LIBERTY ALL STAR GROWTH FUND, INC.
SUBSCRIPTION RIGHTS AGENCY AGREEMENT
This Subscription Rights Agency Agreement (the "Agreement") is made as of this
18th day of May, 1998, by and between LIBERTY ALL STAR GROWTH FUND, INC., a
Maryland corporation (the "Fund"); and State Street Bank and Trust Company, a
national banking association, as subscription and distribution agent ("Agent").
WHEREAS, the Fund proposes to make a subscription offer by issuing certificates
or other evidences of subscription rights, in the form designated by the Fund
(the "Subscription Certificates"), to holders of record (the "Shareholders") of
shares of common stock par value $ .10 per share of the Fund ("Shares"), as of a
record date specified by the Fund (the "Record Date"), pursuant to which each
Shareholder will have certain rights (the "Rights") to subscribe for additional
Shares as described in and upon such terms as are set forth in the final
prospectus (the "Prospectus") with respect to the Form N-2 Registration
Statement originally filed by the Fund with the Securities and Exchange
Commission on April --, 1998, in accordance with the applicable requirements of
the Securities Act of 1933, as amended (the "Act");
WHEREAS, the Fund wishes the Agent to perform certain acts on its behalf, 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. Pursuant to resolution of its Board of Directors, the Fund hereby appoints
and authorizes the Agent to act on its behalf in accordance with the
provisions hereof, and the Agent hereby accepts such appointment and agrees
to so act.
2. (a) Each Subscription Certificate shall evidence the
Rights of the Shareholder therein named to
purchase Shares upon the terms and conditions
therein and herein set forth.
(b) Upon the written advice of the Fund signed by its Chairman, President,
Secretary or Assistant Secretary, as to the Record Date, the Agent
shall, from a list of Shareholders as of the Record Date to be prepared
by the transfer agent of the Fund, prepare and record Subscription
Certificates in the names of the Shareholders, setting forth the number
of Rights to subscribe to Shares calculated on the basis of one Right
for each Share recorded on the books of the Fund in the name of each
such Shareholder as of the Record Date.
3. Rights and Issuance of Subscription Certificates.
(a) Each Subscription Certificate shall be non-transferable and shall,
unless exercised by the holder thereof in the manner set forth in the
Prospectus, expire upon the expiration of the offer. The Agent shall
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) The right (the "Primary Subscription Right") to purchase a number
of Shares equal to one Share for every ten Rights; provided, however,
that no fractional Shares shall be issued; and
(2) The right (the "Over-Subscription Right") to purchase additional
Shares, subject to the availability of such shares and to allotment of
such shares as may be available among Shareholders who exercise
Over-Subscription Rights on the basis specified in the Prospectus;
provided, however, that a Shareholder who has not exercised his Primary
Subscription Right with respect to the full number of shares (other
than those primary subscription rights that cannot be excercised
because they represent the right to subscribe for less than one share)
that such Shareholder is entitled to purchase by virtue of his Primary
Subscription Right as of the Expiration Date (as hereinafter defined),
if any, shall not be entitled to any Over-Subscription Right.
(b) A Shareholder may exercise his Primary Subscription Right and
Over-Subscription Right by delivery to the Agent at its corporate
office 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 subscription price for
each Share subscribed for by exercise of such Rights, including Shares
subscribed for on exercise of Over-Subscription Rights, in United
States dollars by money order or check drawn on a bank located in the
United States and in each case payable to the order of Liberty All Star
Growth Fund, Inc..
(c) 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 City time on such date as the Fund 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 one of the offices of the Agent specified in the
Prospectus.
(d) Not withstanding the provisions of Section 3(b) and 3(c) above
regarding delivery of an executed Subscription Certificate to the Agent
prior to 5:00 P.M. New York City time on the Expiration Date, if prior
to such time the Agent receives a properly completed and executed
Notice of Guaranteed Delivery in the form approved by the Fund by
facsimile or otherwise from a bank or trust company or a New York Stock
Exchange or National Association of Securities Dealers Member
Firm guaranteeing delivery of (i) payment of the full subscription
price for Shares subscribed for by excercise of rights, including
Shares subscribed for an exercise of Over-Subscription Rights, shall be
regarded as timely, subject, however, to receipt of the duly-executed
Subscription Certificate, together will full payment, by the Agent
within three business days after the Expiration Date.
(e) On a date (the "Confirmation Date") that is no later than eight
business days after the Expiration Date (as defined in the Prospectus),
the Agent shall send a confirmation to each Shareholder (or, for Shares
held on the Record Date 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 Primary Subscription
Rights, (ii) the number of Shares, if any, acquired pursuant to the
Over-Subscription Rights, (iii) the per share and total purchase price
for the shares, (iv) any amount payable to the Shareholder pursuant to
Section 8 below, and (v) any additional amount payable by the
Shareholder to the Fund or any excess to be refunded by the Fund to the
Shareholder, in each case based on the Subscription Price as determined
in accordance with the Prospectus. Any additional payment required from
a Shareholder must be received by the Agent within ten business days
after the Confirmation Date. Any excess payment to be refunded by the
Fund to a Shareholder shall be mailed by the Agent to the Shareholder
with the confirmation.
4. If, after allocation of Shares to persons exercising
Primary Subscription Rights, there remain unexercised
Rights, then the Agent shall allot the shares
issuable upon exercise of such unexercised Rights
(the "Remaining Shares") to persons exercising
Over-Subscription Rights, in the amounts of such
over-subscriptions. If the number of shares for
which Over-Subscription Rights have been exercised is
greater than the Remaining Shares, the Agent shall
allot the Remaining Shares to the persons exercising
Over-Subscription Rights pro rata based solely on the
number of Shares held on the Record Date in
accordance tot he Prospectus.
5. All proceeds from the exercise of Rights shall be held by the Agent in a
segregated, interest-bearing account in the name of the Fund. The Agent
shall advise the Fund immediately upon the completion of the allocation set
forth above as to the total number of Shares subscribed for and
distributable.
6. (a) The Agent shall mail to the Shareholders as soon as practicable after
the Confirmation Date and after full payment for the Shares subscribed for
has cleared certificates representing those Shares purchased pursuant to
exercise of Primary Subscription Rights and those Shares purchased pursuant
to the exercise of Over-Subscription Rights.
(b) The Agent shall deliver the proceeds of the exercise of Rights to the
Fund as promptly as practicable, but in no event later than 20 business
days after the Expiration Date.
7. The Agent shall account promptly to the Fund with respect to Rights
exercised and concurrently account for all monies received and returned by
the Agent with respect to the purchase of Shares upon the exercise of
Rights.
8. In the event the Agent does not receive, within
twelve business days after the Confirmation Date, any
amount due from a Shareholder as specified in Section
3 (e), then it shall take such action with respect to
such Shareholder's Rights as may be instructed in
writing by the Fund, 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 Rights on the open market, and
applying the proceeds thereof to the amount owed.
(8a) To the extent any of the provisions of paragraphs 1 through 8 above are
inconsistent with the Prospectus, the provisions of the Prospectus shall
govern and apply.
9. No Subscription Certificate 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 Certificate be
construed to confer upon any Shareholder any of the
rights of a shareholder of the Fund or any right to
vote, give or withhold consent to any action by the
Fund (whether upon any recapitalization, issue of
stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of
meetings of 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.
10. (a) The Fund covenants that all Shares issued upon
exercise of the Rights will be validly issued,
fully paid, non-assessable and free of
preemptive rights.
(b) Upon request, the Fund shall furnish to the Agent an opinion of counsel
or other evidence satisfactory to the Agent to the effect that a
registration statement is then in effect with respect to its Shares
issuable upon exercise of the Rights set forth in the Subscription
Rights. Upon written advice to the Agent that the Securities and
Exchange Commission shall have issued or threatened to have issued any
order preventing or suspending the use of the Prospectus, or if for any
reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Act, the Agent shall cease acting hereunder
until receipt of written instructions from the Fund and such assurances
as it may reasonably request that it may comply with such instruction
without violations of the Act.
11. (a) Any corporation into which the Agent may be
merged or converted or with which
it may be consolidated, or any
corporation resulting from any merger, conversion
or consolidation to which the Agent
shall be a party, or any corporation
succeeding to the corporate trust business of
the Agent, shall be the successor to the Agent
hereunder without the execution or filing of any
document by any of the parties hereto, provided
that such corporation would be eligible for
appointment as a successor to the Agent. In
case at the time such successor to the Agent
shall succeed to the agency created by this
Agreement, any of the Subscription Certificates
shall have been countersigned but not delivered,
any such successor to the Agent may adopt the
countersignature of the Agent and deliver such
Subscription Certificates as countersigned, and
in case at that time any of the Subscription
Certificates shall not have been countersigned,
the successor to the Agent may countersign such
Subscription Certificates either in the name of
the Agent or in the name of the successor Agent,
and in all such cases such Subscription
Certificates shall have the full force and legal
effect provided in the Subscription Certificates
and in this Agreement.
(b) If, at any time, the name of the Agent shall be changed and at such
time any of the Subscription Certificates shall have been countersigned
but not delivered, the Agent may adopt the countersignature under its
prior name and deliver Subscription Certificates so countersigned, and
in case at that time any of the Subscription Certificates shall not
have been countersigned, the Agent may countersign such Subscription
Certificates either in its prior name or in its changed name, and in
all such cases such Subscription Certificates shall have the full force
provided in the Subscription Certificates and in this Agreement.
12. The Fund agrees to pay to the Agent at the completion
of the offering, on demand of the Agent, the
compensation for all services rendered by it
hereunder and its reasonable out-of-pocket expenses
and other disbursements incurred in the
administration and execution of this Agreement and
the exercise and performance of its duties hereunder,
all as provided for in Appendix A attached hereto.
13. The Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms
and conditions:
(a) Whenever in the performance of its duties under this Agreement the
Agent shall deem it necessary or desirable that any fact or matter be
proved or established, prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect
thereof is herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board or President or a Vice President or the Secretary
or Assistant Secretary or the Treasurer of the Fund delivered to the
Agent, and such certificate shall be full authorization to the Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(b) The Agent shall not be responsible for and the Fund shall indemnify and
hold the Agent harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to all actions of the Agent or its agents or
subcontractors required to be taken pursuant to this Agreement,
provided that such actions are taken in good faith and without
negligence or willful misconduct.
(c) The Agent shall be liable hereunder only for its own bad faith,
negligence, or misconduct, and for the bad faith, negligence or
misconduct of its agents or subcontractors.
(d) Nothing herein shall preclude the Agent from
acting in any other capacity for the Fund or for
any other legal entity;
(e) The Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any officer or
assistant officer of the Fund and to apply to any such officer or
assistant officer of the Fund for advice or instructions in connection
with its duties, and shall be indemnified and not be liable for any
action taken or suffered by it in good faith in accordance with
instructions of any officer or assistant officer of the Fund; and
(f) The Agent shall be indemnified and shall incur no liability for or in
respect of any action taken, suffered, or omitted by it in reliance
upon any Subscription Certificate or Certificate for Shares, instrument
of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other
paper or document that it reasonably believes to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper person or persons.
14. 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 Fund in
making any changes or corrections in a Subscription
Certificate that it shall have been advised by
counsel (who may be counsel for the Fund) 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 provisions of the Subscription Certificate
or the Prospectus except insofar as any such change
may confer additional rights upon the Shareholders.
15. All the covenants and provisions of this Agreement by or for the benefit of
the Fund or the Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
16. The validity, interpretation and performance of this
Agreement shall be governed by the law of the
Commonwealth of Massachusetts.
STATE STREET BANK AND TRUST COMPANY LIBERTY ALL-STAR GROWTH FUND, INC.
