Exhibit d(vi)
SUBSCRIPTION AGENT AGREEMENT
CIGNA HIGH INCOME SHARES
This Subscription Agent Agreement (the "Agreement") is made as of
October 7, 1997 between CIGNA High Income Shares (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. 811-05495,
333-37569) filed by the Company with the Securities and Exchange Commission on
October 9, 1997, 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 "Exercise Forms ") to shareholders of record (the
"Shareholders") of its Common Shares, no par value ("Common Shares"), as of a
record date to be specified by the Company (the "Record Date"), pursuant to
which each Shareholder will have certain rights (the "Rights") to subscribe for
Common Shares, 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 Exercise Forms 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
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subscription agent in connection with the distribution of Exercise Forms 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 EXERCISE FORMS .
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(a) Each Exercise Form shall be irrevocable and non- transferable. The
Agent shall, in its capacity as Transfer Agent of the Company, maintain a
register of Exercise Forms and the holders of record thereof (each of whom shall
be deemed a "Shareholder" hereunder for purposes of determining the rights of
holders of Exercise Forms ). Each Exercise Form 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 Common Shares
equal to one Common Share for every three Rights (the "Primary Subscription
Right"); and
(2) With respect to Record Date Shareholders only, the right
to subscribe for additional Common Shares, 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 EXERCISE FORMS.
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(a) Each Exercise Form shall evidence the Rights of the Shareholder
therein named to purchase Common Shares 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 Exercise Forms in
the names of the Shareholders, setting forth the number of Rights to subscribe
for the Company's Common Shares calculated on the basis of one Right for each
Common Share 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 Exercise Form 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
Exercise Form, 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
Exercise Form 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 Exercise Form 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 Exercise Form 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.
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(a) Record Date Shareholders may acquire Common Shares on Primary
Subscription and pursuant to the Over-Subscription Privilege by delivery to the
Agent as specified in the Prospectus of (i) the Exercise Form with respect
thereto, duly executed by such Shareholder in accordance with and as provided by
the terms and conditions of the Exercise Forms, together with (ii) the estimated
purchase price of (as disclosed in the Prospectus) for each Common Share
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 Exercise Form 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 Exercise Form 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 Common Shares subscribed for on Primary
Subscription and any additional Common Shares subscribed for pursuant to the
Over-Subscription Privilege, and (ii) a properly completed and executed Exercise
Form, then such exercise of Primary Subscription Rights and Over-Subscription
Rights shall be regarded as timely, subject, however, to receipt of the duly
executed Exercise Form and full payment for the Common Shares (based on the
estimated purchase price) by the Agent within three Business Days (as defined
below) after the Expiration Date (the "Protect Period") and full payment for
their Common Shares 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 Subscription Price per Common Share will be the net asset value
per Common Share at the close of business on the Expiration Date (the "Pricing
Date"). Within five Business Days following the Pricing Date (the "Confirm
Date") the Agent shall send to each exercising shareholder (or, if Common Shares
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 Common Shares 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 an explanation of the allocation of shares of Common Shares 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 ("Excess Payments") 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
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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 Common Shares to Record
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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 Common Shares owned by them
on the Record Date. The percentage of Remaining Shares each over-subscribing
Record Date Shareholder may acquire will be rounded up or down to result in
delivery of Common Shares. 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 certificates
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representing those Common Shares purchased pursuant to exercise of Primary
Subscription Rights and certificates representing those shares purchased
pursuant to the exercise of the Over-Subscription Privilege as soon as
practicable after the Expiration Date, full payment for such shares has been
received and cleared and after all allocations have been effected.
8. HOLDING PROCEEDS OF RIGHTS OFFERING IN ESCROW.
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(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 separate bank account.
(b) After expiration of the offer and upon instruction from the
Company, the Agent shall immediately deliver all good funds received in respect
of the exercise of Rights to the Company. Proceeds with respect to Excess
Payments shall be returned by the Company to shareholders in the manner
described in Section 4(e).
9. REPORTS.
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(a) Daily, during the period commencing on the first business day after
the Record Date of the offering, 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 Common Shares 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 Exercise Form is lost, stolen, mutilated or
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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 Exercise Form include the surrender and cancellation
thereof), issue a new Exercise Form of like denomination in substitution for the
Exercise Form so lost, stolen, mutilated or destroyed.
11. COMPENSATION FOR SERVICES. The Company agrees to pay to the Agent
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compensation for its services as such in accordance with its Fee Schedule to act
as Agent 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
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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 EXERCISE FORMS. The Agent may, without the consent or
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concurrence of the Shareholders in whose names Exercise Forms are registered, by
supplemental agreement or otherwise, concur with the Company in making any
changes or corrections in an Exercise Form 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 Exercise Form except insofar
as any such change may confer additional rights upon the Shareholders.
14. ASSIGNMENT, DELEGATION.
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(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
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Agreement shall be governed by the law of the State of New York.
16. SEVERABILITY. The parties hereto agree that if any of the provisions
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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
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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
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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
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shall constitute a legal, valid and binding execution hereof by such party.
20. FURTHER ACTIONS. Each party agrees to perform such further acts and
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execute such further documents as are necessary to effect the purposes of this
Agreement.
21. ADDITIONAL PROVISIONS. Except as specifically modified by this
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Agreement, the Agent's rights and responsibilities set forth in the Agreement
for Shares Transfer Services between the Company and the Agent are hereby
ratified and confirmed and continue in effect.
STATE STREET BANK & TRUST COMPANY CIGNA HIGH INCOME SHARES
/s/ Xxxxxxx X. XxxXxxxxxx /s/ Xxxxxx X. Xxxxxxx III
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SIGNATURE SIGNATURE
President, Boston EquiServe L.P.,
Authorized Agent Vice President and Treasurer
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TITLE TITLE
FEE SCHEDULE FOR CIGNA HIGH INCOME SHARES RIGHTS OFFERING
ADMINISTRATIVE FEE $ 5,000.00
OTHER SERVICES
SUBSCRIPTION FORM GENERATION (PER FORM) $ 1.50
SUBSCRIPTION FORM PROCESSING (PER FORM) $ 9.00
DEFECTIVE ITEMS $ 12.00
GUARANTEE OF DELIVERY (PER FORM) $ 15.00
MINIMUM FEE FOR OTHER SERVICES $ 5,000.00
