SUBSCRIPTION AGENT AGREEMENT (Company)
This Subscription Agent Agreement (the "Agreement") is made as of
__________________, 1996 between _____________________ (the "Company") and State
Street Bank & Trust Company, as subscription agent (the "Agent"). All terms not
defined herein shall have the meaning given in the prospectus (the "Prospectus")
included in the (Registration Statement on Form N-2 (File No. 811-4800) filed by
the Company with the Securities and Exchange Commission on ____________, 1996,
as amended by any amendment filed with respect thereto (the "Registration
Statement").
WHEREAS, the Company proposes to make subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Company (the "Subscription Certificates") to shareholders of record (the
"Shareholders") of its Common Stock, par value $0.001 per share ("Common
Stock"), as of a record date specified by the Company (the "Record Date"),
pursuant to which each Shareholder will have certain rights (the "Rights") to
subscribe for shares of Common Stock, as described in and upon such terms as are
set forth in the Prospectus, a final copy of which has been or, upon
availability will promptly be, delivered to the Agent; and
WHEREAS, the Company wishes the Agent to perform certain acts on behalf of
the Company, and the Agent is willing to so act, in connection with the
distribution of the Subscription Certificates and the issuance and exercise of
the Rights to subscribe therein set forth, all upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements set forth herein, the parties agree as follows:
1. Appointment. The Company hereby appoints the Agent to act as subscription
agent in connection with the distribution of Subscription Certificates and the
issuance and exercise of the Rights in accordance with the terms set forth in
this Agreement and the Agent hereby accepts such appointment.
2. Form and Execution of Subscription Certificates.
(a) Each Subscription Certificate shall be irrevocable and
non-transferable. The Agent shall, in its capacity as Transfer Agent of the
Company, maintain a register of Subscription Certificates and the holders of
record thereof (each of whom shall be deemed a "Shareholder" hereunder for
purposes of determining the rights of holders of Subscription Certificates).
Each Subscription Certificate shall, subject to the provisions thereof, entitle
the Shareholder in whose name it is recorded to the following:
(1) With respect to Record Date Shareholders only, the right to acquire
during the Subscription Period, as defined in the Prospectus, at the
Subscription Price, as defined in the Prospectus, a number of shares of Common
Stock equal to one share of Common Stock for every one Right (the "Primary
Subscription Right"); and
(2) With respect to Record Date Shareholders only, the right to
subscribe for additional shares of Common Stock, subject to the availability of
such shares and to the allotment of such shares as may be available among Record
Date Shareholders who exercise Over-Subscription Rights on the basis specified
in the Prospectus; provided, however, that such Record Date Shareholder has
exercised all Primary Subscription Rights issued to him or her (the
"Over-Subscription Privilege").
3. Rights and Issuance of Subscription Certificates.
(a) Each Subscription Certificate shall evidence the Rights of the
Shareholder therein named to purchase Common Stock upon the terms and conditions
therein and herein set forth.
(b) Upon the written advice of the Company, signed by any of its duly
authorized officers, as to the Record Date, the Agent shall, from a list of the
Company Shareholders as of the Record Date to be prepared by the Agent in its
capacity as Transfer Agent of the Company, prepare and record Subscription
Certificates in the names of the Shareholders, setting forth the number of
Rights to subscribe for the Company's Common Stock calculated on the basis of
one Right for four shares of Common Stock recorded on the books in the name of
each such Shareholder as of the Record Date. The number of Rights that are
issued to Record Date Shareholders will be rounded down, by the Agent, to the
nearest number of Full Rights as Fractional Rights will not be issued. Each
Subscription Certificate shall be dated as of the Record Date and shall be
executed manually or by facsimile signature of a duly authorized officer of the
Subscription Agent. Upon the written advice, signed as aforesaid, as to the
effective date of the Registration Statement, the Agent shall promptly
countersign and deliver the Subscription Certificates, together with a copy of
the Prospectus, instruction letter and any other document as the Company deems
necessary or appropriate, to all Shareholders with record addresses in the
United States (including its territories and possessions and the District of
Columbia). Delivery shall be by first class mail (without registration or
insurance), except for those Shareholders having a registered address outside
the United States (who will only receive copies of the Prospectus, instruction
letter and other documents as the Company deems necessary or appropriate, if
any), delivery shall be by air mail (without registration or insurance) and by
first class mail (without registration or insurance) to those Shareholders
having APO or FPO addresses. No Subscription Certificate shall be valid for any
purpose unless so executed.
(c) The Agent will mail a copy of the Prospectus, instruction letter, a
special notice and other documents as the Company deems necessary or
appropriate, if any, but not Subscription Certificates to Record Date
Shareholders whose record addresses are outside the United States (including its
territories and possessions and the District of Columbia ) ("Foreign Record Date
Shareholders"). The Rights to which such Subscription Certificates relate will
be held by the Agent for such Foreign Record Date Shareholders' accounts until
instructions are received to exercise, sell or transfer the Rights.
4. Exercise.
(a) Record Date Shareholders may acquire shares of Common Stock on Primary
Subscription and pursuant to the Over-Subscription Privilege by delivery to the
Agent as specified in the Prospectus of (i) the Subscription Certificate with
respect thereto, duly executed by such Shareholder in accordance with and as
provided by the terms and conditions of the Subscription Certificate, together
with (ii) the estimated purchase price of as disclosed in the Prospectus for
each share of Common Stock subscribed for by exercise of such Rights, in U.S.
dollars by money order or check drawn on a bank in the United States, in each
case payable to the order of the Company or the Agent.
(b) Rights may be exercised at any time after the date of issuance of the
Subscription Certificates with respect thereto but no later than 5:00 P.M. New
York time on such date as the Company shall designate to the Agent in writing
(the "Expiration Date"). For the purpose of determining the time of the exercise
of any Rights, delivery of any material to the Agent shall be deemed to occur
when such materials are received at the Shareholder Services Division of the
Agent specified in the Prospectus.
(c) Notwithstanding the provisions of Section 4 (a) and 4 (b) regarding
delivery of an executed Subscription Certificate to the Agent prior to 5:00 P.M.
New York time on the Expiration Date, if prior to such time the Agent receives a
Notice of Guaranteed Delivery by facsimile (telecopy) or otherwise from a bank,
a trust company or a New York Stock Exchange member guaranteeing delivery of (i)
payment of the full Subscription Price for the shares of Common Stock subscribed
for on Primary Subscription and any additional shares of Common Stock subscribed
for pursuant to the Over-Subscription Privilege, and (ii) a properly completed
and executed Subscription Certificate, then such exercise of Primary
Subscription Rights and Over-Subscription Rights shall be regarded as timely,
subject, however, to receipt of the duly executed Subscription Certificate and
full payment for the Common Stock by the Agent within three Business Days (as
defined below) after the Expiration Date (the "Protect Period") and full payment
for their Common Stock within ten Business Days after the Confirmation Date (as
defined in Section 4(d)). For the purposes of the Prospectus and this Agreement,
"Business Day" shall mean any day on which trading is conducted on the New York
Stock Exchange.
(d) The Fund will determine the Subscription Price by taking 95% of the
average of the last reported sale prices of shares of Common Stock on the New
York Stock Exchange on the fourth Business Day following the Expiration Date
(the "Pricing Date") and the three Business Days. Within five Business Days
after five Business Days following the Pricing Date (the "Confirm Date") the
Agent shall send to each exercising shareholder (or, if shares of Common Stock
on the Record Date are held by Cede & Co. or any other depository or nominee, to
Cede & Co. or such other depository or nominee) a confirmation showing the
number of shares of Common Stock acquired pursuant to the Primary Subscription,
and, if applicable, the Over-Subscription Privilege, the per share and total
purchase price for such shares, and any additional amount payable to the Fund by
such shareholder or any excess to be refunded by the Fund to such shareholder,
along with a letter explaining the allocation of shares of Common Stock pursuant
to the Over-Subscription Privilege.
(e) Any additional payment required from a shareholder must be received by
the Agent within ten Business Days after the Confirmation Date and any excess
payment to be refunded by the Fund to a shareholder will be mailed by the Agent
within ten Business Days after the Confirmation Date. If a shareholder does not
make timely payment of any additional amounts due in accordance with Section
4(d), the Agent will consult with the Fund in accordance with Section 5 as to
the appropriate action to be taken. The Agent will not issue or deliver
certificates for shares subscribed for until payment in full therefore has been
received, including collection of checks and payment pursuant to notices of
guaranteed delivery.
5. Validity of Subscriptions. Irregular subscriptions not otherwise covered by
specific instructions herein shall be submitted to an appropriate officer of the
Company and handled in accordance with his or her instructions. Such
instructions will be documented by the Agent indicating the instructing officer
and the date thereof.
6. Over-Subscription. If, after allocation of shares of Common Stock to Record
Date Shareholders, there remain unexercised Rights, then the Agent shall allot
the shares issuable upon exercise of such unexercised Rights (the "Remaining
Shares") to shareholders who have exercised all the Rights initially issued to
them and who wish to acquire more than the number of shares for which the Rights
issued to them are exercisable. Shares subscribed for pursuant to the
Over-Subscription Privilege will be allocated in the amounts of such
over-subscriptions. If the number of shares for which the Over-Subscription
Privilege has been exercised is greater than the Remaining Shares, the Agent
shall allocate the Remaining Shares to Record Date Shareholders exercising
Over-Subscription Privilege based on the number of shares of Common Stock owned
by them on the Record Date. Any remaining shares to be issued shall be allocated
to holders of Rights acquired in the secondary market based on the number of
Rights exercised by such holders of Rights. The percentage of Remaining Shares
each over-subscribing Record Date Shareholder or other Rights holder may acquire
will be rounded up or down to result in delivery of whole shares of Common
Stock. The Agent shall advise the Company immediately upon the completion of the
allocation set forth above as to the total number of shares subscribed and
distributable.
7. Delivery of Certificates. The Agent will deliver (i) certificates
representing those shares of Common Stock purchased pursuant to exercise of
Primary Subscription Rights as soon as practicable after the corresponding
Rights have been validly exercised and full payment for such shares has been
received and cleared and (ii) certificates representing those shares purchased
pursuant to the exercise of the Over-Subscription Privilege as soon as
practicable after the Expiration Date and after all allocations have been
effected.
8. Holding Proceeds of Rights Offering in Escrow.
(a) All proceeds received by the Agent from Shareholders in respect of the
exercise of Rights shall be held by the Agent, on behalf of the Company, in a
segregated, interest-bearing escrow account (the "Escrow Account"). Pending
disbursement in the manner described in Section 4(e) above, funds held in the
Escrow Account shall be invested by the Agent at the direction of the Company.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of Rights (including interest earned thereon) to the Company as
promptly as practicable, but in no event later than ten business days after the
Confirmation Date. Proceeds held in respect of Excess Payments (including
interest earned thereon) shall belong to the Company.
9. Reports.
(a) Daily, during the period commencing on __________, until termination of
the Subscription Period, the Agent will report by telephone or telecopier (by
2:00 p.m., New York time), confirmed by letter, to an Officer of the Company,
data regarding Rights exercised, the total number of shares of Common Stock
subscribed for, and payments received therefor, bringing forward the figures
from the previous day's report in each case so as to show the cumulative totals
and any such other information as may be mutually determined by the Company and
the Agent.
10. Loss or Mutilation. If any Subscription Certificate is lost, stolen,
mutilated or destroyed, the Agent may, on such terms which will indemnify and
protect the Company and the Agent as the Agent may in its discretion impose
(which shall, in the case of a mutilated Subscription Certificate include the
surrender and cancellation thereof), issue a new Subscription Certificate of
like denomination in substitution for the Subscription Certificate so lost,
stolen, mutilated or destroyed.
11. Compensation for Services. The Company agrees to pay to the Agent
compensation for its services as such in accordance with its Fee Schedule to act
as Agent, dated ___________________ and set forth hereto as Exhibit A. The
Company further agrees that it will reimburse the Agent for its reasonable
out-of-pocket expenses incurred in the performance of its duties as such.
12. Instructions and Indemnification. The Agent undertakes
the duties and obligations imposed by this Agreement upon the
following terms and conditions:
(a) The Agent shall be entitled to rely upon any instructions or directions
furnished to it by an appropriate officer of the Company, whether in conformity
with the provisions of this Agreement or constituting a modification hereof or a
supplement hereto. Without limiting the generality of the foregoing or any other
provision of this Agreement, the Agent, in connection with its duties hereunder,
shall not be under any duty or obligation to inquire into the validity or
invalidity or authority or lack thereof of any instruction or direction from an
officer of the Company which conforms to the applicable requirements of this
Agreement and which the Agent reasonably believes to be genuine and shall not be
liable for any delays, errors or loss of data occurring by reason of
circumstances beyond the Agent's control.
(b) The Company will indemnify the Agent and its nominees against, and hold
it harmless from, all liability and expense which may arise out of or in
connection with the services described in this Agreement or the instructions or
directions furnished to the Agent relating to this Agreement by an appropriate
officer of the Company, except for any liability or expense which shall arise
out of the negligence, bad faith or willful misconduct of the Agent or such
nominees.
13. Changes in Subscription Certificate. The Agent may, without the consent or
concurrence of the Shareholders in whose names Subscription Certificates are
registered, by supplemental agreement or otherwise, concur with the Company in
making any changes or corrections in a Subscription Certificate that it shall
have been advised by counsel (who may be counsel for the Company) is appropriate
to cure any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error therein or herein contained, and
which shall not be inconsistent with the provision of the Subscription
Certificate except insofar as any such change may confer additional rights upon
the Shareholders.
14. Assignment, Delegation.
(a) Neither this Agreement nor any rights or obligations hereunder may be
assigned or delegated by either party without the written consent of the other
party.
(b) This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns. Nothing in this
Agreement is intended or shall be construed to confer upon any other person any
right, remedy or claim or to impose upon any other person any duty, liability or
obligation.
15. Governing Law. The validity, interpretation and
performance of this Agreement shall be governed by the law of
the State of Massachusetts.
16. Severability. The parties hereto agree that if any of the provisions
contained in this Agreement shall be determined invalid, unlawful or
unenforceable to any extent, such provisions shall be deemed modified to the
extent necessary to render such provisions enforceable. The parties hereto
further agree that this Agreement shall be deemed severable, and the invalidity,
unlawfulness or unenforceability of any term or provision thereof shall not
affect the validity, legality or enforceability of this Agreement or of any term
or provision hereof.
17. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original
and all of which together shall be considered one and the same
agreement.
18. Captions. The captions and descriptive headings herein
are for the convenience of the parties only. They do not in
any way modify, amplify, alter or give full notice of the
provisions hereof.
19. Facsimile Signatures. Any facsimile signature of any
party hereto shall constitute a legal, valid and binding
execution hereof by such party.
20. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are
necessary to effect the purposes of this Agreement.
21. Additional Provisions. Except as specifically modified
by this Agreement, the Agent's rights and responsibilities set
forth in the Agreement for Stock Transfer Services between the
Company and the Agent are hereby ratified and confirmed and
continue in effect.
STATE STREET BANK & TRUST COMPANY
COMPANY
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Signature
Title