EXHIBIT 99(D)(5)
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STATE STREET BANK AND TRUST COMPANY
SUBSCRIPTION DISTRIBUTION AND ESCROW AGENCY AGREEMENT
This Subscription, Distribution and Escrow Agency Agreement (the "Agreement") is
made as of between The Korean Investment Fund, Inc. a Maryland
Corporation and State Street Bank and Trust Company, a national banking
association, as subscription, distribution and escrow agent ("Agent").
WHEREAS, The Korean Investment Fund, Inc. proposes to make a subscription offer
by issuing certificates or other evidences of subscription rights, in the form
designated by The Korean Investment Fund, Inc. ("Subscription Certificates") to
shareholders of record ("Record Date Shareholders") of its Common Stock as of a
record date specified by The Korean Investment Fund, Inc. (the "Record Date"),
pursuant to which each Record Date Shareholder will have certain rights (the
"Rights") to subscribe to shares of The Korean Investment Fund, Inc. Common
Stock par value $.01 ("Common Stock"), as described in and upon such terms as
are set forth in the prospectus (the "Prospectus") included in the Form N-2
Registration Statement filed by The Korean Investment Fund, Inc. with the
Securities and Exchange Commission on August 16, 1995, as amended by any
amendment filed with respect thereto (the "Registration Statement");
WHEREAS, The Korean Investment Fund, Inc. wishes the Agent to perform certain
acts on behalf of The Korean Investment Fund, Inc. 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 Korean Investment
Fund, Inc. 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
Record Date Shareholder therein named to purchase Common Stock upon
the terms and conditions therein and herein set forth.
(b) Upon the written advice of The Korean Investment Fund, Inc. signed by
its Chairman, President, Secretary or Assistant Secretary, as to the
Record Date, the Agent shall, from a list of The Korean Investment
Fund, Inc. Shareholders as of the Record Date to be delivered to the
Agent by The Korean Investment Fund, Inc. Transfer Agent, prepare and
record Subscription Certificates in the names of the Record Date
Shareholders, setting forth the number of Rights to subscribe to The
Korean Investment Fund, Inc. Common Capital Stock calculated on the
basis of one right for each share recorded on The Korean Investment
Fund, Inc. books in the name of each such Record Date Shareholder as
of the Record Date. Each Subscription Certificate shall be dated as
of the Record Date and shall be executed manually or by facsimiles
signature of a duly authorized Officer of The Korean Investment Fund,
Inc. Upon the written advice, signed as aforesaid, as to the
effective date of the Registration Statement, the Agent shall as
promptly as practicable countersign and deliver the Subscription
Certificates, together with a copy of the Prospectus, to all Record
Shareholders.
No Subscription Certificate shall be valid for any purpose unless so
executed. Should any Officer whose signature has been placed upon any
Subscription Certificate cease to hold such office at any time
thereafter, such event shall have no effect on the validity of such
Subscription Certificate.
3. (a) Each Subscription Certificate shall be irrevocable and non-
transferable. The Agent shall maintain a register of Subscription
Certificates and the holders of record thereof (each of whom shall be
deemed a "Record Date Shareholder" hereunder for purposes of
determining the rights of holders of Subscription Certificates). Each
Subscription Certificate shall, subject to the provisions thereof,
entitle the Record Date Shareholder in whose name it is recorded to
the following:
(1) The right (the "Basic Subscription Right") to purchase a number
of shares of Common Stock equal to one share of Common Stock for
every three Subscription Rights; provided, however, that no
fractional shares of Common Stock shall be issued; and
(2) The right (the "Oversubscription Right") to purchase from The
Korean Investment Fund, Inc. additional shares of Common Stock,
subject to the availability of such shares and to allotment of
such shares as may be available among Record Date Shareholders
who exercise Oversubscription Rights on the basis specified in
the Prospectus; provided, however, that a Record Date Shareholder
who has not exercised his Basic Subscription Rights with respect
to the full number of shares that such Record Date Shareholder is
entitled to purchase by virtue
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of his Basic Subscription Rights as of the Expiration Date, if
any, shall not be entitled to any Oversubscription Rights.
(b) A Record Date Shareholder may exercise his Basic Subscription Rights
and Oversubscription Rights 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 Record Date Shareholder in
accordance with and as provided by the terms and conditions of the
Subscription Certificate, together with (ii) the purchase price of
for each share of Common Stock subscribed for by exercise of such
Rights, in United States dollars in cash, by check, or bank draft
drawn on a bank in the continental United States or by postal,
telegraphic, or express money order, in each case payable to the order
of The Korean Investment 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. Eastern Daylight Time on such date as The Korean Investment Fund,
Inc. 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 corporate office of the Agent
specified in the Prospectus.
(d) Not withstanding the provisions of Section 3(b) and 3(c) regarding
delivery of an executed Subscription Certificate 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 telegram
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 Rights Holder's Rights, and (ii) a
properly completed and executed Subscription Certificate, then such
exercise of Basic Subscription Rights and Oversubscription Rights
shall be regarded as timely, subject, however, to receipt of the duly
executed Subscription Certificate and full payment for the Capital
Common Stock by the Agent within three business days after the
Expiration Date (as defined in the Prospectus).
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(e) Within eight business days following the Expiration Date (the
"Confirmation Date"), the Agent shall send a confirmation to each
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), 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 and total purchase price for the shares, (iv) any
amount payable to the Shareholder pursuant to Section 9, and (v) any
excess to be refunded by The Korean Investment Fund, Inc. to such
Shareholder, in each case based on the Subscription Price. Any excess
payment to be refunded by The Korean Investment Fund, Inc. to a
Shareholder, shall be mailed by the Agent to the Shareholder within
EIGHT BUSINESS days after the Expiration Date, as provided in Section
6 below.
4. If, after allocation of shares of Common Stock to persons exercising Basic
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 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 Agent shall allot the Remaining Shares to the persons
exercising Oversubscription Rights pro rata based solely on the number of
Basic Subscription Rights exercised by each of them. The Agent shall
advise The Korean Investment Fund, Inc. (the Company) immediately upon the
completion of the allocation set forth above as to the total number of
shares subscribed and distributable.
5. (a) The Agent, will deliver (i) certificates representing those shares
purchased pursuant to exercise of Basic 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; (ii)
certificates representing those share purchased pursuant to the exercise of
Oversubscription Rights as soon as practicable after the Expiration Date
and after all allocations have been effected; (iii) in the case of each
Rights Holder whose rights were sold pursuant to Section 9, within FIFTEEN
BUSINESS days after the Expiration Date, proceeds of such sale (provided,
however, that proceeds of sales on behalf of Record Date Shareholders whose
Subscription Certificates are
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undeliverable shall be held by the Agent until they are either claimed or
escheated); (iv) in the case of each Record Date Shareholder who
subscribed, pursuant to the exercise of Oversubscription Rights, for a
greater number of shares than was allotted to such Record Date Shareholder
under Section 4, within EIGHT BUSINESS days after the Expiration Date, and
refund (and interest on such) in the amount of the difference between the
purchase price delivered for the shares subscribed for pursuant to the
exercise of such Oversubscription Rights and the purchase price of the
shares so allotted under Section 4 (an "Excess Payment"); (v) in the case
of record shareholders who are participants in the dividend reinvestment
plan, within EIGHT BUSINESS days after expiration date, account statements
reflecting a credit of uncertificated shares for their primary and
oversubscription shares unless such shareholders have elected to receive
certificates.
6. (a) All proceeds received by the Agent from Rights holders in respect
of the exercise of rights shall be held by the Agent, on behalf of The
Korean Investment Fund, Inc. in a segregated, interest-bearing escrow
account (the "Escrow Account") pending disbursement in the manner
described in Section 6 (b) below.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of the Rights (including interest earned thereon) to The
Korean Investment Fund, Inc. as promptly as practicable, but in no
event later than fifteen business days after the Confirmation Date.
Proceeds held in respect of Excess Payments (including interest earned
thereon) shall be refunded to Record Date Shareholders entitled to
such a refund within fifteen business days after the Expiration Date.
7. The Agent shall promptly advise The Korean Investment Fund, Inc. as to the
date of delivery of Common Stock hereunder and shall supply The Korean
Investment Fund, Inc. with a certified list of Shareholders as of the
Record Date.
8. The Agent shall account promptly to The Korean Investment Fund, Inc. with
respect to Rights exercised and concurrently account for all monies
received and returned by the Agent with respect to the purchase of shares
of Common Stock upon the exercise of Rights.
9. In the event the Agent does not receive, within five business days after
the Expiration Date, any amount due
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from a Rights Holder as specified in Section 3(e), then it shall take such
action with respect to such Rights Holder's Subscription Rights as may be
instructed in writing by The Korean Investment Fund, Inc. including without
limitation (i) applying any payment actually received by it toward the
purchase of the greatest whole number of shares of Common Stock which could
be acquired with such payment, (ii) allocating the shares subject to such
Subscription Rights to one or more other Record Date Shareholders, and
(iii) selling all or a portion of the shares of Common Stock deliverable
upon exercise of such Subscription Rights on the open market, and applying
the proceeds thereof to the amount owed.
10. No Subscription Certificate shall entitle a Rights Holder to vote or
receive dividends or be deemed the holder of shares of Common Stock for any
purpose, nor shall anything contained in any Subscription Certificate be
construed to confer upon any Right Holder any of the rights of a
shareholder of The Korean Investment Fund, Inc. or any right to vote, give
or withhold consent to any action by The Korean Investment Fund, Inc.
(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 of Common Stock purchasable upon the exercise thereof shall have
become deliverable as provided in this Agreement and in the Prospectus.
11. If any Subscription Certificate is lost, stolen, mutilated, or destroyed
the Agent may, on such terms which will indemnify The Korean Investment
Fund, Inc. as the Agent may in its discretion impose (which shall, in the
case of a Subscription Certificate include the surrender thereof), issue a
new Subscription Certificate of like denomination in substitution for the
Subscription Certificate so lost, stolen or mutilated or destroyed.
12. (a) The Korean Investment Fund, Inc. covenants that all shares of Common
Stock issued on exercise of Rights set forth in the Subscription
Certificates will be validly issued, fully paid, nonassessable and
free of preemptive rights.
(b) The Korean Investment Fund, Inc. shall furnish to the Agent, upon
request, an opinion of counsel satisfactory to the Agent to the effect
that a registration statement under the Securities Act of 1933, as
amended (the "Act"), is then in effect with
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respect to its shares of Common Stock issuable upon exercise of the
Rights set forth in the Subscription Certificates. 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 Korean Investment Fund, Inc. and such
assurances as it may reasonably request that it may comply with such
instruction without violations of the Act.
13. (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 of the parties hereto, provided that
such corporation would be eligible for appointment as a successor
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 by not delivered, any such
successor to the Agent may adopt the countersignature of the original
Agent and deliver such Subscription Certificates so countersigned, and
in case at that time any of the Subscription Certificates shall not
have been countersigned, any successor to the Agent may countersign
such Subscription Certificates either in the name of the predecessor
Agent or in the name of the successor Agent, and in all such cases
such Subscription Certificates shall have the full force provided in
the Subscription Certificates and in this Agreement.
(b) In case 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
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force provided in the Subscription Certificates and in this Agreement.
14. The Korean Investment Fund, Inc. agrees to pay to the Agent from time to
time, on demand of the Agent, reasonable compensation for all services
rendered by it hereunder and also its reasonable expenses and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
15. 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 Korean
Investment Fund, Inc. 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 Korean Investment Fund,
Inc. 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 negligence or
willful misconduct.
(d) Nothing herein shall preclude the Agent from acting in any other
capacity for The Korean Investment Fund, Inc. or for any other legal
entity.
(e) The Agent is hereby authorized and directed to accept instructions
with respect to the performance
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of its duties hereunder form any officer or assistant officer of The
Korean Investment Fund, Inc. and to apply to any such officer of The
Korean Investment Fund, Inc. 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.
(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 Common Stock,
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.
(g) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act
hereunder.
16. 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 Korean Investment Fund, Inc. in
making any changes or corrections in a Subscription Certificate that it
shall have been advised by counsel (who may be counsel for The Korean
Investment Fund, Inc.) 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 Rights
Holders.
17. Assignment
a. Except as provided in Section c below, neither this Agreement nor any
rights or obligations hereunder may be assigned 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.
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c. The Agent may, without further consent on the part of The Korean Investment
Fund, Inc., subcontract for the performance hereof with (i) Boston
Financial Data Services, Inc., a Massachusetts corporation ("BFDS") which
is duly registered as a transfer agent pursuant to Section 17(c)(1) of the
Securities Exchange Act of 1934, or (ii) the current third party vendor
utilized by BFDS; provided, however, that the Agent shall be as fully
responsible to The Korean Investment Fund, Inc. for the acts and omissions
of any subcontractor as it is for its own acts and omissions.
18. All the covenants and provisions of this Agreement by or for the benefit of
The Korean Investment Fund, Inc. or the Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
19. The validity, interpretation and performance of this Agreement shall be
governed by the law of the Commonwealth of Massachusetts.
STATE STREET BANK AND The Korean Investment
TRUST COMPANY Fund, Inc.
By:_______________________________ By:___________________________
Vice President (Officer)
Dated:____________________________ Dated:________________________
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