CLAYMORE FUNDS
DEALER SELLING AGREEMENT
Claymore Securities, Inc. ("Claymore") serves as the principal
underwriter for the Claymore group of investment companies (each, a "Fund," and,
collectively, the "Funds"), including open-end investment companies (the
"Open-End Funds") and closed-end investment companies (the "Closed-End Funds")
listed on Schedule A hereto, as amended from time to time in accordance with
Section 6(f) hereunder. Claymore and _________________ ("Dealer") hereby agree
that Dealer will participate in the distribution of shares ("Shares") of the
Funds, subject to the terms of this Dealer Selling Agreement ("Agreement").
SECTION 1. LICENSING
a. Dealer represents and warrants that: (i) it is a broker-dealer
registered with the Securities and Exchange Commission ("SEC"); (ii) it is a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD"); (iii) it is licensed by the appropriate regulatory agency of each
state or other jurisdiction in which Dealer will offer and sell Shares of the
Funds; and (iv) each of its partners, directors, officers, employees, and agents
who will participate or otherwise be involved in the offer or sale of the Shares
or the performance by Dealer of its duties and activities under this Agreement
is either appropriately licensed or exempt from such licensing requirements by
the appropriate regulatory agency of each state or other jurisdiction in which
Dealer will offer and sell Shares of the Funds.
b. Dealer agrees that: (i) termination or suspension of its
registration with the SEC; (ii) termination or suspension of its membership with
the NASD; or (iii) termination or suspension of its license to do business by
any state or other jurisdiction shall immediately cause the termination of this
Agreement. Dealer further agrees to notify Claymore promptly in writing of any
such action or event.
c. Dealer agrees that this Agreement is in all respects subject to the
Conduct Rules of the NASD and such Conduct Rules shall control any provision to
the contrary in this Agreement. Without limiting the generality of the
foregoing, Dealer acknowledges that it is solely responsible for all suitability
determinations with respect to offers and sales of Shares of the Funds to
Dealer's customers and that Claymore has no responsibility for the manner of
Dealer's performance of, or for Dealer's acts or omissions in connection with,
the duties and activities Dealer performs under this Agreement.
d. Dealer agrees to be bound by and to comply with all applicable
federal and state laws and all rules and regulations promulgated thereunder
generally affecting the sale or distribution of mutual fund shares or classes of
such shares.
SECTION 2. TERMS AND CONDITIONS APPLICABLE TO DISTRIBUTION OF OPEN-END FUNDS AND
CONTINUOUSLY OFFERED CLOSED-END FUNDS
The following provisions relate to the offer and sale of Shares of (i)
each Open-End Fund, and (ii) any Closed-End Fund that offers its Shares during
an offering period that
continues indefinitely (a "Continuously Offered Closed-End Fund"). Unless
otherwise noted, references to "Funds" in this Section 2 shall include both
Open-End Funds and Continuously Offered Closed-End Funds.
a. Orders
(i) Dealer agrees to offer and sell Shares of the Funds (including
classes thereof) only at the regular public offering price applicable to such
Shares and in effect at the time of each transaction. The procedures relating to
all orders and the handling of each order (including the manner of computing the
net asset value of Shares and the effective time of orders received from Dealer)
are subject to: (A) the terms of the then-current prospectus and statement of
additional information (including any supplements, stickers or amendments
thereto) relating to each Fund (or, as appropriate, class thereof), as filed
with the SEC (collectively, the "Prospectus"); (B) the new account application
for each Fund (or, as appropriate, class thereof), as supplemented or amended
from time to time; and (C) Claymore's written instructions and multiple class
pricing procedures and guidelines, if any, as provided to Dealer from time to
time. To the extent that the Prospectus contains provisions that are
inconsistent with this Agreement or any other document, the terms of the
Prospectus shall be controlling.
(ii) Claymore reserves the right at any time, and without notice to
Dealer, to suspend the sale of Shares or to withdraw or limit the offering of
Shares.
(iii) In all offers and sales of the Shares to the public, Dealer
is not authorized to act as broker or agent for, or employee of, Claymore, any
Fund or any other dealer, and Dealer shall not represent to any third party that
Dealer has such authority or is acting in such capacity. Rather, Dealer agrees
that it is acting as principal for Dealer's own account or as agent on behalf of
Dealer's customers in all transactions in Shares, except as provided in Section
2.b.(ix) hereof.
(iv) All orders are subject to acceptance by Claymore in its sole
discretion and become effective only upon confirmation by Claymore. Claymore
reserves the unqualified right not to accept any specific order for the purchase
or sale of Shares.
(v) Claymore agrees that it will accept from Dealer orders placed
through a remote terminal or otherwise electronically transmitted via the
National Securities Clearing Corporation ("NSCC") Fund/Serv Networking program,
provided, however, that appropriate documentation thereof and agreements
relating thereto are executed by both parties to this Agreement, including in
particular the standard NSCC Networking Agreement and any other related
agreements between Claymore and Dealer deemed appropriate by Claymore, and that
all accounts opened or maintained pursuant to that program will be governed by
applicable NSCC rules and procedures. Both parties further agree that, if the
NSCC Fund/Serv Networking program is used to place orders, the standard NSCC
Networking Agreement will control insofar as there is any conflict between any
provision of this Dealer Selling Agreement and the standard NSCC Networking
Agreement.
b. Duties of Dealer
(i) Dealer agrees to purchase Shares only from Claymore or from
Dealer's customers.
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(ii) Dealer agrees to enter orders for the purchase of Shares only
from Claymore and only for the purpose of covering purchase orders Dealer has
already received from its customers or for Dealer's own bona fide investment.
(iii) Dealer agrees to date and time stamp all orders for the
purchase or sale of Shares received by Dealer, and to promptly forward such
orders to Claymore in time for processing at the public offering price next
determined after receipt of such orders by Dealer, in each case as described in
the applicable Prospectus. Dealer represents that it has procedures in place
reasonably designed to ensure that orders received by Dealer are handled in a
manner consistent with Rule 22c-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"), and any SEC staff positions or interpretations issued
thereunder.
(iv) Dealer agrees not to withhold placing orders for Shares with
Claymore so as to profit itself as a result of such inaction.
(v) Dealer agrees to maintain records of all purchases and sales of
Shares made through Dealer and to furnish Claymore or regulatory authorities
with copies of such records upon request. In that regard, Dealer agrees that,
unless Dealer holds Shares as nominee for its customers or participates in the
NSCC Fund/Serv Networking program, at certain matrix levels, it will provide
Claymore with all necessary information to comply properly with all applicable
federal, state and local reporting requirements, including, without limitation,
backup and nonresident alien withholding requirements for its customer accounts.
Dealer represents and agrees that all Taxpayer Identification Numbers ("TINs")
provided are certified, and that no account that requires a certified TIN will
be established without such certified TIN. With respect to all other accounts,
including Shares held by Dealer in omnibus accounts and Shares purchased or sold
through the NSCC Fund/Serv Networking program, at certain matrix levels, Dealer
agrees to perform all federal, state and local tax reporting with respect to
such accounts, including, without limitation, redemptions and exchanges.
(vi) Dealer agrees to distribute or cause to be delivered to its
customers Prospectuses, proxy solicitation materials and related information and
proxy cards, semi-annual and annual shareholder reports and any other materials
in compliance with applicable legal requirements. Dealer agrees to notify CSI as
to where prospectuses should be sent for fulfillment by Dealer to its customers.
(vii) Dealer agrees that payment for Shares ordered from Claymore
shall be in Fed Funds, New York clearinghouse or other immediately available
funds and that such funds shall be received by Claymore by the earlier of: (A)
the end of the third (3rd) business day following Dealer's receipt of the
customer's order to purchase such Shares; or (B) the settlement date established
in accordance with Rule 15c6-1 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). If such payment is not received by Claymore by such
date, Dealer shall forfeit its right to any compensation with respect to such
order, and Claymore reserves the right, without notice, to cancel the sale, or,
at its option (in the case of Open-End Funds), to sell the Shares ordered back
to the Fund, in which case Claymore may hold Dealer responsible for any loss,
including loss of profit, suffered by Claymore resulting from Dealer's failure
to make payment. If a purchase is made by check, the purchase will be deemed
made upon conversion of
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the purchase instrument into Fed Funds, New York clearinghouse or other
immediately available funds.
(viii) Dealer agrees that it shall assume responsibility for any
loss to the Fund caused by a correction to any order placed by Dealer that is
made subsequent to the trade date for the order, to the extent such order
correction was not based on any negligence on Claymore's part. Dealer further
agrees that it will immediately pay such loss to the Fund upon notification.
(ix) Dealer agrees that, in connection with orders for the purchase
of Shares on behalf of any IRAs, 401(k) plans or other retirement plan accounts,
by mail, telephone, or wire, Dealer shall act as agent for the custodian or
trustee of such plans (solely with respect to the time of receipt of the
application and payments), and Dealer shall not place such an order with
Claymore until it has received from its customer payment for such purchase and,
if such purchase represents the first contribution to such a retirement plan
account, the completed documents necessary to establish the retirement plan.
(x) Dealer agrees that it will not make any conditional orders for
the purchase or redemption of Shares and acknowledges that Claymore will not
accept conditional orders for Shares.
(xi) Dealer agrees that all out-of-pocket expenses incurred by it
in connection with its activities under this Agreement will be borne by Dealer.
c. Multiple Classes of Shares; Reduced Sales Charges
(i) Claymore may, from time to time, provide Dealer with written
guidelines or standards relating to the sale, distribution or servicing of Funds
offering multiple classes of Shares, including classes offering different sales
charges, Rule 12b-1 Plan or Service Plan (as described below) fees or other
operating expenses.
(ii) In accordance with the terms of each applicable Prospectus,
Dealer acknowledges that a reduced sales charge or no sales charge
(collectively, "discounts") may be available to purchasers of Shares. Dealer
agrees to: (A) obtain all necessary information from its customers to allow
Dealer to provide all available discounts; (B) inform its customers of
applicable discount opportunities and inquire about other qualifying holdings
that might entitle customers to receive discounts; and (C) advise Claymore
contemporaneously with each purchase as to amounts of any and all purchases of
Shares made by Dealer, as agent for its customers, qualifying for discounts.
Dealer further agrees that it has, and will maintain during the term of this
Agreement, adequate written supervisory procedures, controls, and exception
reports to ensure that Dealer's customers receive all available discounts.
(iii) Certain of Dealer's customers may participate in a managed
account program (i.e., wrap program) or other no transaction fee program
sponsored by Dealer (the "Program"), and that Dealer may seek to qualify, on
behalf of such customers, for purchase of Class A Shares at net asset value and
without the imposition of initial sales charge, as described in the relevant
Fund's prospectus. If Dealer qualifies on behalf of such customers for such
purchases, Claymore may sell to Dealer, on behalf of its customers who
participate in the
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Program, Class A Shares at net asset value and without the imposition of an
initial sales charge upon the following terms and conditions:
(a) Dealer represents and warrants that the Program is either
(1) a managed account program that qualifies for the non-exclusive safe
harbor from the definition of "investment company" under Rule 3a-4 of
the 1940 Act, or (2) a managed account program that does not meet the
conditions of Rule 3a-4 but is nonetheless deemed not to be an
investment company under the 1940 Act.
(b) Claymore represents and warrants, based on Dealer's above
representation, that it is authorized to sell to Dealer, on behalf of
Dealer's clients who are participants in the Program, Class A Shares at
net asset value and without the imposition of an initial sales charge.
d. Dealer Compensation
(i) In return for providing the services set forth in this
Agreement, except as otherwise provided herein, Dealer shall be entitled to any
concessions and/or sales charges (collectively, "Concessions") set forth in the
Prospectus of the applicable Fund. In addition, Claymore may pay Dealer a fee
for performing distribution-related services and/or performing shareholder
services with respect to Shares. Dealer acknowledges and agrees that any
compensation to be paid for performing distribution-related services with
respect to Shares shall be paid pursuant to a "Rule 12b-1 Plan" adopted by the
applicable Open-End Fund pursuant to Rule 12b-1 under the 1940 Act, or, in the
case of a Continuously Offered Closed-End Fund, pursuant to such Fund's Service
Plan, and that to the extent Claymore waives any payments payable to Claymore
under such Rule 12b-1 Plan or Service Plan, as the case may be, the amounts
payable to Dealer will be reduced accordingly. In determining the amount payable
to Dealer hereunder, Claymore reserves the right to exclude any sales which it
reasonably determines are not made in accordance with the terms of the
Prospectus and provisions of this Agreement.
(ii) Dealer agrees that each Fund may, without prior notice,
suspend or eliminate the payment of any compensation, including without
limitation Rule 12b-1 Plan payments, Service Plan payments or other dealer
compensation, by amendment, sticker or supplement to the then current Prospectus
for such Fund. Claymore shall have no obligation to pay any compensation to
Dealer for the sale of Shares of a Fund until Claymore receives the related
compensation from the Fund, and Claymore's liability to Dealer for such payments
is limited solely to the related compensation that Claymore receives from such
Fund. Commission checks for less than $10 will not be issued.
e. Redemptions, Repurchases and Exchanges of Open-End Funds
(i) Dealer agrees that it will not make any representations to
shareholders relating to the redemption of their Shares other than the
statements contained in the applicable Prospectus and the underlying
organizational documents of the Open-End Fund to which it refers, and that
Dealer will pay as redemption proceeds to shareholders the net asset value,
minus
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any applicable redemption fee, determined after receipt of the order as
discussed in the Prospectus.
(ii) Dealer agrees not to repurchase any Shares from its customers
at a price below that next quoted by an Open-End Fund for redemption or
repurchase, i.e., at the net asset value of such Shares, less any applicable
redemption fee, in accordance with the Open-End Fund's Prospectus. Dealer shall,
however, be permitted to sell Shares for the account of the customer or record
owner to an Open-End Fund at the repurchase price then currently in effect for
such Shares and may charge the customer or record owner a fair service fee or
commission for handling the transaction, provided Dealer discloses the fee or
commission to the customer or record owner. Nevertheless, Dealer agrees that it
shall not maintain a secondary market in such repurchased Shares.
(iii) Dealer agrees that, with respect to a redemption order it has
made, if instructions in proper form are not received by Claymore within the
time customary or required by law, the redemption may be canceled without any
responsibility or liability on Claymore's part or on the part of any Open-End
Fund, or Claymore, at its option, may buy the shares redeemed on behalf of the
Open-End Fund, in which latter case Claymore may hold Dealer responsible for any
loss, including loss of profit, suffered by Claymore resulting from Claymore's
failure to settle the redemption.
(iv) Dealer agrees that if any Share is repurchased by any Open-End
Fund or is tendered for redemption within seven (7) business days after
confirmation by Claymore of the original purchase order from Dealer, Dealer
shall forfeit its right to any compensation with respect to such Share and shall
forthwith refund to Claymore the full compensation, if any, paid to Dealer on
the original sale. Claymore agrees to notify Dealer of such repurchase or
redemption within a reasonable time after settlement. Termination or
cancellation of this Agreement shall not relieve Dealer from its obligation
under this provision.
(v) Dealer agrees that it will comply with any restrictions and
limitations on exchanges described in each Open-End Fund's Prospectus, including
any restrictions or prohibitions relating to frequent purchases and redemptions
(i.e., market timing).
f. Repurchases and Tender Offers of Continuously Offered Closed-End
Funds
(i) Dealer agrees that Shares of a Continuously Offered Closed-End
Fund will not be repurchased by either the Continuously Offered Closed-End Fund
(other than through tender offers from time to time, if any) or Claymore, and
that no secondary market for the Shares of the Continuously Offered Closed-End
Fund exists currently or is expected to develop. Dealer further agrees that, in
the event any purchase order for shares of a Continuously Offered Closed-End
Fund is canceled after confirmation by Claymore, such Shares may not be
repurchased, remarketed or otherwise disposed of by or through Claymore.
(ii) Dealer agrees that, while a Continuously Offered Closed-End Fund
may consider tendering for all or a portion of its Shares on a periodic basis,
there is no assurance that the Continuously Offered Closed-End Fund will tender
for Shares at any time, or that, following such a tender, Shares tendered will
be repurchased by the Continuously Offered Closed-End
6
Fund. Dealer further agrees that, as set forth in the applicable Continuously
Offered Closed-End Fund's Prospectus, under certain circumstances an early
withdrawal charge payable to Claymore may be imposed on Shares accepted for
tender. Any representation as to a tender offer by a Continuously Offered
Closed-End Fund, other than as set forth in the Continuously Offered Closed-End
Fund's Prospectus, is expressly prohibited.
g. Fund Information
(i) Dealer agrees that neither it nor any of its partners,
directors, officers, employees, and agents is authorized to give any information
or make any representations concerning Shares of any Fund except those contained
in the Fund's Prospectus or in materials provided by Claymore.
(ii) Claymore will supply to Dealer Prospectuses, reasonable
quantities of sales literature, sales bulletins, and additional sales
information as provided by Claymore. Dealer agrees to use only advertising or
sales material relating to the Funds that: (A) is supplied by Claymore, or (B)
conforms to the requirements of all applicable laws or regulations of any
government or authorized agency having jurisdiction over the offering or sale of
Shares of the Funds and is approved in writing by Claymore in advance of its
use. Such approval may be withdrawn by Claymore in whole or in part upon written
notice to Dealer, and Dealer shall, upon receipt of such notice, immediately
discontinue the use of such sales literature, sales bulletins and advertising.
Dealer is not authorized to modify or translate any such materials without
Claymore's prior written consent.
SECTION 3. TERMS AND CONDITIONS APPLICABLE TO DISTRIBUTION OF CLOSED-END FUNDS
The following provisions relate to the initial offer and sale of Shares
of the Closed-End Funds other than Continuously Offered Closed-End Funds.
a. Sales to Dealer During the Initial Offering
(i) Claymore will advise Dealer by telegram, telex, facsimile
transmission or other written form, electronic or otherwise (collectively, the
"Notification"), of (A) the method and terms of the offering; (B) the time of
the release of Shares for sale to the public; (C) the initial offering price,
the selling concession, and the portion of the selling concession allowable (the
"reallowance") to certain dealers (together with Dealer, the "Selected
Dealers"); (D) the time at which the subscription books will be opened; and (E)
the amount, if any, of Shares reserved for purchase by Dealer and the period of
reservation.
(ii) An offering may be made on the basis of reservations or
allotments against subscriptions. Acceptance of any reserved Shares after the
time specified therefor in the Notification and any application for additional
Shares will be subject to rejection in whole or in part. The offering may be
withdrawn by Claymore at any time without notice and Claymore reserves the right
to reject any subscription in whole or in part.
(iii) Any Selected Dealer may buy Shares from or sell Shares to any
other Selected Dealer at the offering price, less all or any part of the selling
concession.
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(iv) Dealer agrees that any Shares purchased by it in an offering
will be sold to the public (A) at the initial public offering price set forth in
the Prospectus relating to the applicable Shares, and (B) subject to any terms
and limitations contained in such Prospectus or in the Notification. Dealer
represents that it is familiar with Rule 15c2-8 under the 1934 Act, relating to
the distribution of preliminary and final prospectuses, and Dealer agrees to
comply therewith.
(v) Subject to the terms hereof, upon receipt of the Notification
from Claymore, Dealer may reoffer the Shares purchased by it in conformity with
the terms of offering set forth in the Prospectus and the Notification. Dealer
shall not, without prior written approval from Claymore, offer or sell such
Shares below the offering price before the termination of the offering, except
that a concession for each Share (as set forth in the Notification) may be
allowed by Dealer to dealers who are members in good standing of the NASD and
who agree in writing to comply with Rule 2740(c) of the NASD Conduct Rules or to
foreign dealers not eligible for such membership who agree in writing (A) to
conform to the NASD Conduct Rules in making sales to purchasers outside of the
United States as though they were members of the NASD, including, without
limitation, the provisions of Rules IM-2110-1, 2730, 2740 and 2750 and Rule 2420
as such rules apply to a non-member broker-dealer in a foreign country, and (B)
not to offer or sell any of the Shares in the United States or to persons they
have reason to believe are citizens or residents of the United States.
(vi) Dealer agrees to advise Claymore, prior to the termination of
the offering, of the amount of Shares purchased by Dealer in such offering
remaining unsold, and to sell to Claymore such amount of any unsold Shares as
Claymore may designate, at the offering price, less an amount determined by
Claymore not in excess of the selling concession.
b. Delivery and Payment
(i) Payment for and delivery of Shares purchased by Dealer
hereunder will be made through the facilities of the Depository Trust Company,
if Dealer is a member, or, if Dealer is not a member, settlement may be made
through a correspondent who is a member pursuant to instructions that Dealer
provides to Claymore.
(ii) Claymore may, at its discretion, require Dealer to pay the
full public offering price for any Shares that it purchases pursuant to this
Agreement.
(iii) Claymore will specify a period during which sales concessions
and other additional compensation, if any, as described in the applicable
Prospectus (collectively, "Compensation") is subject to forfeiture (the
"Forfeiture Period"). The Forfeiture Period will generally begin after the date
that the Shares are initially listed on a national securities exchange, and end
on or before the first dividend payment date with respect to such Shares. In the
event that any Shares purchased through an order received from Dealer are resold
in the open market or otherwise during the Forfeiture Period, Claymore reserves
the right to require Dealer to forfeit any Compensation with respect to such
Shares, and Dealer agrees to repay to Claymore, promptly upon demand, any such
forfeited Compensation previously paid to Dealer.
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SECTION 4. REGISTRATION OF SHARES
a. Claymore acts solely as agent for the Funds and Claymore shall have
no obligation or responsibility with respect to Dealer's right to purchase or
sell Shares in any jurisdiction.
b. Claymore shall periodically furnish Dealer with information
identifying the states or jurisdictions in which it is believed that all
necessary notice, registration or exemptive filings for Shares have been made
under applicable securities laws such that offers and sales of Shares may be
made in such states or jurisdictions. Claymore shall have no obligation to make
such notice, registration or exemptive filings with respect to Shares in any
state or jurisdiction.
c. Dealer agrees not to transact orders for Shares in states or
jurisdictions in which it has been informed that Shares may not be sold or in
which it and its personnel are not authorized to sell Shares.
d. Claymore shall have no responsibility, under the laws regulating the
sale of securities in the United States or any foreign jurisdiction, with
respect to the qualification or status of Dealer or Dealer's personnel selling
Fund Shares. Claymore shall not, in any event, be liable or responsible for the
issue, form, validity, enforceability and value of such Shares or for any matter
in connection therewith.
e. Dealer agrees that it will make no offers or sales of Shares in any
foreign jurisdiction.
SECTION 5. INDEMNIFICATION
a. Dealer agrees to indemnify, defend and hold harmless Claymore and
the Funds and their predecessors, successors, and affiliates, each current or
former director, officer, employee, shareholder or agent and each person who
controls or is controlled by Claymore from any and all losses, claims,
liabilities, costs, and expenses, including attorney fees, that may be assessed
against or suffered or incurred by any of them howsoever they arise, and as they
are incurred, which relate in any way to: (i) any alleged violation of any
statute or regulation (including, without limitation, the securities laws and
regulations of the United States or any state or jurisdiction) or any alleged
tort or breach of contract, related to the offer or sale by Dealer of Shares of
the Funds pursuant to this Agreement (except to the extent that Claymore's
negligence or failure to follow correct instructions received from Dealer is the
cause of such loss, claim, liability, cost or expense); (ii) any redemption or
exchange pursuant to instructions received from Dealer or its directors,
partners, affiliates, officers, employees or agents; (iii) incorrect investment
instructions received by Claymore from Dealer; or (iv) the breach by Dealer of
any of its representations and warranties specified herein or the Dealer's
failure to comply with the terms and conditions of this Agreement, whether or
not such action, failure, error, omission, misconduct or breach is committed by
Dealer or its predecessor, successor, or affiliate, each current or former
partner, officer, director, employee or agent and each person who controls or is
controlled by Dealer.
b. Claymore agrees to indemnify, defend and hold harmless Dealer and
its predecessors, successors and affiliates, each current or former director,
officer, employee,
9
shareholder or agent and each person who controls or is controlled by Dealer
from any and all losses, claims liabilities, costs and expenses, including
attorney fees, that may be assessed against or suffered or incurred by any of
them howsoever they arise, and as they are incurred, which relate in any way to
(i) any untrue statement of a material fact, or any omission to state a material
fact, contained in a Prospectus or in any written sales literature or other
marketing materials provided by Claymore to the Dealer, or (ii) the breach by
Claymore of any of its representations and warranties specified herein or
Claymore's failure to comply with the terms and conditions of this Agreement,
whether or not such action, failure, error, omission, misconduct or breach is
committed by Claymore or its predecessor, successor, or affiliate, each current
or former partner, officer, director, employee or agent and each person who
controls or is controlled by Claymore.
c. Dealer agrees to notify Claymore, within a reasonable time, of any
claim or complaint or any enforcement action or other proceeding with respect to
Shares offered hereunder against Dealer or its partners, affiliates, officers,
directors, employees or agents, or any person who controls Dealer, within the
meaning of Section 15 of the 1933 Act.
SECTION 6. TERMINATION; AMENDMENT
a. In addition to the automatic termination of this Agreement specified
in Section 1.b. of this Agreement, each party to this Agreement may unilaterally
cancel its participation in this Agreement by giving thirty (30) days prior
written notice to the other party. In addition, each party to this Agreement
may, in the event of a material breach of this Agreement by the other party,
terminate this Agreement immediately by giving written notice to the other
party, which notice sets forth in reasonable detail the nature of the breach.
Such notice shall be deemed to have been given and to be effective on the date
on which it was either delivered personally to the other party or any officer or
member thereof, or was mailed postpaid or delivered to a telegraph office for
transmission to the other party's designated person at the addresses shown
herein. b. This Agreement shall terminate immediately upon the appointment of a
Trustee under the Securities Investor Protection Act or any other act of
insolvency by Dealer.
c. The termination of this Agreement by any of the foregoing means
shall have no effect upon transactions entered into prior to the effective date
of termination and shall not relieve Dealer of its obligations, duties and
indemnities specified in this Agreement. A trade placed by Dealer subsequent to
its voluntary termination of this Agreement will not serve to reinstate the
Agreement. Reinstatement, except in the case of a temporary suspension of
Dealer, will only be effective upon written notification by Claymore.
d. This Agreement is not assignable or transferable and will terminate
automatically in the event of its "assignment," as defined in the 1940 Act, and
the rules, regulations and interpretations thereunder. Claymore may, however,
transfer any of its duties under this Agreement to any entity that controls or
is under common control with Claymore.
e. This Agreement may be amended by Claymore at any time by written
notice to Dealer. Dealer's placing of an order or accepting payment of any kind
after the effective date
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and receipt of notice of such amendment shall constitute Dealer's acceptance of
such amendment.
f. Claymore may amend this Agreement unilaterally, at any time and from
time to time, to add additional Fund(s) to Schedule A hereof by delivery to
Dealer of a new or amended Schedule A containing the names of the additional
Fund(s). Each party hereby agrees that any such amendment will not be required
to be signed by you but only by Claymore. However, such amendment shall only
become effective and part of this Agreement and be deemed binding upon the first
sale by Dealer of any shares of such additional Fund.
SECTION 7. REPRESENTATIONS AND WARRANTIES
a. Claymore represents and warrants that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the state of Kansas and is duly registered or exempt
from registration as a broker-dealer in all states and jurisdictions in which it
provides services as a non-exclusive distributor for the Funds.
(ii) It is a member in good standing of the NASD.
(iii) There are no impediments, prior or existing, regulatory,
self-regulatory, administrative, civil or criminal matters affecting Claymore's
ability to perform under this Agreement.
(iv) All requisite corporate actions have been taken to authorize
Claymore to enter into and perform this Agreement.
b. In addition to the representations and warranties found elsewhere in
this Agreement, Dealer represents and warrants that:
(i) It is duly organized and existing and in good standing under
the laws of the state, commonwealth or other jurisdiction in which Dealer is
organized and that Dealer will not offer Shares of any Fund for sale in any
state or jurisdiction where such Shares may not be legally sold or where Dealer
is not qualified to act as a broker-dealer.
(ii) There are no impediments, prior or existing, regulatory,
self-regulatory, administrative, civil or criminal matters affecting Dealer's
ability to perform under this Agreement.
(iii) All requisite corporate actions have been taken to authorize
Dealer to enter into and perform this Agreement.
(iv) It is not, at the time of the execution of this Agreement,
subject to any enforcement or other proceeding with respect to its activities
under state or federal securities laws, rules or regulations.
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(v) It has, and will maintain during the term of this Agreement,
appropriate broker's blanket bond insurance policies covering any and all acts
of Dealer's partners, directors, officers, employees, and agents adequate to
reasonably protect and indemnify Claymore and the Funds against any loss which
any party may suffer or incur, directly or indirectly, as a result of any action
or omission by Dealer or Dealer's partners, directors, officers, employees, and
agents.
SECTION 8. ANTI-MONEY LAUNDERING RESPONSIBILITY
a. Dealer represents and warrants that it is in compliance and will
continue to be in compliance with all applicable anti-money laundering laws and
regulations, including the Bank Secrecy Act ("BSA"), and applicable guidance
issued by the SEC and the guidance and rules of the applicable Exchange and the
NASD (collectively, "Guidance").
b. Dealer represents and warrants that it maintains an anti-money
laundering program ("AML Program") that complies with Section 352 of the USA
PATRIOT Act and applicable BSA Regulations and Guidance and that includes a
customer identification program ("CIP") that complies with Section 326. Dealer
represents and warrants that its CIP includes reasonable procedures (a) to
obtain information for and to verify the identity of customers to enable the
Dealer to form a reasonable belief that it knows the true identity of its
customers; (b) to determine whether the person appears on any lists of known or
suspected terrorists or terrorist organization issued by any federal government
agency and designated as such by the Department of the Treasury; and (c) to
maintain required records for at least five year years following a client's
final redemption from a Fund distributed by Dealer.
c. One year after the date of this Agreement and annually thereafter,
Dealer agrees to certify to Claymore and the Claymore Funds that it is
maintaining an AML Program which includes a CIP and which complies with the BSA
and applicable Guidance.
d. Dealer agrees that if the Claymore Funds or Claymore is required to
supply guidance to a securities regulatory organization ("SRO") or government
department or agency about the CIP of the Claymore Funds or Claymore or the
measures taken to obtain information and to verify the identity of specific
clients of the Claymore Funds, Dealer shall allow such SRO or government
department or agency to examine its files.
SECTION 9. PRIVACY
Dealer represents that it has adopted and implemented procedures to
safeguard customer information and records that are reasonably designed to: (a)
ensure the security and confidentiality of customer records and information; (b)
protect against any anticipated threats or hazards to the security or integrity
of customer records and information; (c) protect against unauthorized access to
or use of customer records or information that could result in substantial harm
or inconvenience to any customer; (d) protect against unauthorized disclosure of
non-public personal information to unaffiliated third parties; and (e) otherwise
ensure Dealer's compliance with SEC Regulation S-P.
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SECTION 10. SETOFF; GOVERNING LAW
a. Should any of Dealer's compensation accounts with Claymore have a
debit balance, or should Dealer otherwise owe any amounts to Claymore, Claymore
shall be permitted to offset and recover the amount owed from any account Dealer
has with Claymore, without notice or demand to Dealer.
b. This Agreement shall be governed and construed in accordance with
the laws of the state of Delaware, without reference to the choice-of-law
principles thereof.
SECTION 11. INVESTIGATIONS AND PROCEEDINGS
The parties to this Agreement agree to cooperate fully in any
securities regulatory investigation or proceeding or judicial proceeding with
respect to each party's activities under this Agreement and promptly to notify
the other party of any such investigation or proceeding.
SECTION 12. CAPTIONS
All captions used in this Agreement are for convenience only, are not a
party hereof, and are not to be used in construing or interpreting any aspect
hereof.
SECTION 13. ENTIRE UNDERSTANDING
This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein and supersedes all previous
agreements. This Agreement shall be binding upon the parties hereto when signed
by Dealer and accepted by Claymore.
SECTION 14. SEVERABILITY
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
If, however, any provision of this Agreement is held under applicable law to be
invalid, illegal, or unenforceable in any respect, such provision shall be
ineffective only to the extent of such invalidity, and the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected or impaired in any way.
SECTION 15. SURVIVAL
The representations, warranties, covenants and agreements of the
undersigned contained in this Agreement, including, without limitation, the
indemnity agreement contained in Section 5 hereof, shall survive any termination
of this Agreement.
SECTION 16. NOTICES
All notices under this Agreement will be given in writing and delivered
by personal delivery or by postage prepaid, registered or certified United
States first class mail, return receipt requested, or by facsimile, telecopier,
telex or similar means of same day delivery (with a
13
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to Claymore shall be given or sent to Claymore at its
offices, located at:
Claymore
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attn: Managing Director, Mutual Funds
and all notices to Dealer shall be given or sent to Dealer at the Dealer's
address shown below.
SECTION 17. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein and supersedes all previous
agreements and/or understandings of the parties. This Agreement shall be binding
upon the parties hereto when signed by Dealer and accepted by Claymore.
SECTION 18. MARKET TIMING
Dealer represents that it has and will maintain policies and procedures
to detect and prevent any market timing transaction that contravenes the
restrictions or prohibitions on market timing, if any, as found in the then
current Funds' prospectus and/or statement of additional information. Dealer
acknowledges that it is responsible for the sales activities of its licensed
representatives including, among other things, improper trading activity in
violation of the terms and conditions of the Funds' then current prospectus.
SECTION 19. ERISA
Dealer represents and warrants that (a) if Dealer is a fiduciary within
the meaning of ERISA, Dealer will comply with those ERISA provisions and the
Department of Labor's views, exemptive orders and advisory opinions relating to
fiduciaries of ERISA assets and their receipt of fees or other compensation from
funds in which the fiduciary's assets are invested, (b) by entering into this
Agreement, Claymore will not be deemed a fiduciary of any ERISA plans and (c) by
entering into this Agreement, Claymore will not be deemed to be entering into
any "prohibited transactions," as defined under ERISA. By signing this
agreement, Dealer understands that Claymore intends to rely on this
representation and warranty.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year set forth below.
CLAYMORE SECURITIES, INC.
By: ____________________________________
(Signature)
Name: __________________________________
Title: _________________________________
Date: __________________________________
DEALER:
By: ____________________________________
(Signature)
Name: __________________________________
Title: _________________________________
Address: _______________________________
Telephone:
NASD CRD #
Date: __________________________________
15
SCHEDULE A
Fund Name Share Classes Cusip Ticker
--------- ------------- ----- ------
Claymore/Fiduciary Strategic Equity Fund A, C XXX XXX
Claymore Peroni Equity Opportunities Fund A, C XXX XXX
A-1
