Exhibit 99(k)(7)
MBIA CAPITAL/CLAYMORE MANAGED DURATION
INVESTMENT GRADE MUNICIPAL FUND
THE BANK OF NEW YORK,
as Auction Agent
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FORM OF BROKER-DEALER AGREEMENT
dated as of October __, 2003
Relating to
Auction Market Preferred Stock ("AMPS")
Series M7 and Series M28
of
MBIA CAPITAL/CLAYMORE MANAGED DURATION
INVESTMENT GRADE MUNICIPAL FUND
----------
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of October __, 2003, is between The
Bank of New York, a New York banking corporation (the "Auction Agent") (not in
its individual capacity, but solely as agent of MBIA CAPITAL/CLAYMORE MANAGED
DURATION INVESTMENT GRADE MUNICIPAL FUND (the "Fund"), pursuant to authority
granted to it in the Auction Agency Agreement dated as of October __, 2003,
between the Fund and the Auction Agent (the "Auction Agency Agreement")) and
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED (together with its successors
and assigns, "BD").
The Fund proposes to issue two series of auction market preferred stock,
par value $.001 per share, designated Auction Market Preferred Stock, Series M7,
liquidation preference $25,000 per share and Auction Market Preferred Stock,
Series W28, liquidation preference $25,000 per share (collectively, the "AMPS"),
pursuant to the Fund's Statement (as defined below).
The Fund's Statement provides that for each subsequent Dividend Period of
AMPS then outstanding, the Applicable Rate for each series of AMPS for each
subsequent Dividend Period shall be equal to the rate per annum that results
from an Auction for outstanding shares of each series of AMPS on the respective
Auction Date therefor. The Board of Trustees of the Fund has adopted a
resolution appointing The Bank of New York as Auction Agent for purposes of the
Auction Procedures, and pursuant to Section 2.5 of the Auction Agency Agreement,
the Fund has requested and directed the Auction Agent to execute and deliver
this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Auction Agent and BD agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 TERMS DEFINED BY REFERENCE TO THE STATEMENT.
Capitalized terms not defined herein shall have the respective meanings
specified in the Statement.
1.2 TERMS DEFINED HEREIN.
As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
(a) "Auction" shall have the meaning specified in Section 2.1 of
the Auction Agency Agreement.
(b) "Auction Procedures" shall mean the Auction Procedures that
are set forth in Paragraph 10 of the Statement.
(c) "Authorized Officer" of the Auction Agent shall mean each Vice
President, Assistant Vice President and Assistant Treasurer of the Auction Agent
and every other officer or employee of the Auction Agent designated as an
"Authorized Officer" for purposes of this Agreement in a written communication
to BD.
(d) "BD Officer" shall mean each officer or employee of BD
designated as a "BD Officer" for purposes of this Agreement in a communication
to the Auction Agent.
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(e) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
(f) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit A.
(g) "Statement" shall mean the Statement of Preferences for
Preferred Shares of the Fund specifying the powers, preferences and rights of
the AMPS.
1.3 RULES OF CONSTRUCTION.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement
and the Settlement Procedures:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New York City time.
II. NOTIFICATION OF DIVIDEND.
The provisions contained in Paragraph 2 of the Statement concerning the
notification of a Special Dividend Period will be followed by the Auction Agent
and BD, and the provisions contained therein are incorporated herein by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions were set forth fully herein.
III. THE AUCTION.
3.1 PURPOSE; INCORPORATION BY REFERENCE OF AUCTION PROCEDURES AND
SETTLEMENT PROCEDURES.
(a) On each Auction Date, the provisions of the Auction Procedures
will be followed by the Auction Agent for the purpose of determining the
Applicable Rate for the AMPS, for each Dividend Period. Each periodic operation
of such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and
the Settlement Procedures are incorporated herein by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions were set forth fully herein.
(c) BD agrees to act as, and assumes the obligations of and
limitations and restrictions placed upon, a Broker-Dealer under this Agreement.
BD understands that other Persons meeting the requirements specified in the
definition of "Broker-Dealer" contained in Paragraph 1 of the Statement may
execute a Broker-Dealer Agreement and participate as Broker-Dealers in Auctions.
(d) BD and other Broker-Dealers may participate in Auctions for
their own accounts. However, the Fund, by notice to BD and all other Broker
Dealers, may prohibit all Broker-Dealers from
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submitting Bids in Auctions for their own accounts, PROVIDED that Broker-Dealers
may continue to submit Hold Orders and Sell Orders.
3.2 PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 A.M. on each Auction Date for the AMPS,
the Auction Agent shall advise BD by telephone or other electronic means of
communication acceptable to the parties of the Maximum Applicable Rate in effect
on such Auction Date.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent has given the notice referred to in clause (vii)
of paragraph (a) of the Settlement Procedures, the Auction Agent, by such means
as the Auction Agent deems practicable, shall give notice of such change to BD
not later than the earlier of 9:15 A.M. on the new Auction Date or 9:15 A.M. on
the old Auction Date. Thereafter, BD promptly shall notify customers of BD that
BD believes are Beneficial Owners of shares of Series M7 AMPS and Series W28
AMPS as the case may be, of such change in the Auction Date.
(c) The Auction Agent from time to time may, but shall not be
obligated to, request BD to provide it with a list of the respective customers
BD believes are Beneficial Owners of AMPS. BD shall comply with any such
request, and the Auction Agent shall keep confidential any such information,
including information received as to the identity of Bidders in any Auction, and
shall not disclose any such information so provided to any Person other than the
Fund; and such information shall not be used by the Auction Agent or its
officers, employees, agents or representatives for any purpose other than such
purposes as are described herein; provided, however, that the Auction Agent
reserves the right and is authorized to disclose any such information if (a) it
is ordered to do so by a court of competent jurisdiction or a regulatory body,
judicial or quasi-judicial agency or authority having the authority to compel
such disclosure, (b) it is advised by its counsel that its failure to do so
would be unlawful or (c) failure to do so would expose the Auction Agent to
loss, liability, claim, damage or expense for which it has not received
indemnity or security satisfactory to it. In the event that the Auction Agent is
required to disclose information in accordance with the foregoing sentence, it
shall provide written notice of such requirement to BD as promptly as
practicable. The Auction Agent shall, subject to the terms of the Auction Agency
Agreement, transmit any list of customers BD believes are Beneficial Owners of
AMPS and information related thereto only to its officers, employees, agents or
representatives who need to know such information for the purposes of acting in
accordance with this Agreement, and the Auction Agent shall prevent the
transmission of such information to others and shall cause its officers,
employees, agents and representatives to abide by the foregoing confidentiality
restrictions; PROVIDED, HOWEVER, that the Auction Agent shall have no
responsibility or liability for the actions of any of its officers, employees,
agents or representatives after they have left the employ of the Auction Agent.
3.3 AUCTION SCHEDULE; METHOD OF SUBMISSION OF ORDERS.
(a) The Fund and the Auction Agent shall conduct Auctions for AMPS
in accordance with the schedule set forth below. Such schedule may be changed at
any time by the Auction Agent with the consent of the Fund, which consent shall
not be withheld unreasonably. The Auction Agent shall give notice of any such
change to BD. Such notice shall be received prior to the first Auction Date on
which any such change shall be effective.
TIME EVENT
---- -----
By 9:30 A.M. Auction Agent shall advise the Fund and
the Broker-Dealers of the
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TIME EVENT
---- -----
Maximum Applicable Rate as set forth in
Section 3.2(a) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Paragraph 10(c)(i) of the
Statement. Submission Deadline is
1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent shall make determinations
pursuant to Paragraph 10(d)(i) of the
Statement.
By approximately 3:30 P.M. (and not Auction Agent shall advise the Fund of
later than the close of business) the results of the Auction as provided
in Paragraph 10(d)(ii) of the Statement.
Submitted Bids and Submitted Sell Orders
will be accepted and rejected in whole
or in part and AMPS will be allocated as
provided in Paragraph 10(e) of the
Statement.
Auction Agent shall give notice of the
Auction results as set forth in
Section 3.4(a) hereof.
(b) BD agrees to maintain a list of Potential Beneficial Owners
and to contact the Potential Beneficial Owners on such list on or prior to each
Auction Date for the purposes set forth in Paragraph 10 of the Statement.
(c) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit B. BD shall submit separate
Orders to the Auction Agent for each Potential Beneficial Owner or Beneficial
Owner on whose behalf BD is submitting an Order and shall not net or aggregate
the Orders of Potential Beneficial Owners or Beneficial Owners on whose behalf
BD is submitting Orders.
(d) BD shall deliver to the Auction Agent (i) a written notice,
substantially in the form attached hereto as Exhibit C, of transfers of AMPS,
made through BD by an Existing Holder to another Person other than pursuant to
an Auction, and (ii) a written notice, substantially in the form attached hereto
as Exhibit D, of the failure of AMPS to be transferred to or by any Person that
purchased or sold AMPS through BD pursuant to an Auction. The Auction Agent is
not required to accept any notice delivered pursuant to the terms of the
foregoing sentence with respect to an Auction unless it is received by the
Auction Agent by 3:00 P.M. on the Business Day next preceding the applicable
Auction Date.
3.4 NOTICE OF AUCTION RESULTS.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone or other mutually acceptable electronic means as set forth in
paragraph (a) of the Settlement Procedures. On the Business Day next succeeding
such Auction Date, the Auction Agent shall notify BD in writing of the
disposition of all Orders submitted by BD in the Auction held on such Auction
Date.
(b) BD shall notify each Beneficial Owner, Potential Beneficial
Owner, Existing Holder or Potential Holder on whose behalf BD has submitted an
Order as set forth in paragraph (b) of the Settlement Procedures, and take such
other action as is required of BD pursuant to the Settlement Procedures.
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If any Beneficial Owner or Existing Holder selling AMPS in an Auction
fails to deliver such shares, the Broker-Dealer of any Person that was to have
purchased AMPS in such Auction may deliver to such Person a number of whole
shares of AMPS that is less than the number of shares that otherwise was to be
purchased by such Person. In such event, the number of AMPS to be so delivered
shall be determined by such Broker-Dealer. Delivery of such lesser number of
shares shall constitute good delivery. Upon the occurrence of any such failure
to deliver shares, such Broker-Dealer shall deliver to the Auction Agent the
notice required by Section 3.3(d)(ii) hereof. Notwithstanding the foregoing
terms of this Section 3.4(b), any delivery or non-delivery of AMPS which
represents any departure from the results of an Auction, as determined by the
Auction Agent, shall be of no effect unless and until the Auction Agent shall
have been notified of such delivery or non-delivery in accordance with the terms
of Section 3.3(d) hereof. The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 3.4(b).
3.5 SERVICE CHARGE TO BE PAID TO BD.
On the Business Day next succeeding each Auction Date, the Auction Agent
shall pay to BD from moneys received from the Fund an amount equal to: (a) in
the case of any Auction Date immediately preceding a 7-Day Dividend Period (with
respect to Series M7) or a 28-Day Dividend Period (with respect to Series W28),
the product of (i) a fraction the numerator of which is the number of days in
such Dividend Period (calculated by counting the first day of such Dividend
Period but excluding the last day thereof) and the denominator of which is 360,
times (ii) 1/4 of 1%, times (iii) $25,000, times (iv) the sum of (A) the
aggregate number of AMPS placed by BD in the applicable Auction that were (x)
the subject of a Submitted Bid of a Beneficial Owner submitted by BD and
continued to be held as a result of such submission and (y) the subject of a
Submitted Bid of a Potential Beneficial Owner submitted by BD and were purchased
as a result of such submission plus (B) the aggregate number of AMPS subject to
valid Hold Orders (determined in accordance with Paragraph 10 of the Statement)
submitted to the Auction Agent by BD plus (C) the number of AMPS deemed to be
subject to Hold Orders by Beneficial Owners pursuant to Paragraph 10 of the
Statement that were acquired by BD for its own account or were acquired by such
Beneficial Owners through BD; and (b) in the case of any Auction Date
immediately preceding a Special Dividend Period, that amount as mutually agreed
upon by the Fund and BD, based on the selling concession that would be
applicable to an underwriting of fixed or variable rate preferred shares with a
similar final maturity or variable rate dividend period, at the commencement of
such Special Dividend Period.
For purposes of subclause (a)(iv)(C) of the foregoing sentence, if any
Beneficial Owner who acquired AMPS through BD transfers those shares to another
Person other than pursuant to an Auction, then the Broker-Dealer for the shares
so transferred shall continue to be BD, PROVIDED, HOWEVER, that if the transfer
was effected by, or if the transferee is, a Broker-Dealer other than BD, then
such Broker-Dealer shall be the Broker-Dealer for such shares.
IV. MISCELLANEOUS.
4.1 TERMINATION.
Any party may terminate this Agreement at any time upon five days' prior
written notice to the other party; PROVIDED, HOWEVER, that if the Broker-Dealer
is Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated neither Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated nor the Auction Agent may terminate this
Agreement without first obtaining the prior written consent of the Fund to such
termination, which consent shall not be withheld unreasonably. This Agreement
shall automatically terminate upon the redemption of all outstanding AMPS or
upon termination of the Auction Agency Agreement.
4.2 FORCE MAJEURE
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Neither party to this Agreement shall be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions or utilities; computer (hardware or
software) or communications services; accidents; labor disputes; acts of civil
or military authority or governmental actions; it being understood that the
parties shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
4.3 PARTICIPANT IN SECURITIES DEPOSITORY; PAYMENT OF DIVIDENDS IN
SAME-DAY FUNDS.
(a) BD is, and shall remain for the term of this Agreement, a
member of, or a participant in, the Securities Depository (or an affiliate of
such a member or participant).
(b) BD represents that it (or if BD does not act as Agent Member,
one of its affiliates) shall make all dividend payments on the AMPS available in
same-day funds on each Dividend Payment Date to customers that use BD (or its
affiliate) as Agent Member.
4.4 AGENT MEMBER.
At the date hereof, BD is a participant of the Securities Depository.
4.5 COMMUNICATIONS.
Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with the Auctions (other than those expressly required to be in
writing), all notices, requests and other communications to any party hereunder
shall be in writing (including telecopy or similar writing) and shall be given
to such party at its address or telecopier number set forth below:
If to the Auction Agent,
addressed to: The Bank of
New York
Corporate Trust Administration
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Dealing and Trading Group - Auction Desk
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the BD,
addressed to: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn:
Telecopier No.: (212)
Telephone No.: (212)
or such other address or telecopier number as such party hereafter may
specify for such purpose by notice to the other party. Each such notice,
request or communication shall be effective when delivered at the address
specified herein. Communications shall be given on behalf of BD by a
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BD Officer and on behalf of the Auction Agent by an Authorized Officer. BD
may record telephone communications with the Auction Agent.
4.6 ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.
4.7 BENEFITS.
Nothing in this Agreement, express or implied, shall give to any person,
other than the Fund, the Auction Agent and BD and their respective successors
and permitted assigns, any benefit of any legal or equitable right, remedy or
claim under this Agreement.
4.8 AMENDMENT; WAIVER.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by a duly authorized representative
of the party to be charged.
(b) Failure of either party to this Agreement to exercise any
right or remedy hereunder in the event of a breach of this Agreement by
the other party shall not constitute a waiver of any such right or remedy
with respect to any subsequent breach.
4.9 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of BD
and the Auction Agent. This Agreement may not be assigned by either party hereto
absent the prior written consent of the other party.
4.10 SEVERABILITY.
If any clause, provision or section of this Agreement shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or section shall not affect any
remaining clause, provision or section hereof.
4.11 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
4.12 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of
New York applicable to agreements made and to be performed
in said state.
4.13 JURISDICTION.
The parties agree that all actions and proceedings arising out of this
Agreement or any of the transactions contemplated hereby shall be brought in the
County of
New York, and, in connection with any such action or proceeding,
submit to the jurisdiction of, and venue in, such County. Each of the
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parties hereto also irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim arising out of this Agreement or the transactions
contemplated hereby.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
THE BANK OF
NEW YORK, As Auction Agent
By:
------------------------------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
------------------------------------------------
Name:
Title:
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EXHIBIT A
SETTLEMENT PROCEDURES
(a) On each Auction Date, the Auction Agent shall notify by telephone or
through the Auction Agent's Processing System the Broker-Dealers that
participated in the Auction held on such Auction Date and submitted an Order on
behalf of any Beneficial Owner or Potential Beneficial Owner of:
(i) the Applicable Rate fixed for the next succeeding Dividend
Period;
(ii) whether Sufficient Clearing Bids existed for the determination
of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a
Bid or a Sell Order on behalf of a Beneficial Owner, the number of shares,
if any, of AMPS to be sold by such Beneficial Owner;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a
Bid on behalf of a Potential Beneficial Owner, the number of shares, if
any, of AMPS to be purchased by such Potential Beneficial Owner;
(v) if the aggregate number of shares of AMPS to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid or a
Sell Order exceeds the aggregate number of shares of AMPS to be purchased
by all Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid, the name or names of one or more Buyer's Broker-Dealers
(and the name of the Agent Member, if any, of each such Buyer's
Broker-Dealer) acting for one or more purchasers of such excess number of
shares of AMPS and the number of such shares to be purchased from one or
more Beneficial Owners on whose behalf such Broker-Dealer acted by one or
more Potential Beneficial Owners on whose behalf each of such Buyer's
Broker-Dealers acted;
(vi) if the aggregate number of shares of AMPS to be purchased by
all Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid exceeds the aggregate number of shares of AMPS to be sold
by all Beneficial Owners on whose behalf such Broker-Dealer submitted a
Bid or a Sell Order, the name or names of one or more Seller's
Broker-Dealers (and the name of the Agent Member, if any, of each such
Seller's Broker-Dealer) acting for one or more sellers of such excess
number of shares of AMPS and the number of such shares to be sold to one
or more Potential Beneficial Owners on whose behalf such Broker-Dealer
acted by one or more Beneficial Owners on whose behalf each of such
Seller's Broker-Dealers acted; and
(vii) the Auction Date of the next succeeding Auction with respect
to the series of the AMPS.
(b) On each Auction Date, each Broker-Dealer that submitted an Order on
behalf of any Beneficial Owner or Potential Beneficial Owner shall:
(i) in the case of a Broker-Dealer that is a Buyer's
Broker-Dealer, instruct each Potential Beneficial Owner on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole or in part,
to instruct such Potential Beneficial Owner's
A-1
Agent Member to pay to such Broker-Dealer (or its Agent Member) through
the Securities Depository the amount necessary to purchase the number of
shares of AMPS to be purchased pursuant to such Bid against receipt of
such shares and advise such Potential Beneficial Owner of the Applicable
Rate for the next succeeding Dividend Period;
(ii) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Sell Order that was accepted, in whole or in
part, or a Bid that was accepted, in whole or in part, to instruct such
Beneficial Owner's Agent Member to deliver to such Broker-Dealer (or its
Agent Member) through the Securities Depository the number of shares of
AMPS to be sold pursuant to such Order against payment therefor and advise
any such Beneficial Owner that will continue to hold shares of AMPS of the
Applicable Rate for the next succeeding Dividend Period;
(iii) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate for the next
succeeding Dividend Period;
(iv) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted an Order of the Auction Date for the next
succeeding Auction; and
(v) advise each Potential Beneficial Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, of
the Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to (a)
above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf of a
Potential Beneficial Owner or a Beneficial Owner shall, in such manner and at
such time or times as in its sole discretion it may determine, allocate any
funds received by it pursuant to (b)(i) above and any shares of AMPS received by
it pursuant to (b)(ii) above among the Potential Beneficial Owners, if any, on
whose behalf such Broker-Dealer submitted Bids, the Beneficial Owners, if any,
on whose behalf such Broker-Dealer submitted Bids that were accepted or Sell
Orders, and any Broker-Dealer or Broker-Dealers identified to it by the Auction
Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Beneficial Owner and Beneficial Owner shall
instruct its Agent Member as provided in (b)(i) or (ii) above, as the case
may be;
(ii) each Seller's Broker-Dealer which is not an Agent Member of
the Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to the Agent Member of the Beneficial
Owner delivering shares to such Broker-Dealer pursuant to (b)(ii) above
the amount necessary to purchase such shares against receipt of such
shares, and (B) deliver such shares through the Securities Depository to a
Buyer's Broker-Dealer (or its Agent Member) identified to such Seller's
Broker-Dealer pursuant to (a)(v) above against payment therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through
the Securities Depository to a Seller's Broker-Dealer (or its Agent
Member) identified pursuant to (a)(vi) above the amount necessary to
purchase the shares to be purchased pursuant to
A-2
(b)(i) above against receipt of such shares, and (B) deliver such shares
through the Securities Depository to the Agent Member of the purchaser
thereof against payment therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d)(i) above shall
instruct the Securities Depository to execute the transactions described
in (b)(i) or (ii) above, and the Securities Depository shall execute such
transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall instruct
the Securities Depository to execute the transactions described in (d)(ii)
above, and the Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall instruct
the Securities Depository to execute the transactions described in
(d)(iii) above, and the Securities Depository shall execute such
transactions.
(f) If a Beneficial Owner selling shares of AMPS in an Auction fails to
deliver such shares (by authorized book-entry), a Broker-Dealer may deliver to
the Potential Beneficial Owner on behalf of which it submitted a Bid that was
accepted a number of whole shares of AMPS that is less than the number of shares
that otherwise was to be purchased by such Potential Beneficial Owner. In such
event, the number of shares of AMPS to be so delivered shall be determined
solely by such Broker-Dealer. Delivery of such lesser number of shares shall
constitute good delivery. Notwithstanding the foregoing terms of this paragraph
(f), any delivery or non-delivery of shares which shall represent any departure
from the results of an Auction, as determined by the Auction Agent, shall be of
no effect unless and until the Auction Agent shall have been notified of such
delivery or non-delivery in accordance with the provisions of the Auction Agency
Agreement and the
Broker-Dealer Agreements.
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EXHIBIT B
THE BANK OF
NEW YORK
AUCTION BID FORM
SUBMIT TO: ISSUE:
The Bank of New York MBIA Capital/Claymore Managed Duration
Corporate Trust Administration Investment Grade Municipal Fund
000 Xxxxxx Xxxxxx, 0xx Xxxxx Auction Market Preferred Stock, Series
Xxx Xxxx, Xxx Xxxx 00000 M7 and Series W28("AMPS")
Attention: Dealing and Trading Group -
Auction Desk
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder: __________________________
BENEFICIAL OWNER
Shares of Series now held_________________ HOLD_____________
BID at rate of_____________
SELL_____________
POTENTIAL BENEFICIAL OWNER
# of shares of Series___________
BID at rate of___________ Notes:
(1) If submitting more than one Bid for one Bidder, use additional
Auction Bid Forms.
(2) If one or more Bids covering in the aggregate more than the number
of outstanding shares held by any Beneficial Owner are submitted,
such bid shall be considered valid in the order of priority set
forth in the Auction Procedures on the above issue.
(3) A Hold or Sell Order may be placed only by a Beneficial Owner
covering a number of shares not greater than the number of shares
currently held.
(4) Potential Beneficial Owners may make only Bids, each of which must
specify a rate. If more than one Bid is submitted on behalf of any
Potential Beneficial Owner, each Bid submitted shall be a separate
Bid with the rate specified.
(5) Bids may contain no more than three figures to the right of the
decimal point (.001 of 1%). Fractions will not be accepted.
(6) An Order must be submitted in whole shares of AMPS with an aggregate
liquidation preference of $25,000.
B-1
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
__________________________________________
Authorized Signature
----------------------
B-2
EXHIBIT C
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: MBIA CAPITAL/CLAYMORE MANAGED DURATION
INVESTMENT GRADE MUNICIPAL FUND
Auction Market Preferred Stock ("AMPS")
We are (check one):
/ / the Existing Holder named below;
/ / the Broker-Dealer for such Existing Holder; or
/ / the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred _________
Series ___ AMPS to __________________________________.
-------------------------------------
(Name of Existing Holder)
-------------------------------------
(Name of Broker-Dealer)
-------------------------------------
(Name of Agent Member)
By:
---------------------------------------
Name:
Title:
C-1
EXHIBIT D
(Note: To be used only for failures to deliver or to pay for
AMPS sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for _____________________ (the "Purchaser"), which
purchased _______ Series ___ AMPS of MBIA CAPITAL/CLAYMORE MANAGED DURATION
INVESTMENT GRADE MUNICIPAL FUND in the Auction held on ____________________ from
the seller of such shares.
We hereby notify you that (check one):
/ / the Seller failed to deliver such shares to the Purchaser.
/ / the Purchaser failed to make payment to the Seller upon delivery of such
shares.
Name:
--------------------------------
XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED
By:
--------------------------------
Name:
Title:
D-1
