Exhibit 99(k)(3)
SERVICING AGREEMENT
Agreement made as of August 26, 2003, between MBIA Capital/Claymore
Managed Duration Investment Grade Municipal Fund, a Delaware statutory trust
(the "Fund") and Claymore Securities, Inc., a Kansas corporation ("Claymore").
WHEREAS, the Fund intends to operate as a closed-end management
investment company, and is so registered under the Investment Company act of
1940, as amended (the "1940 Act");
WHEREAS, the Fund has authorized the issuance of its common shares of
beneficial interest, par value $.001 per share (the "Common Shares") and a class
of preferred shares with preference rights, the relative rights, terms and
preferences of which are to be determined in the future by the Board of Trustees
of the Fund (the "Preferred Shares") (holders of the Common Shares and Preferred
Shares are referred to collectively herein as the "Shareholders");
WHEREAS, the Fund wishes to retain Claymore to provide certain
services to the Fund, under the terms and conditions stated below, and Claymore
is willing to provide such services for the compensation set forth below:
NOW, THEREFORE, In consideration of the premises and mutual covenants
contained herein, the parties agree as follows:
1. APPOINTMENT. The Fund hereby appoints Claymore as Servicing Agent
of the Fund, and Claymore accepts such appointment and agrees
that it will furnish the services set forth in paragraph 2 below.
2. SERVICES AND DUTIES OF CLAYMORE. Subject to the supervision of
the Fund's Board of Trustees (the "Board"), Claymore will:
(a) Reply to requests for information concerning the Fund from
Shareholders or prospective shareholders, brokers or the
public;
(b) Aid in the secondary market support of the Fund through
regular written and oral communications with the Fund's New
York Stock Exchange specialist, the closed-end fund analyst
community and various information providers specializing in
the dissemination of closed-end fund information;
(c) Assist in the preparation of reports to be sent to the Fund
Shareholders, and assist in the printing and dissemination
of such reports to Shareholders;
(d) Assist in the preparation of all reports required to be
filed with the Securities and Exchange Commission (the
"SEC") on Form N-SAR, or such other form as the SEC may
substitute for Form N-SAR;
(e) Assist in the dissemination to Shareholders of the Fund's
proxy materials and assist in the filing of such materials
with the Fund's regulators, and oversee the tabulation of
proxies by the Fund's transfer agent;
(f) Assist in analyzing the amounts available for distribution
as dividends and distributions to be paid by the Fund to its
Shareholders and in the preparation of materials relevant to
the Fund's Automatic Dividend Reinvestment Plan;
(g) Establish and maintain a toll-free number for sales support
and marketing requests on an ongoing basis;
(h) Assist in the production of marketing and road-show
materials for the offerings of the Fund's Common Shares and
Preferred Shares;
(i) Develop and maintain a website for the Fund which will
provide quarterly updates and monthly distribution
notifications, as well as hyperlinks to the websites of
Claymore and MBIA Capital Management Corp. (the "Adviser")
for added information;
(j) Make the Adviser aware of trading strategies that might be
used for the Fund and communicate to the investment
community any changes made to the Fund's trading strategies;
(k) Assist in the provision of materials regarding the Fund to
the investment community and current and prospective
investors;
(l) Assist in the review of materials made available to
shareholders and prospective investors to assure compliance
with applicable laws, rules and regulations;
(m) Assist in the filing of advertisements and sales materials,
including information on the Fund's website, as necessary,
with the Securities and Exchange Commission ("SEC"), the New
York Stock Exchange, the National Association of Securities
Dealers, Inc. and any regulatory bodies having jurisdiction
over the Fund and its operations;
(n) Assist in the dissemination of the Fund's net asset value,
market price and discount;
(o) Host analyst meetings as appropriate;
(p) Provide persons to serve as officers and trustees of the
Fund, as the Fund may request;
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(q) Maintain ongoing contact with brokers in branch offices
whose clients hold Fund shares or whose clients may have an
interest in acquiring Fund shares, including providing,
among other things, progress reports on the Fund, dividend
announcements and performance updates;
(r) Assist in the drafting of press releases to the public;
(s) Make such reports and recommendations to the Board as the
Board reasonably requests or deems appropriate; and
(t) Provide such other services as the parties may mutually
agree from time to time.
3. COMPLIANCE WITH THE FUND'S GOVERNING DOCUMENTS AND APPLICABLE
LAW. In all matters pertaining to the performance of this
Agreement, the Servicing Agent will act in conformity with the
Fund's Amended and Restated Agreement and Declaration of Trust
(the "Declaration"), By-Laws and registration statements of the
Fund and with the directions of the Board and Fund executive
officers and will conform to and comply with the requirements of
the 1940 Act and the rules and regulations thereunder and all
other applicable federal or state laws and regulations.
4. SERVICE NOT EXCLUSIVE. The Servicing Agent's services hereunder
are not deemed to be exclusive, and the Servicing Agent is free
to render such services to other funds or clients as long as the
Servicing Agent's services under this Agreement are not impaired
thereby.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CLAYMORE
(a) Claymore represents and warrants that it has obtained all
necessary registrations, licenses and approvals in order to
perform the services provided in this Agreement. Claymore
covenants to maintain all necessary registrations, licenses
and approvals in effect during the term of this Agreement.
(b) Claymore represents that it has adopted a written Code of
Ethics in compliance with Rule 17j-1 under the 1940 Act and
will provide the Fund with any amendments to such Code and
any certifications required by Rule 17j-1.
(c) Claymore agrees that it shall promptly notify the Fund (i)
in the event that the SEC or any other regulatory authority
has censured its activities, functions or operations;
suspended or revoked any registration, license or approval;
or has commenced proceedings or an investigation that may
result in any of these actions, and (ii) in the event that
there is a change in Claymore, financial or
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otherwise, that adversely affects its ability to perform
services under this Agreement.
(d) The Fund shall be given access to the records of Claymore at
reasonable times solely for the purpose of monitoring
compliance with the terms of this Agreement. Claymore agrees
to cooperate with the Fund and its representatives in
connection with any such monitoring efforts.
6. COMPENSATION. As compensation for its services, the Fund pays the
Servicing Agent a fee computed and paid monthly at the annual
rate of .26% of the Fund's average daily net assets (including
assets acquired from the sale of any preferred shares), plus the
proceeds of any outstanding borrowings used for financial
leverage.
7. LIMITATION OF LIABILITY OF THE SERVICING AGENT. The Servicing
Agent will not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund or its Shareholders in
connection with the performance of its duties under this
Agreement, except 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 ("disabling conduct").
Claymore agrees to indemnify, defend and hold the Fund, the
Adviser, their several officers, trustees and directors, and any
person who controls the Fund or the Adviser within the meaning of
Section 15 of the Securities Act of 1933 (collectively, "Fund
Indemnified Persons"), free and harmless from and against any and all
claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which Fund
Indemnified Persons may incur, but only to the extent that such
liability or expense incurred by the Fund Indemnified Persons or
resulting from such claims or demands shall arise out of or be based
upon (a) any disabling conduct with respect to the provision of
services under this Agreement, (b) any violation of law relating to
the provision of services under this Agreement or (c) the breach by
Claymore of this Agreement.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE
FUND. Pursuant to the provisions of the Declaration, this
Agreement is entered into by the Board not individually, but as
Trustees and the obligations of the Fund hereunder is not binding
upon any such Trustees or Shareholders of the Fund, but binds
only the Fund itself.
9. DURATION AND TERMINATION. This Agreement shall continue for an
initial period of two years and thereafter shall continue
automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (a) a
vote of a majority of the Fund's Board and (b) a vote of a
majority of the Fund's Board members who are not
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interested persons (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is
terminable (a) by the Fund, without penalty, on thirty (30) days'
written notice, by a vote of a majority of the Fund's Board, or
(b) on sixty (60) days' written notice by Claymore. This
Agreement shall automatically terminate in the event of its
assignment as the term is defined in the 1940 Act.
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver or discharge or termination is
sought.
11. LICENSE.
Claymore hereby grants to the Fund the nonexclusive right and
license to use the xxxx "Claymore" (the "Licensed Xxxx") in the Fund's
name and in connection with the formation, issuance, marketing, and/or
promotion of, or disclosure related to, the Fund. Claymore agrees that
it shall receive no compensation for any such use by the Fund.
Claymore hereby warrants and represents that it has filed applications
and/or owns rights in the Licensed Xxxx sufficient to grant this
license. No right, title or interest in the Licensed Xxxx, except the
right to use the Licensed Xxxx as provided in this Agreement, is or
will be transferred to the Fund by this Agreement. Should this
Agreement be terminated, the Fund agrees that it will take necessary
steps to change its name to a name not including the word "Claymore."
12. CONFIDENTIALITY.
Claymore agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records
and other information relative to the Fund, the Adviser and all prior,
current or potential shareholders of the Fund and not to use such
records and information for any purpose other than the performance of
its duties hereunder. Claymore also agrees that, without the prior
written consent of the Fund, it will not disclose personal information
of any Shareholders of the Fund ("Personal Shareholder Information"),
including to its affiliates, unless it is required by law to disclose
the information to the recipient of such information. Claymore further
agrees, represents and warrants that (a) only those employees of
Claymore who need to do so in carrying out their job responsibilities
may access Personal Shareholder Information; (b) it maintains
physical, electronic and procedural safeguards that comply with
federal standards to protect confidentiality; and (c) it may use
Personal Shareholder Information only for the purposes set forth in
this Agreement.
13. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Delaware and the 1940 Act, without
giving effect
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to the principles of conflicts of law thereof. To the extent that
the applicable laws of the State of Delaware conflict with the
applicable provisions of the 1940 Act, the latter shall control.
14. Books and Records
(a) In compliance with the requirements of the 1940 Act,
Claymore hereby agrees that all records which it maintains
for the Fund are the property of the Fund and further agrees
to surrender promptly to the Fund any of such records upon
request. Claymore further agrees to preserve for the periods
prescribed under the 1940 Act the records required to be
maintained under the 0000 Xxx.
(b) Claymore hereby agrees to furnish to regulatory authorities
having the requisite authority any information or reports in
connection with services that Claymore renders pursuant to
this Agreement which may be requested in order to ascertain
whether the operations of the Fund are being conducted in a
manner consistent with applicable laws and regulations.
15. MISCELLANEOUS. The captions of 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.
16. NOTICES.
All notices required or permitted to be sent under this Agreement
shall be sent, if to the Fund, to:
MBIA Capital/Claymore Managed Duration
Investment Grade Municipal Fund
c/o MBIA Capital Management Corp.
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, President
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
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Or if to Claymore, to:
Claymore Securities, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx, COO and General Counsel
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have caused the instrument to be
executed by their officers designated below as of the day and year first
above written.
Attest: MBIA Capital/Claymore Managed Duration
Investment Grade Municipal Fund
/s/ Marc X. Xxxxxx
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Attest: Claymore Securities, Inc.
/s/ Xxxxxxxx Xxxxxxx
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