Exhibit (d)(6)
SUBSCRIPTION AGENT AGREEMENT
This Subscription Agent Agreement (the "Agreement") is made as of January ,
1999 between Prospect Street High Income Portfolio Inc. (the "Fund"), a Maryland
Corporation, and State Street Bank and Trust Company, a Massachusetts Trust
Company, as subscription agent (the "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
("Subscription Certificates") to shareholders of record ("Record Date
Shareholders") of its Common Stock as of a record date specified by the Fund
(the "Record Date"), pursuant to which each Record Date Shareholder will have
certain transferable rights (the "Rights") to subscribe for shares of the Fund's
Common Stock, par value $0.03 (the "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 Fund with the Securities and
Exchange Commission on December 18, 1998, as amended by any amendment filed with
respect thereto (the "Registration Statement"); and
WHEREAS, the Fund wishes the Agent to perform certain acts on behalf of the Fund
and the Agent is willing to so act, in connection with the distribution of the
Subscription Certificates and the issuance and exercise or transfer of the
Rights, 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 the resolutions 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 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 Fund signed by its Senior Vice
President, Treasurer, Secretary or Assistant Secretary, as to the
Record Date, the Agent shall, from a list of Record Date Shareholders
prepare Subscription Certificates in the names of the Record Date
Shareholders, setting forth the number of Rights to subscribe for
shares of Common Stock, calculated on the basis of one right for each
share recorded on the Fund's 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. Upon the written advice, signed
as aforesaid, as to the effective date of the Registration Statement,
the Agent shall as promptly as practicable deliver the Subscription
Certificates, together with a copy of the Prospectus, to all Record
Date Shareholders.
3. (a) Each Subscription Certificate shall be irrevocable and fully
transferable. The Agent shall maintain a register of Subscription
Certificates and the holders of record thereof (each of whom shall be
deemed a "Holder" hereunder for purposes of determining the rights of
holders of Subscription Certificates). Each Subscription Certificate
shall, subject to the provisions thereof, entitle the Holder 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 Rights held: provided, however, that Record Date
Shareholders issued fewer than three Rights are entitled to
purchase one share of Common Stock; and provided further, that no
fractional shares of Common Stock shall be issued; and
(2) With respect to Record Date Shareholders, the right (the
"Oversubscription Right") to purchase from the Fund 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 of
his Basic Subscription Rights as of the Expiration Date, if any,
shall not be entitled to any Oversubscription Rights.
(b) A Holder may exercise his Basic Subscription Rights and, a Record Date
Shareholder may exercise his Oversubscription Rights by delivery to
the Agent at its corporate office located at EquiServe, 000 Xxxxxx
Xxxxxx, Xxxxxx, XX 00000 (the "Corporate Office") specified in the
Prospectus of (i) the Subscription Certificate with respect thereto,
duly executed by such Holder in accordance with and as provided by the
terms and conditions of the Subscription Certificate, together with
(ii) the purchase price of each share of Common Stock subscribed for
by exercise of such Rights as set forth in the Prospectus (the
"Subscription Price"), 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 Fund.
(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 the expiration date (the "Expiration Date")
as specified in the Prospectus. 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.
(d) Notwithstanding 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. New York City 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 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 Common Stock by the
Agent within three business days after the Expiration Date.
(e) Within eight business days following the Expiration Date (the
"Confirmation Date"), the Agent shall send a confirmation to each
Holder (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 Record Date Shareholder pursuant to Section 9,
and (v) any excess to be refunded by the Fund to such Record Date
Shareholder, in each case based on the Subscription Price. Any excess
payment to be refunded by the Fund to a Record Date Shareholder, shall
be mailed by the Agent to the Record Date Shareholder as promptly as
possible after the Expiration Date, as provided in Section 7 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
"Excess Shares") to Record Date Shareholders exercising Oversubscription
Rights, in the amounts of such oversubscriptions. If there are
insufficient shares of Common Stock to fill such oversubscriptions, the
Excess Shares will be allocated pro rata among Record Date Shareholders
being prorated, based on the number of shares of Common Stock such Record
Date Shareholders subscribed for in the Primary Subscription relative to
the aggregate number of shares of Common Stock subscribed for in the
Primary Subscription by all such Record Date Shareholders then being
prorated. The Agent shall advise the Fund immediately upon the completion
of the allocation set forth above as to the total number of shares
subscribed and distributable.
5. The Rights are transferable until the Expiration Date, and the Rights and
the shares of Common Stock will be listed for trading on the New York
Stock Exchange. Reference is made to the Prospectus for a complete
description of the sale of the Rights.
6. (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 shares 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 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, as soon as possible after
the Expiration Date, a 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"); (iv) in the case of Record Date Shareholders who are
participants in the dividend reinvestment and cash purchase plan, as soon
as possible after the Expiration Date, account statements reflecting a
credit of uncertificated shares pursuant to their exercise of Basic
Subscription Rights and Oversubscription Rights unless such Record Date
Shareholders have elected to receive certificates.
7. (a) All proceeds received by the Agent from Holders in respect of the
exercise of rights shall be held by the Agent, on behalf of the Fund
in a segregated, interest-bearing account (the "Account") (the
interest of which shall be paid to the Fund) pending disbursement in
the manner described in Section 7(b) below.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of the Rights (including interest earned thereon) to the Fund
as promptly as practicable, after the Expiration Date. Proceeds held
in respect of Excess Payments shall be refunded to Record Date
Shareholders entitled to such a refund as promptly as possible after
the Expiration Date.
8. The Agent shall promptly advise the Fund as to the date of delivery of
Common Stock hereunder and shall supply the Fund with a certified list of
Record Date Shareholders.
9. 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 of Common Stock upon the
exercise of Rights.
10. In the event the Agent does not receive, within three business days after
the Expiration Date, any amount due from a Holder, as specified in Section
3(e), then it shall take such action with respect to such Holder's Basic
Subscription Rights or Oversubscription 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 of Common Stock which could be acquired with such payment and,
(ii) allocating the shares subject to such Basic Subscription Rights or
Oversubscription Rights to one or more other Record Date Shareholders.
11. No Subscription Certificate shall entitle a 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 Holder 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 of Common Stock
purchasable upon the exercise thereof shall have become deliverable as
provided in this Agreement and in the Prospectus.
12. If any Subscription Certificate is lost, stolen, mutilated, or destroyed
the Agent may, on such terms which will indemnify the Fund 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.
13. (a) The Fund 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 Fund shall furnish to the Agent written notice to the effect that
a registration statement under the Securities Act of 1933, as amended
(the "Act"), is then in effect with 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 Fund and such assurances as it may reasonably request that it
may comply with such instruction without violations of the Act.
14. 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 but 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 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.
15. The Fund agrees to pay to the Agent such reasonable compensation for all
services rendered by it hereunder as set forth in Schedule A hereto.
16. 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. The Fund shall not be liable
for indemnification under this Section 14 unless the Agent shall have
notified the Fund in writing of the commencement of any litigation or
proceeding in respect of which indemnity may be sought under this
Section 14. With respect to claims in such litigation or proceedings
for which indemnity may be sought, the Fund shall be entitled to
participate in any such litigation or proceeding and the Fund shall be
entitled to assume the defense of such litigation or proceeding with
counsel of its own expense in respect of that portion of the
litigation for which the Fund may be subject to an indemnification
obligation. If the Fund is not permitted to participate or control
such litigation or proceeding under applicable law or by a ruling of a
court of competent jurisdiction or otherwise, the Agent shall
reasonably prosecute such litigation or proceeding. In no event shall
the Agent consent to the entry of any judgment or enter into any
settlement in any such litigation or proceeding (including any
threatened litigation or proceeding) without providing the Fund with
adequate notice of any such settlement or judgment, and without the
Fund's prior written consent. The Agent shall submit written evidence
to the Fund with respect to any cost or expense for which the Agent is
seeking indemnification in any such form and detail as the Fund may
reasonably request.
(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 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 of the Fund for advice or instructions in connection with its
duties, and subject to the other requirements set forth above, shall
be indemnified and not be liable for any action taken or suffered by
it in good faith, without negligence or willful misconduct, 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 reasonable
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 reasonable act or failure to
act hereunder.
17. The Agent may, without the consent or concurrence of the Holders 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 except
insofar as any such change may confer additional rights upon the Holders.
18. a. Except as provided in subsection (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.
c. The Agent may, without further consent on the part of the Fund
subcontract for the performance hereof with (i) EquiServe Limited
Partnership, a Delaware Limited Partnership, which is duly registered
as a transfer agent pursuant to Section 17(c)(2) of the Securities
Exchange Act of 1934, or (ii) the current third party vendor utilized
by EquiServe; provided, however, that the Agent shall be as fully
responsible to the Fund for the acts and omissions of any subcontractor
as it is for its own acts and omissions.
19. 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.
20. The validity, interpretation and performance of this Agreement shall be
governed by the laws of the State of New York without regard to the
principles of conflicts of law.
STATE STREET BANK AND TRUST PROSPECT STREET HIGH INCOME
COMPANY PORTFOLIO INC.
By: By:
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Name: Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Secretary
Schedule A
BANKBOSTON N.A.
FEE SCHEDULE
to serve
PROSPECT STREET High Income Portfolio, Inc.
as
Subscription Agent
This Fee Schedule sets forth the fees for the services to be performed under the
Exchange Agent Agreement between BankBoston N.A. and Prospect Street High Income
Portfolio, Inc. dated _________.
A. FEES FOR SERVICES
For the services set forth in the Exchange Agency Agreement dated _______.
Prospect Street High Income Portfolio, Inc. will be charged as follows:
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$10,000.000 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
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Excludes out-of-pocket expenses as described in Section B, "Items Not Covered"
B. ITEMS NOT COVERED
o Services not specified in the Exchange Agency Agreement dated ______,
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)
o 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)
o Reasonable legal review fees if referred to outside counsel; provided
that BankBoston N.A. shall notify Prospect Street High Income Portfolio,
Inc. in writing of its intention to use outside counsel
o Overtime charges assessed in the event of late delivery of material for
mailings unless the target mail date is rescheduled
C. LIMITATIONS
o Schedule based upon document review and information known at this time
about the transaction
o Significant changes made in the terms or requirements of this
transaction could require modifications to this Schedule
o Schedule based upon approximately 2,750 shareholders of record.
o 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.
XXXXX XXXXXX XXXX XXX XXXXXXXX XXXXXX High Income
TRUST COMPANY Portfolio, Inc.
By: /s/ Xxxx X. Xxxxx By:
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Xxxx X. Xxxxx
Title: Vice President Title:
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Date: 1/19/99 Date:
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