This SUBSCRIPTION AGENT AGREEMENT (this "Agreement"), dated as of__________
_________ by and between Blue Chip Value Fund, Inc. (the "Company"), and
ChaseMellon Shareholder Services, L.L.C. (the "Subscription Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized and declared
a distribution (the "Rights Offering") of one right (a "Right") for each share
of Common Stock, $ .01 par value, held of record by shareholders of the Company
(the "Shareholders") on ____________________ (the "Record Date");
WHEREAS, the Company has filed a registration statement with the Securities
and Exchange Commission on ___________ on Form N-2, which became effective on __
__________, and has also filed with the Commission a prospectus (the
"Prospectus") dated ________________, each of which relates to the Rights
Offering;
WHEREAS, each Shareholder is entitled to subscribe for and purchase at a
subscription price ("Subscription Price") as described in the Prospectus one
share of Common Stock of the Company (a "Share" and collectively, the "Shares")
for each five (5) Rights held, and under certain circumstances, shares not
acquired by exercise of primary subscription rights, upon the terms and subject
to the conditions hereinafter set forth; and
WHEREAS, the Company desires the Subscription Agent to act on behalf of the
Company, and the Subscription Agent is willing so to act, in connection with the
issuance and exercise of Rights and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Subscription Agent. The Company hereby appoints
---------------------------------
the Subscription Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in the Agreement, and the Subscription Agent
hereby accepts such appointment.
SECTION 2. Duties of Subscription Agent
----------------------------
(a) The Subscription Agent shall, from a list of Shareholders as of
the Record Date to be prepared by the Subscription Agent in its capacity as
transfer agent of the Company prepare and record subscription rights
("Subscription Rights") in the
names of the Shareholders, setting forth the number of Rights to subscribe to
the Shares calculated on the basis of one Right for each Share recorded on the
Company books in the name of each shareholder as of the Record Date.
(b) Each Subscription . Right shall be non-transferable and shall, if
exercised by the holder thereof in the manner set forth in the Prospectus,
become irrevocable upon the expiration of the Rights Offering. The Subscription
Agent shall, in its capacity as transfer agent for the Company, maintain a
register of Subscription Rights 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 Rights). Each Subscription Right shall, subject to
the provisions thereof, entitle the Shareholder in whose name it is recorded to
the following:
(1) The right (the "Basic Subscription Right") to purchase a
number of Shares equal to one Share for every five (5) Subscription Rights;
provided, however, that no Rights Certificates which evidence fractional rights
and no fractional Shares shall be issued; and
(2) The right (the "Oversubscription Right") to purchase from
the Company additional Shares, subject to the availability of such shares and to
allotment of such shares as may be available among Shareholders who exercise
Oversubscription Rights on the basis specified in the Prospectus; provided,
however, that a Shareholder who has not exercised his Basic Subscription Rights
with respect to the full number of shares that such Shareholder is entitled to
purchase by virtue of his Basic Subscription Rights as of the Expiration Date,
if any, shall not be entitled to any Oversubscription Rights.
(c) A Shareholder may exercise his Basic Subscription Rights and
Oversubscription Rights by delivery to the Subscription Agent at its corporate
office specified in the Prospectus of (i) the Subscription Right with respect
thereto, duly executed by such Shareholder in accordance with and as provided by
the terms and conditions of the Subscription Right, together with (ii) the
assumed purchase price for each share of Common Stock subscribed for by exercise
of such Rights, in United States dollars by money order or check drawn on a bank
located in the continental United States and in each case payable to the order
of ChaseMellon Shareholder Services, L.L.C.
(d) Rights may be exercised at any time after the date of issuance of
the Subscription Rights with respect thereto but no later than 5:00 p.m. Eastern
Daylight Time on such date as the Company shall designate to the Subscription
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 Subscription
Agent shall be deemed to occur
when such materials are received at the corporate office of the Subscription
Agent specified in the Prospectus.
(e) Notwithstanding the provisions of Section 2(c) and 2(d) regarding
delivery of an executed Subscription Right to the Agent prior to 5:00 p.m.
Eastern Daylight Time on the Expiration Date, if prior to such time the Agent
receives notice of guaranteed delivery by mail or otherwise from a bank, trust
company or a New York Stock Exchange member guaranteeing delivery of (i) full
payment for shares purchased and subscribed for by virtue of a Shareholder's
Rights, and (ii) a properly completed and executed Exercise Form, then such
exercise of Basic Subscription Rights and Oversubscription Rights shall be
regarded as timely, subject, however, to receipt of the duly executed Exercise
Form by the Agent within five business days after the Expiration Date.
(f) Within five business days following the Pricing Date as defined
in the Prospectus (the "Confirmation Date"), the Agent shall send a confirmation
to each Shareholder (or, for Shares on the Record Date held by Cede & Co. or any
other depository or nominee, to Cede & Co. or such other depository or nominee),
showing (i) the number of Shares acquired pursuant to the Basic Subscription
Rights, (ii) the number of Shares, if any, acquired pursuant to the
Oversubscription Rights, (iii) the per Share total purchase price for the
Shares, (iv) any amount payable to the Shareholder pursuant to Section 2(i), and
(v) any additional amount payable by such Shareholder to the Company or any
excess to be refunded by the Company to such Shareholder, in each case based on
the Subscription Price as determined on the Pricing Date. Any additional payment
acquired from a Shareholder must be received by the Subscription Agent within
ten business days after the Confirmation Date. Any excess payment to be refunded
by the Company to a Shareholder shall be mailed by the Subscription Agent to the
Shareholder within fifteen business days after the Confirmation Date, as
provided in Section 2(i) below.
(g) If, after allocation of Shares to persons exercising Basic
Subscription Rights, there remain unexercised Rights, then the Subscription
Agent shall allot the shares issuable upon exercise of such unexercised Rights
(the "Remaining Shares") to persons exercising Oversubscription Rights, in the
amounts of such oversubscriptions. If the number of shares for which
Oversubscription Rights have been exercised is greater than the Remaining
Shares, the Subscription Agent shall allot the Remaining Shares to the persons
exercising Oversubscription Rights pro rata based solely on the number of Shares
held on the Record Date.
(h) All proceeds from the exercise of Rights shall be held by the
Subscription Agent in a segregated, interest-bearing account in the name of the
Company. The Subscription 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.
(i) (1) The Subscription Agent shall mail to the Shareholders within
fifteen business days after the Confirmation Date and after full payment for
subscribed Shares has cleared: (i) certificates representing those shares
purchased pursuant to exercise of Basic Subscription Rights and those shares
purchased pursuant to the exercise of Oversubscription Rights; and (ii) in the
case of each Shareholder who subscribed and paid for the Shares at an assumed
purchase price greater than the actual per share purchase price, a refund in the
amount of the difference between the assumed purchase price and the actual
purchase price.
(2) The Subscription Agent shall deliver the proceeds of
the exercise of Rights to the Company as promptly as practicable, but in no
event later than fifteen business days after the Confirmation Date.
(j) The Subscription Agent shall account promptly to the Company with
respect to Rights exercised and concurrently account for all monies received and
returned by the Subscription Agent with respect to the purchase of Shares upon
the exercise of Rights.
(k) In the event the Subscription Agent does not receive, within ten
business days after the Confirmation Date, any amount due from a Shareholder as
specified in Section 2(f),then it shall take such action with respect to such
Shareholder's Subscription Rights as may be instructed in writing by the
Company, including, without limitation, (i) applying any payment actually
received by it toward the purchase of the greatest whole number of Shares which
could be acquired with such payment, (ii) allocating the shares subject to such
Subscription Rights to one or more other Shareholders, and (iii) selling all or
a portion of the Shares deliverable upon exercise of such Subscription Rights on
the open market, and applying the proceeds thereof to the amount owed.
(l) No Subscription Right shall entitle a Shareholder to vote or
receive dividends or be deemed the holder of Shares for any purpose, nor shall
anything contained in any Subscription Right be construed to confer upon any
Shareholder any of the rights of a shareholder of the Company or any right to
vote, given or withhold consent to any action by the Company (whether upon any
recapitalization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings or other action
affecting shareholders or receive dividends or otherwise, until the Rights
evidenced thereby shall have been exercised and the Shares
purchasable upon the exercise thereof shall have become deliverable as provided
in this Agreement and in the Prospectus.
SECTION 3. Issuance of Securities. The Company has authorized, and will
-----------------------
hold in reserve, a number of Shares sufficient to provide for the exercise of
the Rights.
SECTION 4. Form of Rights Certificates. The Rights Certificates (and the
----------------------------
subscription forms to purchase Shares) shall be substantially in the form
attached as Exhibit A hereto. Each Rights Certificate shall be dated as of the
date of issuance thereof by the Subscription Agent, and on its face shall
entitle the holder to subscribe and purchase one Share for each five (5) Rights
at the Subscription Price.
SECTION 5. Validation of Rights Certificates
---------------------------------
(a) The Rights Certificates shall be printed with the name of the
Company and the Subscription Agent as shown on Exhibit A, which printed names
shall be valid without further signature or countersignatures.
(b) The Subscription Agent shall maintain at its offices books and
records showing the holders of the Rights Certificates, the number of Rights
held and the disposition of those Rights, whether through exercise, expiration
or otherwise.
SECTION 6. Mutilated, Destroyed, Lost or Stolen Rights Certificates. Upon
---------------------------------------------------------
receipt by the Company and the Subscription Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, the Subscription Agent will make and deliver a new Rights
Certificate of like tenor to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated; or it shall issue those
Shares being purchased by a shareholder by the exercise of Rights if the
conditions to such issuance are otherwise met, e.g., payment, without
-----
replacement of a Rights Certificate. If the Company requires an indemnity bond,
such indemnity bond shall be in such form as shall be sufficient in the
Company's judgment to protect the Company from any loss which it may suffer if a
Rights Certificate is replaced.
SECTION 7. Subsequent Issuance of Rights Certificates. Subsequent to
-------------------------------------------
their original issuance, no Rights Certificates shall be issued except for split
up or exchange of Rights Certificates held by securities depositories, brokers
or other nominees or those issued in replacement of mutilated, destroyed, lost
or stolen Rights Certificates.
SECTION 8. Exercise of Rights. Only the registered holder of any Rights
-------------------
Certificate may exercise the Rights evidenced thereby in accordance with
instructions of the Rights Certificate and in the Prospectus.
SECTION 9. Reports. The Subscription Agent shall notify both the Company
--------
and its designated representatives by telephone as requested during the period
commencing with the mailing of the Rights Certificates and ending on the
Expiration Date, which notices shall thereafter be confirmed in writing, of (i)
the number of Rights exercised on the day requested, (ii) the number of Rights
for which defective exercises have been received on such day, and (iii) the
cumulative total of the information set forth in clauses (i) and (ii) above.
The Subscription Agent shall also maintain and update a listing of holders who
have fully or partially exercised their Rights, and holders who have not
exercised their Rights. The Subscription Agent shall provide the Company or its
designated representatives, upon their request, with the information compiled
pursuant to the Prospectus. The Subscription Agent will also make available
when reasonably requested by the Company, various other data including data
showing demographics of Shareholders who exercise Rights, and those who
participate in the oversubscription and, conversely, those who did not exercise
Rights or participate in the oversubscription.
SECTION 10. Future Instructions and Interpretations
---------------------------------------
(a) All questions concerning the timeliness, validity, form and
eligibility of any exercise of Rights will be determined by the Company, whose
determination will be final and binding. The Company in its sole discretion may
waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine, or reject the purported exercise
of any Right. Subscriptions will not be deemed to have been received or accepted
until all irregularities have been waived or cured within such time as the
Company determines in its sole discretion. Neither the Company nor the
Subscription Agent will be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Certificates or
incur any liability for failure to give such notification, although the
Subscription Agent will give such notices at the Company's request in certain
instances.
(b) The Subscription Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, President or Treasurer of the Company, and to apply to
any such officer for advice and instructions in connection with its duties, and
the Subscription Agent shall not be liable for any actions taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
SECTION 11. Payment of Taxes. The Company covenants and agrees that it
-----------------
will pay when due and payable all documentary stamp and other taxes, if any,
which may be payable in respect of the issuance and delivery of any Rights
Certificates or of the Shares purchasable upon the exercise of the Rights;
provided, however, that the Company shall not be liable for any tax liability
(i) arising out of any transaction which it results in, or is deemed to be, an
exchange of Rights or Shares or a constructive dividend with respect to Rights
or Shares or (ii) based on taxes on income.
SECTION 12. Cancellation and Destruction of Rights Certificates. All
----------------------------------------------------
Rights Certificates surrendered for the purpose of exercise shall, if
surrendered to the Company or to any of its agents, be delivered to the
Subscription Agent for cancellation or in cancelled form or, if surrendered to
the Subscription Agent, shall be cancelled by it, and no Rights Certificates
shall be issued in lieu thereof, except as expressly permitted by provisions of
this Agreement. The Subscription Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 13. Record Date. Each person in whose name a Share is issued in
------------
accordance with the terms hereof shall for all purposes be deemed to have become
the holder of record of such securities represented thereby on, and such
certificates shall be dated, the date the certificates are issued by the
Subscription Agent.
SECTION 14. Rights and Obligations of Subscription Agent under the
------------------------------------------------------
Prospectus.
-----------
(a) Not withstanding anything contained in this Agreement to the
contrary, and in addition to and not in lieu of any of the rights and
obligations of the Subscription Agent under this Agreement, the Subscription
Agent shall be bound by, and act in accordance with, the terms of the Prospectus
with respect to the Rights offering.
(b) The Subscription Agent shall provide services in a reasonable and
prudent manner so that it can efficiently handle the Rights Offering, including,
for example, issuing notices of deficiencies, refunds or collections,
communications with Shareholders or their representatives, and allocating Shares
requested and paid for by subscribing Shareholders in accordance with the terms
in the Prospectus.
SECTION 15. Concerning the Subscription Agent
---------------------------------
(a) The Company agrees to pay to the Subscription Agent reasonable
compensation for all services rendered by it hereunder as in a one page fee
schedule signed by the Company attached hereto, and, from time to time, on
demand of the Subscription Agent, its reasonable expenses and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder.
(b) The Subscription Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered, or omitted by it in
connection with its duties under this Agreement in reliance upon any Rights
Certificate, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and where necessary, guaranteed,
verified or acknowledged, by the proper person or persons.
SECTION 16. Merger or Consolidation or Change of Name of Subscription
---------------------------------------------------------
Agent
-----
(a) Any corporation into which the Subscription Agent or any successor
Subscription Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Subscription
Agent or any successor Subscription Agent shall be a party, or any corporation
succeeding to the business of the Subscription Agent or any successor
Subscription Agent, shall be the successor to the Subscription Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In the agency created by this Agreement any
of the Rights Certificates which shall have been printed with the name of the
Subscription Agent but not delivered, any such successor Subscription Agent may
adopt the name of the predecessor Subscription Agent and deliver such Rights
Certificates either in the name of the predecessor Subscription Agent or in the
name of the successor Subscription Agent; and, in all such cases, such Rights
Certificates shall have the full force and effect provided in the Rights
Certificates.
SECTION 17. Duties of Subscription Agent. The Subscription Agent
-----------------------------
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company by its acceptance
hereof shall be bound:
(a) The Subscription Agent may consult with legal counsel (who may be,
but it is not required to be, legal counsel for the Company), and the written
opinion of such counsel shall be full and complete authorization and protection
to the Subscription Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Subscription Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any two of the following: The Chairman of
the Board, the President and the Treasurer of the Company and delivered to the
Subscription Agent; Subscription Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Subscription Agent shall be liable hereunder only for its own
negligence, willful misconduct or bad faith.
(d) The Subscription Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same, but all such statements
and recitals (except the willingness of the Subscription Agent to act as such)
are and shall be deemed to have been made by the Company only.
(e) The Subscription Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Subscription Agent) or in respect of the
validity or execution of any Rights Certificate; nor shall it be responsible for
any breach by the Company of any covenant or condition contained in this
Agreement or in Rights Certificate; nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of
any Shares to be issued or as to whether any Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Subscription Agent for the carrying out or performing by the Subscription
Agent of the provisions of this Agreement.
(g) The Subscription Agent and any shareholder, director, officer or
employee of the Subscription Agent may buy, sell or deal in any other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to or otherwise act as
fully and freely as thought it were not Subscription Agent under this Agreement.
Nothing herein shall preclude the Subscription Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 18. Notices to the Company and Subscription Agent. All notices
----------------------------------------------
and other communications provided for or permitted hereunder shall be made by
hand delivery, overnight courier, telex, or facsimile transmission:
(a) if to the Company, to:
Blue Chip Value Fund, Inc.
0000 00xx Xxxxxx - 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxx
(b) if to the Subscription Agent, to:
ChaseMellon Shareholder Services, L.L.C.
Attn: Xxx Tinto, Assistant Vice President
000 Xxxxxxxx Xxxxx - 00xx Xxxxx
Xxxx Xxxxxxxx, XX 00000
All such notices and communications shall be deemed to have been duly
given, when delivered by hand, if personally delivered; the next day after being
sent by overnight delivery, if sent as aforesaid with guaranteed next day
delivery; when answered back, if telexed; and when receipt acknowledged, if
facsimile transmission is used.
SECTION 19. Supplements and Amendments. The Company and the Subscription
---------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to cure any ambiguity or
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Subscription Agent may deem necessary or desirable.
SECTION 20. Successors. All the covenants and provisions of this
-----------
Agreement by or for the benefit of the Company or the Subscription Agent shall
bind and insure to the benefit of their respective successors and assigns
hereunder.
SECTION 21. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
SECTION 22. Benefits of this Agreement. Nothing in this Agreement shall
---------------------------
be construed to give to any person or corporation other than the Company and the
Subscription Agent any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for sole and exclusive benefit of the
Company and the Subscription Agent.
SECTION 23. Counterparts. This Agreement may be executed in any number of
-------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 24. Description Headings. Descriptive headings of the several
---------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 25. Entire Agreement. This Agreement is intended by the parties
-----------------
as a final expression of their agreement and is intended to be a complete and
exclusive statement of this agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
SECTION 26. Force Majeure. If by reason of war or armed hostilities or
--------------
other calamity, act of God or act of any court, government or governmental,
administrative or regulatory authority or agency or similar power beyond the
Company's reasonable control, the Company is prevented or restrained from
completing the transactions contemplated hereby, then the Company and the
Subscription Agent shall have no responsibility for, or obligations with respect
thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
BLUE CHIP VALUE FUND, INC.
By:_____________________________________
Name:
Title:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:_____________________________________
Name:
Title:
EXHIBIT
CONFIDENTIAL: REORGANIZATION FEE SCHEDULE APPROVAL FORM
ATTN: Xxxxx Wine APPROVED:
FUND: BLUE CHIP VALUE FUND, INC.
Description: Rights Subscription Offering
4,300 Accounts (approximated)
BASICS:
1. "Good Order" Processing $8.00 per L/T
(includes issuance of one (1) certificate)
2. Defect/Reject $5.00 per L/T
3. Legal $5.00 per L/T
4. Protect $15.00 per L/T
5. Partial/Transfers/Splits $00.50 per L/T
6. Withdrawal N/A per
7. Return/Late Items $2.00 per L/T
8. Excess Debit $00.50 per certificate
PARTICULARS
10. Calculation and Issuance of
Rights Certificate $1.50 per certificate
11. Step-up Privilege $ per L/T
12. Proration (Straight/equally applied)* $3.00 per account
13. Oversubscription $3.00 per account
SPECIALS
14. Expiration (applicable on a per basis
which includes each extension)
A. Normal - up to 5:00 p.m. EST $ 600.00
B. Special - 5:00 p.m. to 12:00 p.m. EST $1,200.00
15. Production (in addition to regular production, e.g. Extended List, etc.)
A. Lists negotiable depending upon requirements.
B. Tapes negotiable depending upon requirements.
C. Copies negotiable depending upon requirements.
*Other than a "straight" proration is subject to negotiation.
16. MINIMUM (exclusive of out-of-pocket expenses
and expiration costs) $10,000.00
If applicable, the above mentioned is a minimum for the
first month and subjected to renegotiation thereafter.
-----
Administrator: Xxx Tinto, Assistant Vice President
CMSS - Hartford, CT
(000) 000-0000
