Exhibit 99h(2)
UNDERWRITER PARTICIPATION AGREEMENT
This Agreement, dated as of September [ ], 2003, is entered into among
Western Asset Management Company (the "Investment Adviser"), Western
Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (the "Fund")
and Claymore Securities, Inc. ("Claymore") with respect to certain distribution
assistance to be provided by Claymore to the Fund, limited exclusively to
providing offering and marketing materials and additional information to
registered broker-dealers who are part of the underwriting syndicate publicly
offering common shares of beneficial interest (the "Common Shares") and at a
later date preferred shares of beneficial interest (if any) of the Fund
(collectively, the "Shares"). In consideration of their mutual promises and in
consideration of the Fund and Claymore entering into a certain servicing
agreement, dated as of September __, 2003 (the "Servicing Agreement"), the
parties agree as follows:
1. STATUS OF CLAYMORE
(a) Claymore represents and warrants to the Investment Adviser and the
Fund that:
(i) It is a broker-dealer registered as such with the Securities
and Exchange Commission (the "SEC") and is registered or
qualified in all capacities and jurisdictions required by
reason of any participation in the distribution of Shares by it
while providing the services described above, and each employee
or agent of Claymore who participates in the distribution of
Shares has all necessary licenses and qualifications in all
capacities and jurisdictions required by reason of any
participation in the distribution of Shares pursuant to this
Agreement.
(ii) Claymore is a registered broker-dealer and is a member of the
National Association of Securities Dealers, Inc. (the "NASD").
Claymore agrees to abide by all applicable law, including,
without limitation, all of the rules and regulations of the
NASD (including, without limitation, the NASD Rules of Fair
Practice), in connection with the participation in the
distribution of Shares. Claymore agrees to notify the
Investment Adviser and the Fund in writing immediately in the
event of (A) its expulsion or suspension from the NASD, or (B)
its being found to have violated any applicable federal or
state law, rule or regulation (1) in connection with its
activities as a broker-dealer or in connection with this
Agreement, or (2) which may otherwise affect in any material
way its ability to act in accordance with the terms of this
Agreement. Claymore's expulsion from the NASD will
automatically terminate this Agreement immediately without
notice. Suspension of Claymore from the NASD for violation of
any applicable federal or state law, rule or regulation will
terminate this Agreement effective immediately upon the Fund's
or the Investment Adviser's written notice of termination to
Claymore.
(iii) Claymore is familiar with and understands the requirements of
the Securities Act of 1933, as amended (the "1933 Act"), and
has substantial experience with offers and sales of securities
by issuers involving a public offering under the 1933 Act.
(iv) Claymore is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Kansas, and
has the corporate power and authority to execute this
Agreement.
(v) Each of the execution and delivery by Claymore of this
Agreement and the performance by Claymore of its obligations
hereunder has been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of
any court or other agency of government, the certificate of
incorporation or by-laws of Claymore, or any provision of any
indenture, agreement or other instrument to which Claymore is a
party or by which any of its properties or assets is bound or
affected, or conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument.
(vi) This Agreement has been duly executed and delivered by Claymore
and constitutes the legal, valid and binding obligation of
Claymore, enforceable in accordance with its terms except (A)
as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general
application affecting creditor's rights generally; and (B) as
limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
(vii) Claymore holds all governmental and other licenses, permits,
franchises and other authorizations necessary for the conduct
of its business as proposed to be conducted herein, including
all necessary registrations with respect to broker-dealer
activities.
(b) The Fund assumes no obligation or responsibility as to Claymore's
right to participate in the distribution of the Fund's Shares in any
jurisdiction. If Claymore, while performing the services it provides the Fund
hereunder, becomes subject to the laws of any jurisdiction, Claymore will take,
at its own expense, such action, if any, as may be necessary to comply with the
laws of such jurisdictions.
(c) Claymore agrees that it will maintain the registrations,
qualifications, exemptions, memberships and authorizations referred to in
paragraphs (a) and (b) in good standing and in full force and effect throughout
the term of this Agreement.
2. CLAYMORE'S COVENANTS.
(a) Claymore covenants and agrees that, in connection with providing the
services as described in the first paragraph above ("permitted activities"),
Claymore will engage in the permitted activities solely with registered
broker-dealers, and will not participate in any
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distribution of Shares to any person that is not a registered broker-dealer, and
will not offer Shares, or solicit offers for Shares, of the Fund.
(b) Claymore covenants and agrees that it will not make any
representations or provide any information to any person concerning the Fund
other than those contained in the Fund's registration statement on Form N-2
relating to the Common Shares, as amended from time to time (the "Registration
Statement"), or any marketing materials approved by the Fund and the Investment
Adviser.
(c) Claymore covenants and agrees to use information provided by the Fund
or the Investment Adviser only in the manner intended (e.g., documents marked
"internal use only" will not be disseminated to any person other than a
registered broker-dealer).
3. INDEPENDENT CONTRACTOR.
Neither the Investment Adviser nor the Fund shall be liable for any
acts of Claymore or any employee or agent of Claymore, and nothing contained
herein shall be construed as creating, or be deemed to create, the relationship
of employer and employee between Claymore and the Fund or the Investment
Adviser, nor any agency, joint venture, or partnership among the parties.
Claymore shall at all times be and be deemed to be an independent contractor.
Claymore, its employees and agents shall under no circumstances have any
authority to act for or to bind the Investment Adviser or the Fund in any way or
to sign the name of the Investment Adviser or the Fund or to represent that the
Investment Adviser or the Fund is in any way responsible for the acts or
omissions of Claymore. Claymore shall not be required to devote any minimum
amount of time to performing its obligations under this Agreement.
4. REPRESENTATIONS AND WARRANTIES BY THE FUND. The Fund represents and
warrants to Claymore as of the date hereof as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the Registration
Statement and any registration statement filed pursuant to Rule 462(b) under the
1933 Act ("Rule 462(b) Registration Statement") has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act, or order of suspension or revocation of registration pursuant to
Section 8(e) of the Investment Company Act of 1940, as amended (the "1940 Act"),
and no proceedings for any such purpose have been instituted or are pending or,
to the knowledge of the Fund, are contemplated by the SEC, and any request on
the part of the SEC for additional information has been complied with in all
material respects.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto (except any
post-effective amendments filed with the SEC after the later of (x) one year
from the date of this Agreement or (y) the date on which the distribution of the
Common Shares is completed) became effective, the Registration Statement, the
Rule 462(b) Registration Statement, the notification of Form N-8A and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1940 Act and did not and
will not contain an
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untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
Neither the Prospectus (as defined below) nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued, included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The final prospectus in the form first furnished to the
underwriting syndicate for use in connection with the offering of the Common
Shares, including the statement of additional information incorporated therein
by reference, is herein called the "Prospectus."
Each preliminary prospectus delivered to the underwriting syndicate
for use in connection with the offering of the Common Shares and the prospectus
filed as part of the Registration Statement or as part of any amendment thereto,
or filed pursuant to Rule 497 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act and each preliminary prospectus and the
Prospectus delivered to Claymore for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the SEC
pursuant to XXXXX, except to the extent permitted by Regulation S-T. If a Rule
462(b) Registration Statement is required in connection with the offering and
sale of the Common Shares, the Fund has complied or will comply with the
requirements of Rule 111 under the 1933 Act relating to the payment of filing
fees thereof.
The foregoing representations in this Section 4(a) do not apply to
statements or omissions relating to the members of the underwriting syndicate
made in reliance on and in conformity with information furnished in writing to
the Fund by the members of the underwriting syndicate or their agents expressly
for use in the Registration Statement, the 462(b) Registration Statement, the
Prospectus or preliminary prospectus (or any amendment of supplement to any of
the foregoing).
(b) INDEPENDENT ACCOUNTANTS. To the knowledge of the Fund, based on
representations of PricewaterhouseCoopers LLP, as of the date of the report of
the independent accountants contained in the Registration Statement, the
accountants who certified the statement of assets and liabilities included in
the Registration Statement are independent public accountants as required by the
1933 Act.
(c) FINANCIAL STATEMENTS. The statement of assets and liabilities included
in the Registration Statement and the Prospectus, together with the related
notes, presents fairly the financial position of the Fund in all material
respects at the date indicated; said statement has been prepared in conformity
with U.S. generally accepted accounting principles ("GAAP").
(d) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Fund, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (ii) there have been no transactions
entered into by the Fund, other than those in the ordinary course of business,
which are material with respect to the Fund, and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Fund on any
class of its capital shares.
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(e) GOOD STANDING OF THE FUND. The Fund has been duly organized and is
validly existing as an unincorporated voluntary association in good standing
under the laws of the Commonwealth of Massachusetts and has power and authority
to own and lease its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this Agreement;
and the Fund is duly qualified to transact business and is in good standing in
each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(f) NO SUBSIDIARIES. The Fund has no subsidiaries.
(g) INVESTMENT COMPANY STATUS. The Fund is duly registered with the SEC
under the 1940 Act as a closed-end, diversified management investment company,
and no order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or, to the knowledge of the Fund or the
Investment Adviser, threatened by the SEC.
(h) CAPITALIZATION. The authorized, issued and outstanding shares of
beneficial interest of the Fund are as set forth in the Prospectus. All issued
and outstanding common shares of beneficial interest of the Fund have been duly
authorized and validly issued and are fully paid and (except as described in the
Registration Statement) non-assessable and have been offered and sold by the
Fund in compliance with all applicable laws (including, without limitation,
federal and state securities laws); none of the outstanding common shares of
beneficial interest of the Fund was issued in violation of the preemptive or
other similar rights (if any) of any securityholder of the Fund.
(i) DESCRIPTION OF COMMON SHARES. In all material respects, the Common
Shares conform to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same, to the extent such rights are set forth; no holder of the
Common Shares will be subject to personal liability by reason of being such a
holder (except as described in the Registration Statement) and the issuance of
the Common Shares is not subject to the preemptive or other similar rights (if
any) of any securityholder of the Fund.
(j) ABSENCE OF DEFAULTS AND CONFLICTS. The Fund is not in violation of its
agreement and declaration of trust or by-laws, each as amended from time to
time, or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound, or to which any
of the property or assets of the Fund is subject (collectively, "Agreements and
Instruments") except for such violations or defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and in
the Registration Statement and compliance by the Fund with its obligations
hereunder have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Fund pursuant to the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
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that would not result in a Material Adverse Effect), nor will such action result
in any violation (except for such violations that will not result in a Material
Adverse Effect) of the provisions of the agreement and declaration of trust or
by-laws of the Fund, each as amended from time to time, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Fund or any of its assets, properties or operations, other than state
securities or "blue sky" laws applicable in connection with the distribution of
the Common Shares.
(k) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Fund, threatened,
against or affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties or
assets of the Fund or the consummation of the transactions contemplated in this
Agreement or the performance by the Fund of its obligations hereunder. The
aggregate of all pending legal or governmental proceedings to which the Fund is
a party or of which any of its property or assets is the subject which are not
described in the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(l) ACCURACY OF EXHIBITS. There are no material contracts or documents
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto by the 1933 Act or the 1940 Act
which have not been so described and filed as required.
(m) POSSESSION OF INTELLECTUAL PROPERTY. The Fund owns or possesses, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by the Fund, and the Fund has not received any notice or
is not otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property.
(n) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
consummation of the transactions contemplated by this Agreement, except such as
have been already obtained or as may be required under the 1933 Act, the 1940
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or under
the rules of the New York Stock Exchange (the "NYSE") or NASD or state
securities laws.
(o) POSSESSION OF LICENSES AND PERMITS. The Fund possesses such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to operate its properties and to
conduct the business as contemplated in the Prospectus, except where the absence
of such possession would not result in a Material Adverse Effect; the Fund is in
compliance with the terms and conditions of all such Governmental Licenses,
except where the
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failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and the Fund has not received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(p) SUBCHAPTER M. The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement in such a
manner as to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended ("Subchapter M of the Code" and the "Code,"
respectively), and intends to qualify as a regulated investment company under
Subchapter M of the Code.
(q) ACCOUNTING CONTROLS. The Fund maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization and with the applicable requirements of the 1940 Act and the Code;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets and
to maintain compliance with the books and records requirements under the 1940
Act; (iii) access to assets is permitted only in accordance with the
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(r) ABSENCE OF UNDISCLOSED PAYMENTS. To the Fund's knowledge, neither the
Fund nor any employee or agent of the Fund has made any payment of funds of the
Fund or received or retained any funds, which payment, receipt or retention of
funds is of a character required to be disclosed in the Prospectus.
(s) REGISTRATION RIGHTS. There are no persons with registration rights or
other similar rights to have any securities of the Fund registered pursuant to
the Registration Statement or otherwise registered by the Fund under the 1933
Act.
(t) NYSE LISTING. The Common Shares have been duly authorized for listing,
upon notice of issuance, on the NYSE, and the Fund's registration statement on
Form 8-A under the 1934 Act has become effective.
5. REPRESENTATIONS AND WARRANTIES BY THE INVESTMENT ADVISER. The Investment
Adviser represents and warrants to Claymore as of the date hereof as
follows:
(a) GOOD STANDING OF THE INVESTMENT ADVISER. The Investment Adviser has
been duly organized and is validly existing and in good standing as a
corporation under the laws of the State of California with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, except to the extent that
failure to be so qualified and in
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good standing would not have a material adverse effect on the Investment
Adviser's ability to provide services to the Fund.
(b) INVESTMENT ADVISER STATUS. The Investment Adviser is duly registered
with the SEC as an investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act"), and is not prohibited by the Advisers Act or the 1940 Act,
or the rules and regulations under such acts, from acting as investment manager
under the investment management agreement between it and the Fund (the
"Management Agreement") as contemplated by the Prospectus.
(c) DESCRIPTION OF INVESTMENT ADVISER. The descriptions of the Investment
Adviser in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) complied and comply in all material respects with
the provisions of the 1933 Act, the 1940 Act, the Advisers Act and the rules and
regulations thereunder, are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Investment Adviser has the financial resources
available to it necessary for the performance of its services and obligations as
contemplated in the Prospectus, this Agreement and the Management Agreement.
(e) AUTHORIZATION OF AGREEMENTS, ABSENCE OF DEFAULTS AND CONFLICTS. This
Agreement and the Management Agreement have each been duly authorized, executed
and delivered by the Investment Adviser, and the Management Agreement
constitutes a valid and binding obligation of the Investment Adviser,
enforceable in accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing and except as rights to
indemnity and contribution thereunder may be limited by federal and state law;
and neither the execution and delivery of this Agreement or the Management
Agreement nor the performance by the Investment Adviser of its obligations
hereunder or thereunder will conflict with, or result in a breach of, any of the
terms and provisions of, or constitute, with or without the giving of notice or
lapse of time or both, a default under, any agreement or instrument to which the
Investment Adviser is a party or by which it is bound, the organizational
documents of the Investment Adviser, or, to the Investment Adviser's knowledge,
any law, order, decree, rule or regulation applicable to it of any jurisdiction,
court, federal or state regulatory body, administrative agency or other
governmental body, stock exchange or securities association having jurisdiction
over the Investment Adviser or its properties or operations, except where such
breach would not have a material adverse effect on the Investment Adviser's
ability to perform the services contemplated by such agreement; and no consent,
approval, authorization or order of any court or governmental authority or
agency is required for the consummation by the Investment Adviser of the
transactions contemplated by this Agreement or the Management Agreement, except
as have been obtained or may be required under the 1933 Act, the 1940 Act, the
1934 Act, the rules of the NYSE or NASD, or state securities laws.
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(f) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not occurred any event which should
reasonably be expected to have a material adverse effect on the ability of the
Investment Adviser to perform its obligations under this Agreement and the
Management Agreement.
(g) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Investment
Adviser, threatened against or affecting either the Investment Adviser or any
parent or subsidiary of the Investment Adviser or any partners, directors,
officers or employees of the foregoing, whether or not arising in the ordinary
course of business, which might reasonably be expected to result in any material
adverse change in the condition, financial or otherwise, or earnings, business
affairs or business prospects of the Investment Adviser, materially and
adversely affect the properties or assets of the Investment Adviser or
materially impair or adversely affect the ability of the Investment Adviser to
function as an investment adviser or perform its obligations under the
Management Agreement, or which is required to be disclosed in the Registration
Statement and the Prospectus (and has not been so disclosed).
(h) ABSENCE OF VIOLATION OR DEFAULT. The Investment Adviser is not in
violation of its organizational documents or in default under any material
agreement, indenture or instrument, where such violation or default would
reasonably be expected to have a material adverse effect on the ability of the
Investment Adviser to function as an investment adviser or perform its
obligations under the Management Agreement.
6. COVENANTS OF THE FUND.
(a) The Fund covenants with Claymore as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
For a period of one year from the date hereof, the Fund,
subject to Section 6(a)(ii), will comply with the requirements
of Rule 430A under the 1933 Act or Rule 434 under the 1933 Act,
as applicable, and will notify Claymore immediately, and
confirm the notice in writing, (A) when any post-effective
amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (B) of the receipt of any comments from
the SEC, (C) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or statement of additional information and (D) of
the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Common Shares
for offering or sale in any jurisdiction, or of the initiation
or, to the knowledge of the Fund, threatening of any
proceedings for any of such purposes. The Fund will promptly
effect the filings necessary pursuant to Rule 497 under the
1933 Act and will take such steps as it deems necessary to
ascertain promptly whether the form of
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prospectus transmitted for filing under Rule 497 was received
for filing by the SEC and, in the event that it was not, it
will promptly file such prospectus. The Fund will make every
reasonable effort to prevent the issuance of any stop order, or
order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act and, if any such stop order or
order of suspension or revocation of registration is issued, to
obtain the lifting thereof at the earliest possible moment.
(ii) FILING OF AMENDMENTS. For a period of one year from the date
hereof, the Fund will give Claymore notice of its intention to
file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) under the 1933 Act),
any term sheet or any amendment, supplement or revision to the
prospectus included in the Registration Statement at the time
it became effective, and will furnish Claymore with copies of
any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Fund has furnished or
will deliver to Claymore, without charge, a signed copy of the
Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and a signed copy of all
consents and certificates of experts, and will also deliver to
Claymore, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto
(without exhibits). The copies of the Registration Statement
and each amendment thereto furnished to Claymore will be
identical to the electronically transmitted copies thereof
filed with the SEC pursuant to XXXXX, except to the extent
permitted by Regulation S-T. No copy of a post-effective
amendment shall be required to be delivered after one year from
the date hereof.
(iv) DELIVERY OF PROSPECTUSES. The Fund has delivered to Claymore,
without charge, as many copies of each preliminary prospectus
as Claymore reasonably requested, and the Fund hereby consents
to the use of such copies for purposes permitted by the 1933
Act, subject to Section 2(a) of this Agreement. The Fund will
furnish to Claymore, without charge, during the period when the
Prospectus is required to be delivered by an underwriter or
dealer under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as Claymore may
reasonably request. The Prospectus and any amendments or
supplements thereto furnished to Claymore will be identical to
the electronically transmitted copies thereof filed with the
SEC pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(v) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time it
shall be necessary, in the opinion of the Fund's counsel, to
amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933
Act, the Fund will promptly prepare and file
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with the SEC such amendment or supplement as may be necessary
to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to Claymore such number
of copies of such amendment or supplement as Claymore may
reasonably request; provided that, if the supplement or
amendment is required exclusively as a result of a misstatement
in or omission from the information provided to the Fund in
writing by the underwriting syndicate expressly for use in the
Prospectus, the Fund may deliver such supplement or amendment
to Claymore at a reasonable charge not to exceed the actual
cost thereof to the Fund.
(vi) BLUE SKY QUALIFICATIONS. The Fund will use its best efforts, in
cooperation with Claymore and/or the underwriting syndicate, to
qualify the Common Shares for offering and sale under the
applicable securities laws of such states and other
jurisdictions of the United States as Claymore may designate
(if qualification is required under applicable law) and to
maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Fund shall not be
obligated to file any general consent to service of process or
to qualify as a foreign entity or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Common Shares have been so qualified,
the Fund will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year
from the effective date of the Registration Statement and any
Rule 462(b) Registration Statement.
(vii) RULE 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement,
if applicable, for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(viii) USE OF PROCEEDS. The Fund will use the net proceeds received by
it from the sale of the Common Shares substantially in the
manner specified in the Prospectus under "Use of Proceeds."
(ix) LISTING. The Fund will use its reasonable best efforts to cause
the Common Shares to be duly authorized for listing on the
NYSE, subject to notice of issuance, concurrently with the
effectiveness of the Registration Statement.
(x) REPORTING REQUIREMENTS. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act, will
file all documents required to be filed with the SEC pursuant
to the 1940 Act and the 1934 Act within the time periods
required by the 1940 Act and the 1934 Act and the rules and
regulations of the SEC thereunder, respectively.
11
(xi) RULE 462(b) REGISTRATION STATEMENT. If the Fund elects to rely
upon Rule 462(b) under the 1933 Act, the Fund shall file a Rule
462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement, or as soon thereafter as practicable,
and the Fund shall at the time of filing either pay to the SEC
the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the 1933 Act.
7. STANDARD OF CARE.
Claymore shall perform its duties and obligations hereunder in good
faith and as a reasonable person in like circumstances would perform such duties
and obligations.
8. INDEMNIFICATION.
(a) Claymore shall indemnify and hold harmless the Fund, the Investment
Adviser and their respective affiliates, shareholders, officers, trustees,
directors, agents and employees from and against any losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and expenses) to
which they may become subject insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are
based upon: (i) any breach by Claymore of any provision of this Agreement; (ii)
any willful misfeasance or negligence by Claymore in the performance of its
duties and obligations hereunder; (iii) any violation of any applicable law by
Claymore, its employees, agents or representatives; or (iv) any acts or
omissions of the Investment Adviser or the Fund and their respective affiliates,
partners, shareholders, officers, directors, agents and employees taken or not
taken, as the case may be, in reliance upon any untrue statement or alleged
untrue statement of a material fact contained in the Fund's Registration
Statement or any amendment thereto, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, in each case to the extent such statement or omission
relates to Claymore or the services it provides to the Fund and the Investment
Adviser.
(b) The Fund shall indemnify and hold harmless Claymore and its
affiliates, shareholders, officers, directors, agents and employees from and
against any and all losses, claims, damages, liabilities or expenses (including
reasonable attorneys' fees and expenses) to which they may become subject
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon: (i) any material breach by the
Fund of any provision of this Agreement; (ii) any willful misfeasance or gross
negligence by the Fund in the performance of its duties and obligations
hereunder; or (iii) any violation of any applicable law by the Fund, its
employees, agents or representatives.
(c) The Investment Adviser shall indemnify and hold harmless Claymore and
its affiliates, shareholders, officers, directors, agents and employees from and
against any and all
12
losses, claims, damages, liabilities or expenses (including reasonable
attorneys' fees and expenses) to which they may become subject insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon: (i) any material breach by the Investment
Adviser of any provision of this Agreement; or (ii) any willful misfeasance or
negligence by the Investment Adviser in the performance of its duties and
obligations hereunder; or (iii) any violation of any applicable law in relation
to the Fund by the Investment Adviser, its employees, agents or representatives.
(d) The indemnified party (the "Indemnified Party") shall give notice to
the other party (the "Indemnifying Party") promptly after the summons or other
first legal process is served on the Indemnified Party for any claim, notice of
claim or arbitration demand as to which indemnity may be sought pursuant to
paragraphs (a), (b) and (c) of this Section 8. The Indemnifying Party shall
assume the defense of any such claim or any litigation resulting from it, with
counsel selected by it with the approval of the Indemnified Party, which
approval shall not be unreasonably withheld; provided that the Indemnified Party
may participate in such defense at its own expense. The failure of the
Indemnified Party to give notice as provided in this paragraph (d) shall not
relieve the Indemnifying Party from any liability unless such failure to give
proper notice materially prejudices the Indemnifying Party's ability to defend
the claim. No Indemnifying Party, in the defense of any such claim or
litigation, shall, without the consent of the Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term the giving by the claimant or plaintiff to the Indemnified
Party of a release from all liability in respect of such claim or litigation.
(e) The provisions of this Section 8 shall survive the termination of this
Agreement.
9. FEES.
The parties agree that their respective costs and expenses in
connection with this Agreement shall be addressed as provided in this Section
9. In order for any cost or expense of a party to be properly shared or
reimbursed in accordance with this Section 9, such cost or expense must have
been reasonably incurred, must be eligible for reimbursement by the Fund
under its declaration of trust and bylaws, as amended, the 1940 Act and any
other applicable law or regulation, must be accurately accounted for and must
be subject to review by the reimbursing or paying party. For purposes of this
Agreement, organizational and offering costs and expenses shall include
out-of-pocket expenses of the underwriters (including reasonable fees and
disbursements of counsel to the underwriters) required to be reimbursed in
the event such underwriting agreement is terminated under certain
circumstances specified therein.
If (a) the offering costs (other than the sales load) with respect to
the Fund and (b) the aggregate travel and marketing costs and expenses of the
Adviser and Claymore (the "Covered Expenses") (the aggregate costs and
expenses in (a) and (b) being the "Total Expenses") are equal to or less than
$0.03 per Common Share sold in the offering (including all Common Shares sold
pursuant to the exercise of any over-allotment option granted to the
underwriting syndicate) (the "Reimbursement Cap"), the Fund (and not the
Investment Adviser) will (i) reimburse all such costs and expenses and, (ii)
to the extent permitted by law
13
and to the extent that the Reimbursement Cap has not otherwise been paid
pursuant to clause (i) above, pay to Claymore as payment for distribution
assistance up to 0.10% of the public offering price of Common Shares sold in
the offering (including all Common Shares sold pursuant to the exercise of
any over-allotment option granted to the underwriting syndicate) up to, but
not exceeding, the difference between the Total Expenses and the
Reimbursement Cap. At no time will the Investment Adviser be responsible for
all or any portion of such payment for distribution assistance (even if the
Total Expenses exceed the Reimbursement Cap). The Fund shall bear all Covered
Expenses to the extent such expenses, together with the offering costs of the
Fund (other than the sales load), do not in the aggregate exceed the
Reimbursement Cap. The Adviser and Claymore hereby agree to (i) pay all Total
Expenses that exceed the Reimbursement Cap and (ii) reimburse all
organizational expenses of the fund.
10. NOTICES.
Except as otherwise specifically provided in this Agreement, all
notices required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified first class mail, return receipt requested, nationally
recognized overnight courier service, or by facsimile, electronic mail or
similar means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to the Fund, the
Investment Adviser and Claymore shall be given or sent to the addresses set
forth below.
If to the Fund:
Western Asset/Claymore U.S. Treasury
Inflation Protected Securities Fund
c/o Western Asset Management Company
000 Xxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx
Telephone No.: 000.000.0000
Fax No.: 000.000.0000
If to the Investment Adviser:
Western Asset Management Company
000 Xxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx III
Telephone No.: 000.000.0000
Fax No.: 000.000.0000
If to Claymore:
14
Claymore Securities, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone No.: 000.000.0000
Fax No.: 000.000.0000
e-mail: xxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
11. TERMINATION AND AMENDMENT.
(a) This Agreement shall become effective as of the date set forth above
and may be terminated by the Fund or the Investment Adviser upon 30 days notice
in writing to Claymore; provided, that this Agreement shall be deemed
automatically terminated upon the termination of the Servicing Agreement.
(b) This Agreement may be amended only by a writing signed by the parties
hereto.
12. MISCELLANEOUS.
(a) This Agreement sets forth the entire Agreement between the parties
hereto and replaces and supersedes all other understandings, commitments, and
agreements relating to the subject matter hereof.
(b) This Agreement may be assigned by any party hereto only with the prior
written consent of the other parties hereto.
(c) No waiver of any provision of this Agreement or the performance
thereof shall be effective unless in writing signed by the party making such
waiver or shall be deemed to be a waiver of any other provision or the
performance thereof or of any future performance.
(d) If any provision of this Agreement is determined to be unenforceable,
the remaining provisions shall remain enforceable to the extent permissible.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
(f) This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without reference to the conflict
of laws principles thereof.
15
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
WESTERN ASSET/CLAYMORE U.S. TREASURY
INFLATION PROTECTED SECURITIES FUND
By:
-----------------------------
Name:
Title:
CLAYMORE SECURITIES, INC.
By:
-----------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Senior Managing Director and General Counsel
WESTERN ASSET MANAGEMENT COMPANY
By:
-----------------------------
Name:
Title:
