INVESTMENT SUB-ADVISORY AGREEMENT
CLAYMORE/ZACKS MULTI-CAP OPPORTUNITIES FUND
THIS INVESTMENT SUB-ADVISORY AGREEMENT (the "Agreement") dated as of
September 29, 2005, among Claymore/Zacks Multi-Cap Opportunities Fund, (the
"Fund") a series of Claymore Trust, a Delaware statutory trust (the "Trust"),
Claymore Advisors, LLC, a Delaware limited liability company (the "Investment
Adviser"), and Zacks Investment Management, Inc., an Illinois corporation (the
"Investment Sub-Adviser").
WHEREAS, the Investment Adviser has agreed to furnish investment
management and advisory services to the Fund, a series of an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the investment advisory agreement between the Investment
Adviser and the Trust dated as of September 29, 2005 (such agreement or the most
recent successor agreement between such parties relating to advisory services to
the Trust is referred to herein as the "Investment Advisory Agreement")
contemplates that the Investment Adviser may sub-contract investment advisory
services with respect to the Trust to a sub-adviser(s) pursuant to a
sub-advisory agreement(s) agreeable to the Trust and approved in accordance with
the provisions of the 1940 Act;
WHEREAS, the Investment Adviser wishes to retain the Investment
Sub-Adviser to provide certain sub-advisory services;
WHEREAS, the Investment Sub-Adviser is a registered investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Investment Sub-Adviser is willing to furnish
such services upon the terms and conditions herein set forth;
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. Appointment. The Investment Adviser hereby appoints the Investment
Sub-Adviser to act as a sub-adviser with respect to the Fund as set forth in
this Agreement and the Investment Sub-Adviser accepts such appointment and
agrees to render the services herein set forth for the compensation herein
provided.
2. Services of the Investment Sub-Adviser. Subject to the succeeding
provisions of this section, the oversight and supervision of the Investment
Adviser and the direction and control of the Trust's Board of Trustees, the
Investment Sub-Adviser will perform certain of the day-to-day operations of the
Fund which may include one or more of the following services at the request of
the Investment Adviser: (i) managing the investment and reinvestment of the
assets of the Fund in accordance with the investment policies of the Fund; (ii)
arranging, subject to the provisions of paragraph 3 hereof, for the purchase and
sale of securities and other assets for the Fund; (iii) providing investment
research and credit analysis concerning the Fund's
assets; (v) placing orders for purchases and sales of Fund assets, (vi)
maintaining the books and records as are required to support Fund investment
operations, (vii) monitoring on a daily basis the investment activities and
portfolio holdings relating to the Fund and (viii) voting proxies relating to
the Fund's portfolio securities in accordance with the proxy voting policies and
procedures of the Investment Sub-Adviser. At the request of the Investment
Adviser, the Investment Sub-Adviser will also, subject to the oversight and
supervision of the Investment Adviser and the direction and control of the
Trust's Board of Trustees, consult with the Investment Adviser as to the overall
management of the Fund and the investment policies and practices of the Fund,
including (but not limited to) the utilization by the Fund of any interest rate
or other hedging or risk management transactions in connection therewith, and
will perform any of the services described in the Investment Advisory Agreement.
In addition, the Investment Sub-Adviser will keep the Fund and the Investment
Adviser informed of developments materially affecting the Fund and shall, on its
own initiative, furnish to the Fund all information relevant to such
developments. The Investment Sub-Adviser will periodically communicate to the
Investment Adviser, at such times as the Investment Adviser may direct,
information concerning the purchase and sale of securities for the Fund,
including: (i) the name of the issuer, (ii) the amount of the purchase or sale,
(iii) the name of the broker or dealer, if any, through which the purchase or
sale is effected, (iv) the CUSIP number of the instrument, if any, and (v) such
other information as the Investment Adviser may reasonably require for purposes
of fulfilling its obligations to the Fund under the Investment Advisory
Agreement. The Investment Sub-Adviser will provide the services rendered by it
under this Agreement in accordance with the Fund's investment objective,
policies and restrictions (as currently in effect and as they may be amended or
supplemented from time to time) as stated in the Fund's prospectus filed with
the SEC as part of the Fund's registration statement on Form N-1A (the
"Registration Statement") and the resolutions of the Trust's Board of Trustees.
3. Covenants. In the performance of its duties under this Agreement,
the Investment Sub-Adviser:
(a) shall at all times comply and act in accordance with: (i) the
provisions of the 1940 Act and the Advisers Act and all applicable Rules and
Regulations of the Securities and Exchange Commission (the "SEC"); (ii) any
other applicable provision of law; (iii) the provisions of the Agreement and
Declaration of Trust and By-Laws of the Trust, as such documents are amended
from time to time; (iv) the investment objectives, policies and restrictions of
the Fund as set forth in the Fund's prospectus filed with the SEC as part of the
Registration Statement; and (v) any policies, determinations and/or resolutions
of the Board of Trustees of the Trust or the Investment Adviser;
(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 Investment Sub-Adviser will obtain the best
price and the most favorable execution of its orders. In placing orders, the
Investment Sub-Adviser 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 Investment
Sub-Adviser may select brokers on the basis of the research, statistical and
pricing services they provide to the Fund and other clients of the Investment
Adviser or the Investment Sub-Adviser, as the case may be. Information and
research received from such brokers will be in addition to, and not in lieu
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of, the services required to be performed by the Investment Sub-Adviser
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 Investment Sub-Adviser determines in good faith that such
commission is reasonable in terms either of the transaction or the overall
responsibility of the Investment Adviser and the Investment Sub-Adviser to the
Fund and their other clients and that the total commissions paid by the Fund
will be reasonable in relation to the benefits to the Fund over the long term.
In no instance, however, will the Fund's securities be purchased from or sold to
the Investment Adviser, the Investment Sub-Adviser or any affiliated person
thereof, except to the extent permitted by the SEC or by applicable law;
(c) maintain books and records with respect to the Fund's securities
transactions and render to the Investment Adviser and the Trust's Board of
Trustees such periodic and special reports as they may request; and
(d) treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund and the Fund'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.
4. Services Not Exclusive. Nothing in this Agreement shall prevent the
Investment Sub-Adviser 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 Investment Sub-Adviser or any of its officers, employees or agents
from buying, selling or trading any securities for their own accounts or for the
accounts of others for whom it or they may be acting; provided, however, that
the Investment Sub-Adviser will not undertake any activities which will
adversely affect the performance of its obligations under this Agreement.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Sub-Adviser hereby agrees that all records
which it maintains for the Fund are the property of the Trust and further agrees
to surrender promptly to the Fund any such records upon the Trust's request. The
Investment Sub-Adviser 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.
6. Agency Cross Transactions. From time to time, the Investment
Sub-Adviser or brokers or dealers affiliated with the Investment Sub-Adviser may
find themselves in a position to buy for certain of their brokerage clients
(each an "Account") securities which the Investment Sub-Adviser'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 Investment Sub-Adviser 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 both
parties to the transaction without the advisory client's consent. This is
because in a situation where an Investment Sub-Adviser is making the investment
decision (as opposed to a brokerage client who makes his own investment
decisions), and the Investment Sub-Adviser or an affiliate is receiving
commissions from one or both sides of the transaction, there is a potential
conflicting division of loyalties and responsibilities on the Investment
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Sub-Adviser's part regarding the advisory client. The SEC has adopted a rule
under the Advisers Act which permits an Investment Sub-Adviser 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 Investment Sub-Adviser 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 Investment Sub-Adviser.
7. Expenses. During the term of this Agreement, the Investment
Sub-Adviser will bear all costs and expenses of its employees and any overhead
incurred by the Investment Sub-Adviser in connection with their 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 Investment Sub-Adviser.
8. Compensation.
The Investment Adviser agrees to pay to the Investment Sub-Adviser and
the Investment Sub-Adviser agrees to accept as full compensation for all
services rendered by the Investment Sub-Adviser as such, a fee accrued daily and
paid monthly in arrears at an annual rate equal to 0.45% of the Fund's average
daily net assets. 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.
9. Certain Information. The Investment Sub-Adviser shall promptly
notify the Investment Adviser in writing of the occurrence of any of the
following events: (a) the Investment Sub-Adviser shall fail to be registered as
an investment adviser under the Advisers Act, (b) the Investment Sub-Adviser
shall have been served or otherwise have notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, public
board or body, involving the affairs of the Fund, (c) there is a change in
control of the Investment Sub-Adviser or any parent of the Investment
Sub-Adviser within the meaning of the 1940 Act, or (d) there is an adverse
change in the business or financial position of the Investment Sub-Adviser.
10. Limitation on Liability.
(a) The Investment Sub-Adviser will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Investment
Sub-Adviser, the Investment Adviser or by the Fund 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) The Fund may, but shall not be required to, make advance payments
to the Investment Sub-Adviser in connection with the expenses of the Investment
Sub-Adviser in defending any action with respect to which damages or equitable
relief might be sought against the Investment Sub-Adviser under this Section
(which payments shall be reimbursed to the Trust by the Investment Sub-Adviser
as provided below) if the Fund receives (i) a written affirmation of the
Investment Sub-Adviser's good faith belief that the standard of conduct
necessary for the
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limitation of liability in this Section has been met and (ii) a written
undertaking to reimburse the Fund whether or not the Investment Sub-Adviser
shall be deemed to have liability under this Section, such reimbursement to be
due upon (1) a final decision on the merits by a court or other body before whom
the proceeding was brought as to whether or not the Investment Sub-Adviser is
liable under this Section or (2) in the absence of such a decision, upon the
request of the Investment Sub-Adviser for reimbursement by a majority vote 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"). In addition, at least one of
the following conditions must be met: (A) the Investment Sub-Adviser shall
provide a security for such Investment Sub-Adviser undertaking, (B) the Fund
shall be insured against losses arising by reason of any lawful advance, or (C)
a majority of a quorum of the Disinterested Non-Party Trustees of the Trust 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 Investment Sub-Adviser ultimately will
be found not to be liable under this Section.
11. Duration and Termination. This Agreement shall become effective as
of the date hereof and shall continue (unless terminated automatically as set
forth below) 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 Trust's Board of
Trustees or a vote of a majority of the outstanding voting securities of the
Trust at the time outstanding and entitled to vote and (b) the vote of a
majority of the Trustees, who are not parties to this Agreement or interested
persons (as such term is defined in the 0000 Xxx) of any such party, 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,
without the payment of any penalty, upon giving the Investment Sub-Adviser 60
days' notice (which notice may be waived by the Investment Sub-Adviser),
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 Fund at the
time outstanding and entitled to vote, or by the Investment Sub-Adviser on 60
days' written notice (which notice may be waived by the Trust), and will
terminate automatically upon any termination of the Investment Advisory
Agreement between the Fund and the Investment Adviser. 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.)
12. 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.
13. Amendment of this Agreement. This Agreement may only be amended by
an instrument in writing signed by the parties hereto. Any amendment of this
Agreement shall be subject to the 1940 Act.
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14. 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.
15. Use of the Name Zacks. The Investment Sub-Adviser has consented to
the use by the Fund of the name or identifying word "Zacks" in the name of the
Fund. Such consent is conditioned upon the employment of the Investment
Sub-Adviser as the investment sub-adviser to the Fund. The names or identifying
words "Zacks" may be used from time to time in other connections and for other
purposes by the Investment Sub-Adviser and any of its affiliates. The Investment
Sub-Adviser may require the Fund to cease using "Zacks" in the name of the Fund
if the Fund or the Investment Adviser ceases to employ, for any reason, the
Investment Sub-Adviser, any successor thereto or any affiliate thereof as
investment sub-adviser of the Fund.
16. 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.
17. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers designated below as of the day and
year first above written.
CLAYMORE ADVISORS, LLC
By: /s/ Xxxxxxxx Xxxxxxx
_____________________________________
Xxxxxxxx Xxxxxxx
Senior Managing Director and
General Counsel
ZACKS INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxxx
_____________________________________
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
CLAYMORE TRUST ON BEHALF OF
CLAYMORE/ZACKS MULTI-CAP
OPPORTUNITIES FUND
By: /s/ Xxxxxxxx Xxxxxxx
_____________________________________
Name: Xxxxxxxx Xxxxxxx
Title: Chief Legal and
Executive Officer
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