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Exhibit (k)(2)
SUBSCRIPTION AGENT AGREEMENT (Company)
This Subscription Agent Agreement (the "Agreement") is made as of
__________________, 1999 between Xxxxxx High Income Trust (the "Company") and
BankBoston, N.A. 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. 811-5482) filed by
the Company with the Securities and Exchange Commission on February 12, 1999, 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 "Subscription Certificates") to shareholders of record (the
"Shareholders") of its Shares of Beneficial Interest, par value $0.01 per share
("Shares"), as of a record date specified by the Company (the "Record Date"),
pursuant to which each Shareholder will have certain rights (the "Rights") to
subscribe for the 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 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. Appointment. The Company hereby appoints the Agent to act as subscription
agent in connection with the distribution of Subscription Certificates 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 Subscription Certificates.
(a) Each Subscription Certificate shall be irrevocable and fully
transferable. The Agent shall, in its capacity as Transfer Agent of the Company,
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 to acquire during the Subscription Period, as
defined in the Prospectus, at the Subscription Price, as defined in the
Prospectus, a number of Shares equal to one Share for every three Rights (the
"Primary Subscription Right"); provided, however, any
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Shareholder who is issued fewer than three Rights may subscribe, at the
Subscription Price, for one full share; and
(2) The right to subscribe for additional Shares, subject to
the availability of such Shares and to the 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 such Shareholder has
exercised all Primary Subscription Rights issued to him or her (the
"Over-Subscription Privilege").
3. Rights and Issuance of Subscription Certificates.
(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 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 Subscription
Certificates in the names of the Shareholders, setting forth the number of
Rights to subscribe for the Company's Common Stock calculated on the basis of
one Right for each full 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 Subscription
Certificate 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
Subscription Certificates, 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
Subscription Certificate 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 Subscription Certificates 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 Subscription Certificates 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.
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4. Exercise.
(a) Exercising Rights Holders may acquire Shares on Primary
Subscription and Record Date Shareholders may acquire Shares pursuant to the
Over-Subscription Privilege by delivery to the Agent as 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 purchase
price as disclosed in the Prospectus for each 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 Subscription Certificates 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 Subscription Certificate 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 Shares subscribed for on Primary
Subscription and any additional Shares subscribed for pursuant to the
Over-Subscription Privilege, and (ii) a properly completed and executed
Subscription Certificate, then such exercise of Primary Subscription Rights and
Over-Subscription Rights shall be regarded as timely, subject, however, to
receipt of the duly executed Subscription Certificate and full payment for the
Shares by the Agent within three Business Days (as defined below) after the
Expiration Date (the "Protect Period") and full payment for their 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) After five Business Days following the Expiration Date (the
"Confirm Date") the Agent shall send to each exercising shareholder (or, if
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 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 Company by such
shareholder or any excess to be refunded by the Company to such shareholder,
along with a letter explaining the allocation of 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 Company to a shareholder 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
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amounts due in accordance with Section 4(d), the Agent will consult with the
Company 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. Transfer of Rights.
(a) Record Date Shareholders who do not wish to exercise any or all of
their Rights may instruct the Agent to sell any unexercised Rights through the
Dealer Manager (PaineWebber Incorporated) by delivering to the Agent
Subscription Certificates representing the Rights to be sold with the
appropriate instructions to sell the Rights on or prior to __________, 1999.
Upon timely receipt by the Agent of appropriate instructions to sell Rights, the
Agent shall request the Dealer Manager to use its best efforts to complete the
sale. Upon timely receipt of the proceeds of the sale, net of commissions, from
the Dealer Manager, the Agent will remit the proceeds of the sale to the Record
Date Shareholders. The Agent will also request the Dealer Manager to use its
best efforts to sell all Rights which remain unclaimed as a result of
Subscription Certificates being returned by the postal authorities to the Agent
as undeliverable as of the fourth business day prior to the Expiration Date.
Upon timely receipt of the proceeds of the sale, net of commissions, from the
Dealer Manager, the Agent will hold the proceeds from those sales for the
benefit of such nonclaiming Record Date Shareholders until such proceeds are
either claimed or escheat.
(b) Record Date Shareholders may transfer a portion of the Rights
evidenced by a single Subscription Certificate (but not fractional Rights) by
delivering to the Agent within at least three business days prior to the
Expiration Date a Subscription Certificate properly endorsed for transfer, with
instructions to register such portion of the Rights evidenced thereby in the
name of the transferee and to issue a new Subscription Certificate to the
transferee evidencing such transferred Rights. In such event, the Agent shall
issue a new Subscription Certificate evidencing the balance of the Rights to the
Record Date Shareholder or, if the Record Date Shareholder so instructed, to an
additional transferee.
6. Validity of Subscriptions. Irregular subscriptions not otherwise 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.
7. Over-Subscription. If, after allocation of the Shares to persons excercising
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 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 Shares owned by them on the
Record Date. Any remaining Shares to be issued shall be allocated to
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holders of Rights acquired in the secondary market based on the number of Rights
exercised by such holders of Rights. The percentage of Remaining Shares each
over-subscribing Record Date Shareholder or other Rights holder may acquire will
be rounded up or down to result in delivery of whole 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.
8. Delivery of Certificates. The Agent will deliver (i) certificates
representing those Shares purchased pursuant to exercise of Primary 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 and
(ii) certificates representing those Shares purchased pursuant to the exercise
of the Over-Subscription Privilege as soon as practicable after the Expiration
Date and after all allocations have been effected.
9. Holding Proceeds of Rights Offering
(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 segregated account (the "Account"). No interest shall accrue to the Company or
shareholders on funds held in the Account pending disbursement in the manner
described in Section 4(e) above.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of Rights to the Company as promptly as practicable, but in no event
later than ten business days after the Confirmation Date. Proceeds held in
respect of Excess Payments shall belong to the Company.
10. Reports.
(a) Daily, during 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
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.
11. Loss or Mutilation. If any Subscription Certificate is lost, stolen,
mutilated or 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 Subscription Certificate include the
surrender and cancellation thereof), issue a new Subscription Certificate of
like denomination in substitution for the Subscription Certificate so lost,
stolen, mutilated or destroyed.
12. Compensation for Services. The Company agrees to pay to the Agent
compensation for its services as such in accordance with its Fee Schedule to act
as Agent, dated March 15, 1999 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.
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13. Instructions and Indemnification. The Agent undertakes the duties and
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.
14. Changes in Subscription Certificate. 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 Company in
making any changes or corrections in a Subscription Certificate 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 Subscription
Certificate except insofar as any such change may confer additional rights upon
the Shareholders.
15. Assignment, Delegation.
(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.
(c) The Agent may, without further consent on the part of the Company,
(i) subcontract for the performance hereof with Boston EquiServe Limited
Partnership or (ii) subcontract with other subcontractors for systems,
processing, and telephone and mailing services as may be required from time to
time; provided, however, that the Agent shall be as fully responsible to the
Company for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
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16. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the law of the Commonwealth of Massachusetts.
17. Third Party Beneficiaries. This Agreement does not constitute an agreement
for a partnership or joint venture between the Agent and the Company. Neither
party shall make any commitments with third parties that are binding on the
other party without the other party's prior written consent.
18. Force Majeure. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other cause reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes. Performance under this Agreement shall resume when
the affected party or parties are able to perform substantially that party's
duties.
19. Consequential Damages. Neither party to this Agreement shall be liable to
the other party for any consequential, indirect, special or incidental damages
under any provisions of this Agreement or for any consequential, indirect,
special or incidental damages arising out of any act or failure to act
hereunder even if that party has been advised of or has foreseen the possibility
of such damages.
20. Severability. If any provision of this Agreement shall be held invalid,
unlawful, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired.
21. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall be
considered one and the same agreement.
22. Captions. The captions and descriptive headings herein are for the
convenience of the parties only. They do not in any way modify, amplify, alter
or give full notice of the provisions hereof.
23. Facsimile Signatures. Any facsimile signature of any party hereto shall
constitute a legal, valid and binding execution hereof by such party.
24. Confidentiality. The Agent and the Company agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement including the fees for services set forth in the attached schedule
shall remain confidential, and shall not be voluntarily disclosed to any other
person, except as may be required by law.
25. Term. This Agreement shall remain in effect until terminated on ___________,
199_ (the "Termination Date") or, prior to the Termination Date, upon 30 days'
written notice by either party to the other. Upon termination of this Agreement,
all canceled
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Certificates and related documentation will be returned to the Company or agent
designated by the Company.
26. Merger of Agreement. This Agreement constitutes the entire agreement between
the parties hereto and supercedes any prior agreement with respect to the
subject matter hereof whether oral or written.
27. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Xxxxxx High Income
Trust" refers to the Trustees under the Declaration collectively as Trustees and
not as individuals or personally, and that no Shareholder of the Fund, or
Trustee, officer, employee or agent of the Fund, shall be subject to claims
against or obligations of the Fund to any extent whatsoever, but that the Fund
estate only shall be liable. The Agent is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration and agrees that the
obligations assumed by the Fund pursuant to this Agreement shall be limited in
all cases to the Fund and its assets, and the Agent shall not seek satisfaction
of any such obligation from the Shareholders or any Shareholder of the Fund, or
from any Trustee, officer, employee or agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the day and year first above written.
BANKBOSTON, N.A. COMPANY
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Signature Signature
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Title Title
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BANKBOSTON N.A.
FEE SCHEDULE
TO SERVE
XXXXXX HIGH INCOME TRUST
AS
SUBSCRIPTION AGENT
This Fee Schedule sets forth the fees for the services to be performed under the
Subscription Agent Agreement between BankBoston N.A. and Xxxxxx High Income
Trust dated March 15, 1999.
A. FEES FOR SERVICES
For the services set forth in the Subscription Agent Agreement dated
March 15, 1999, Xxxxxx High Income Trust will be charged as follows:
$ 10,000.00 Project Management Fee*
$ 2.00 Per subscription form issued and mailed
$ 9.00 Per subscription processed registered and beneficial
$ 12.50 Per defective subscription form received and processed
$ 15.00 Per Notice of Guaranteed Delivery received
$ 1.75 Per refund check issued and mailed
$ 4.50 Per invoice mailed
$ 2.25 Subsequent cash management
$ 2.75 Per sale of right
$ 2.00 Per broker split certificate issued
$ 15.00 Per withdrawal of subscription certificate, if applicable
$ 1,000.00 New York window fee upon expiration
$ 3,000.00 Per offer extension
*EXCLUDES OUT-OF-POCKET EXPENSES AS DESCRIBED IN SECTION B, "ITEMS NOT COVERED"
B. ITEMS NOT COVERED
- Services not specified in the Subscription Agent Agreement dated
March 15, 1999, including any services associated with new
duties, legislation or regulatory fiat which become effective
after the date of the Exchange Agency Agreement (these will be
provided on an appraisal basis)
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- All out-of-pocket expenses such as telephone line charges,
overprinting, certificates, checks, postage, stationery, wire
transfers, and excess material disposal (these will be billed as
incurred)
- Reasonable legal review fees if referred to outside counsel;
provided that BankBoston N.A. shall notify Xxxxxx High Income
Trust in writing of its intention to use outside counsel
- Overtime charges assessed in the event of late delivery of
material for mailings unless the target mail date is rescheduled
C. LIMITATIONS
- Schedule based upon document review and information known at
this time about the transaction
- Significant changes made in the terms or requirements of this
transaction could require modifications to this Schedule
- Schedule based upon approximately 4,500 shareholders of record
- Material to be mailed to shareholders must be received no less
than five (5) business days prior to the start of the mailing
project
D. PAYMENT FOR SERVICES
It is agreed that an invoice for the Project Management Fee will be
rendered and payable on the effective date of the transaction. An
invoice for any out-of-pockets and per item fees realized will be
rendered and payable on a monthly basis, except for postage expenses in
excess of $5,000. Funds for such mailing expenses must be received one
(1) business day prior to the scheduled mailing date.
In witness whereof, the parties hereto have caused this Fee Schedule to
be executed by their respective officers, hereunto duly agreed and
authorized, as of the effective date of this Fee Schedule.
BANKBOSTON X.X. XXXXXX HIGH INCOME TRUST
By: ______________________________ By: ____________________________
Xxxx X. Xxxxx
Title: ___________________________ Title: _________________________
Vice President
Date: ____________________________ Date: __________________________
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