any
violation of any applicable law by Claymore, its employees, agents or
representatives; or (iv) any acts or omissions of the Fund and its affiliates,
partners, shareholders, officers, directors, agents and employees taken or not
taken, as the case may be, in reliance upon any untrue statement or alleged
untrue statement of a material fact contained in the Fund's Registration
Statement or any amendment thereto, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or final prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, regarding Claymore and the services it provides the
Fund.
(b) The Fund shall indemnify and hold harmless Claymore and its
affiliates, shareholders, officers, directors, agents and employees from and
against any and all losses, claims, damages, liabilities or expenses (including
reasonable attorneys' fees and expenses) to which it may become subject insofar
as such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) arise out of or are based upon: (i) any breach by the Fund of any
provision of this Agreement; (ii) any willful misfeasance or gross negligence by
the Fund in the
9
performance of its duties and obligations hereunder; or (iii) any violation of
any applicable law by the Fund, its employees, agents or representatives.
(c) The indemnified party (the "Indemnified Party") shall give notice to
the other party (the "Indemnifying Party") promptly after the summons or other
first legal process is served on the Indemnified Party for any claim, notice of
claim or arbitration demand as to which indemnity may be sought pursuant to
paragraphs (a) and (b) of this Section 7. The Indemnified Party shall assume the
defense of any such claim or any litigation resulting from it, provided that the
Indemnifying Party may participate in such defense at its own expense. The
failure of the Indemnified Party to give notice as provided in this paragraph
(c) shall not relieve the Indemnifying Party from any liability unless such
failure to give proper notice materially prejudices the Indemnifying Party's
ability to defend the claim. No Indemnifying Party, in the defense of any such
claim or litigation, shall, without the consent of the Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
litigation.
(d) The provisions of this Section 7 shall survive the termination of this
Agreement.
8. FEES.
Claymore shall be compensated as follows: if (A) the aggregate
organizational and offering costs and expenses (other than the sales load) with
respect to the Fund and (B) the aggregate travel and marketing costs and
expenses of the parties and the Underwriters of the offering (the aggregate
costs and expenses in (A) and (B) being the "Total Expenses") are less than
$0.05 per share of Common Stock sold in the offering (including all shares sold
pursuant to the exercise of any over-allotment option granted to the
underwriters) (the "Reimbursement Cap"), the Fund (and not the Investment
Adviser) will pay to Claymore as payment for distribution assistance up to 0.10%
of the net proceeds of the offering up to, but not exceeding, the difference
between the Total Expenses and the Reimbursement Cap. At no time will the Fund
or the Investment Adviser be responsible for all or any portion of this payment
if the Total Expenses exceed the Reimbursement Cap.
9. NOTICES.
Except as otherwise specifically provided in this Agreement, all
notices required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified first class mail, return receipt requested, nationally
recognized overnight courier service, or by facsimile, electronic mail or
similar means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to the Fund and
Claymore shall be given or sent to the addresses set forth below.
10
If to the Fund:
Xxxxxxxx & Xxxxxxxx/Claymore Total Return Fund
000 Xxxx Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
tel: (000) 000-0000
fax: (000) 000-0000
email: xxxxxxxx@xxx-xxxx.xxx
If to Claymore:
Claymore Securities, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
tel: 000.000.0000
fax: 000.000.0000
e-mail: xxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
10. TERMINATION AND AMENDMENT.
(a) This Agreement shall become effective as of the date set forth above
and may be terminated by the Fund upon 30 days notice in writing to Claymore;
provided, that this Agreement shall be deemed automatically terminated upon the
termination of the Servicing Agreement dated as of August 26, 2003 between the
Fund and Claymore.
(b) This Agreement may be amended only by a writing signed by the parties
hereto.
11. MISCELLANEOUS.
(a) This Agreement sets forth the entire Agreement between the parties
hereto and replaces and supersedes all other understandings, commitments, and
agreements relating to the subject matter hereto.
(b) This Agreement may be assigned only with the prior written consent of
the other parties hereto.
(c) No waiver of any provision of this Agreement or the performance
thereof shall be effective unless in writing signed by the party making such
waiver or shall be deemed to be a waiver of any other provision or the
performance thereof or of any future performance.
(d) If any provision of this Agreement is determined to be unenforceable,
the remaining provisions shall remain enforceable to the extent permissible.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
11
(f) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without reference to the conflict of laws
principles thereof.
12
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
XXXXXXXX & XXXXXXXX/CLAYMORE TOTAL RETURN FUND INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
CLAYMORE SECURITIES, INC.
By: /s/ Xxxxxxxx Xxxxxxx
--------------------
Name: Xxxxxxxx Xxxxxxx
Title: Chief Operations Officer and General Counsel
