Exhibit (k)(3)
September 27, 2003
Xxxxxxxx Convertible Fund, Inc.
00 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Re: Letter of Agreement
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Gentlemen:
This Letter of Agreement, including the Appendix attached hereto (collectively,
this "Agreement"), sets forth the terms and conditions of the engagement of
Xxxxxxxxx Shareholder Communications Inc. ("GSC") Xxxxxxxx Convertible Fund,
Inc. (the "Company") to act as Information Agent in connection with its Rights
Offering (the "Offer"). The term of the Agreement shall be the term of the
Offer, including any extensions thereof.
(a) Services. GSC shall perform the services described in the Fees &
Services Schedule attached hereto as Appendix I (collectively,
the "Services").
(b) Fees. In consideration of GSC's performance of the Services, the
Company shall pay GSC the amounts, and pursuant to the terms, set
forth on the Fees & Services Schedule attached hereto as Appendix
I.
(c) Expenses. In connection with GSC's performance of the Services,
and in addition to the fees and charges discussed in paragraph
(b) and (d) hereof, the Company agrees that it shall be solely
responsible for the following costs and expenses, and that the
Company shall, at GSC's sole discretion, (i) reimburse GSC for
such costs and expenses actually incurred by GSC, (ii) pay such
costs and expenses directly and/or (iii) advance sufficient funds
to GSC for payment of such costs and expenses:
. expenses incidental to the Offer, including postage and
freight charges incurred in delivering Offer materials;
. expenses incurred by GSC in working with its agents or
other parties involved in the Offer, including charges
for bank threshold lists, data processing, telephone
directory assistance, facsimile transmissions or other
forms of electronic communication;
. expenses incurred by GSC at the Company's request or
for the Company's convenience, including copying
expenses, expenses
Xxxxxxxx Convertible Fund, Inc.
September 28, 2003
Page 2
relating to the printing of additional and/or
supplemental material and travel expenses of GSC's
executives;
. any other fees and expenses authorized by the Company
and resulting from extraordinary contingencies which
arise during the course of the Offer, including fees
and expenses for advertising, media relations, stock
watch and analytical services.
(d) Custodial Charges. GSC agrees to check, itemize and pay on the
Company's behalf the charges of brokers and banks, with the
exception of ADP Proxy Services and Prudential Securities which
will xxxx the Company directly, for forwarding the Company's
Offer material to beneficial owners. The Company agrees to
provide GSC, prior to the commencement of the initial
distribution of Offering materials to such brokers and banks,
with a preliminary payment equal to 75% of GSC's good faith
estimate of the charges which shall be assessed by such brokers
and banks for two distributions of such materials. The Company
shall pay GSC an administrative fee of five dollars ($5.00) for
each broker and bank invoice paid by GSC on the Company's behalf.
If the Company prefers to pay these bills directly, please strike
out and initial this clause before returning the executed
Agreement.
(e) Compliance with Applicable Laws. The Company and GSC hereby
represent to one another that each shall use its best efforts to
comply with all applicable laws relating to the Offer, including,
without limitation, the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(f) Indemnification. The Company agrees to indemnify and hold
harmless GSC and its stockholders, officers, directors,
employees, agents and affiliates against any and all claims,
costs, damages, liabilities, judgments and expenses, including
the fees, costs and expenses of counsel retained by GSC
("Losses"), which result from claims, actions, suits, subpoenas,
demands or other proceedings brought against or involving GSC
which directly relate to or arise out of GSC's performance of the
Services (except for costs, damages, liabilities, judgments or
expenses which shall have been determined by a court of law
pursuant to a final and nonappealable judgment to have directly
resulted from GSC's own negligence or intentional misconduct). To
the extent the company suffers Losses as a direct result of GSC's
own negligence or willful misconduct, GSC agrees to indemnify and
hold harmless the Company and its stockholders, officers,
directors, employees, agents and affiliates. In addition, the
prevailing party shall be entitled to reasonable attorneys' fees
and court costs in any action between the parties to enforce the
provisions of this Agreement, including the indemnification
rights contained in this paragraph. The indemnity obligations set
forth in this paragraph shall survive the termination of this
Agreement.
Xxxxxxxx Convertible Fund, Inc.
September 28, 2003
Page 3
(g) Governing Law. This Agreement shall be governed by the
substantive laws of the State of New York without regard to its
principles of conflicts of laws, and shall not be modified in any
way, unless pursuant to a written agreement which has been
executed by each of the parties hereto. The parties agree that
any and all disputes, controversies or claims arising out of or
relating to this Agreement (including any breach hereof) shall be
subject to the jurisdiction of the federal and state courts in
New York County, New York and the parties hereby waive any
defenses on the grounds of lack of personal jurisdiction of such
courts, improper venue or forum non conveniens.
(h) Exclusivity. The Company agrees and acknowledges that GSC shall
be the sole Information Agent retained by the Company in
connection with the Offer, and that the Company shall refrain
from engaging any other Information Agent to render any Services,
in a consultative capacity or otherwise, in relation to the
Offer.
(i) Additional Services. In addition to the Services, the Company may
from time to time request that GSC provide it with certain
additional consulting or other services. The Company agrees that
GSC's provision of such additional services shall be governed by
the terms of a separate agreement to be entered into by the
parties at such time or times, and that the fees charged in
connection therewith shall be at GSC's then-current rates.
(j) Confidentiality. GSC agrees to preserve the confidentiality of
(i) all material non-public information provided by the Company
or its agents for GSC's use in fulfilling its obligations
hereunder and (ii) any information developed by GSC based upon
such material non-public information (collectively, "Confidential
Information"). For purposes of this Agreement, Confidential
Information shall not be deemed to include any information which
(w) is or becomes generally available to the public in accordance
with law other than as a result of a disclosure by GSC or any of
its officers, directors, employees, agents or affiliates; (x) was
available to GSC on a nonconfidential basis and in accordance
with law prior to its disclosure to GSC by the Company; (y)
becomes available to GSC on a nonconfidential basis and in
accordance with law from a person other than the Company or any
of its officers, directors, employees, agents or affiliates who
is not otherwise bound by a confidentiality agreement with the
Company or is not otherwise prohibited from transmitting such
information to a third party; or (z) was independently and
lawfully developed by GSC based on information described in
clauses (w), (x) or (y) of this paragraph. The Company agrees
that all reports, documents and other work product provided to
the Company by GSC pursuant to the terms of this Agreement are
for the exclusive use of the Company and may not be disclosed to
any other person or entity without the prior written consent of
GSC. The confidentiality obligations set forth in this paragraph
shall survive the termination of this Agreement.
Xxxxxxxx Convertible Fund, Inc.
September 28, 2003
Page 4
(k) Entire Agreement; Appendix. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties hereto with respect to
the subject matter hereof. The Appendix to this Agreement shall
be deemed to be incorporated herein by reference as if fully set
forth herein. This Agreement shall be binding upon all successors
to the Company (by operation of law or otherwise).
If the above is agreed to by you, please execute and return the
enclosed duplicate of this Agreement to Xxxxxxxxx Shareholder
Communications Inc., 00 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx Xxxx, Contract Administrator.
Sincerely,
XXXXXXXXX SHAREHOLDER
COMMUNICATIONS INC.
By:
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Xxxxx X. Xxxx
Title: Director
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Agreed to and accepted as of
the date first set forth above:
Xxxxxxxx Convertible Fund, Inc
By:
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Xxxx X. Xxxxxx
Title: Vice President and Treasurer
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APPENDIX I
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FEES & SERVICES SCHEDULE
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BASE SERVICES $ 7,500
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.. Advance review of Offer documents
.. Assistance in preparation and posting of advertisements
and news releases
.. Dissemination of Offer documents to bank and broker
community
.. Communication with bank and broker community and all
institutional shareholders during Offer period
PREMIUM SERVICES
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.. Direct telephone communication with retail holders (i.e.,
registered and TBD NOBO shareholders) TBD
. $5.00 per completed call (incoming and outgoing) ----------
.. Dedicated toll-free phone line
NOTE: The foregoing fees are exclusive of reimbursable expenses as described in
paragraph (c) of this Agreement. In addition, the Company will be charged a fee
of $1,000 if the Offer is extended for any reason.
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FEE PAYMENT INSTRUCTIONS
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The Company shall pay GSC as follows:
.. Upon execution of this Agreement, the Company shall pay GSC $3,750, which
amount is in consideration of GSC's commitment to represent the Company and
is non-refundable;
.. Upon completion of the Offer, the Company shall pay GSC the sum of (i)
$3,750, (ii) any variable fees for Premium Services (e.g., telephone calls)
which shall have accrued over the course of the Offer and (iii) all
reimbursable expenses.
GSC will send the Company an invoice for each of the foregoing payments.
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