(Subscription Agent)
SUBSCRIPTION AGENT AGREEMENT
This Subscription Agent Agreement (the "Agreement") is made as of
September 8, 2003 between 1838 Bond-Debenture Trading Fund (the "Company") and
EquiServe Trust Company, 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 Nos. 333-108539,
811-02201) filed by the Company with the Securities and Exchange Commission on
September 5. 2003, as amended by any amendment tiled with respect thereto (the
"Registration Statement").
WHEREAS, the Company proposes to make a 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 Common Stock, par value $0.00l per share ("Common
Stock"), 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 shares of Common Stock, 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.
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
non-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 [only if
non-transferable]:
(1) With respect to Record Date Shareholders only, the right
to acquire during the Subscription Period, as defined in the Prospectus, at the
Subscription Price, as defined in the Prospectus, a number of shares of Common
Stock equal to one share of Common Stock for every one Right (the "Primary
Subscription Right"); and
(2) With respect to Record Date Shareholders only, the right
to subscribe for additional shares of Common Stock, subject to the availability
of such shares and to the allotment of such shares as may be available among
Record Date Shareholders who exercise Over-Subscription Rights on the basis
specified in the Prospectus; provided, however, that such Record Date
Shareholder has exercised all Primary Subscription Rights issued to him or her
(the "Over-Subscription Privilege").
3. Rights and Issuance of Subscription Certificates.
(a) Each Subscription Certificate shall evidence the Rights of the
Shareholder therein named to purchase Common Stock 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 three shares of Common Stock 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 [or pursuant to other
formula - Company should provide this information], 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 FF0 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) Record Date Shareholders may acquire shares of Common Stock on
Primary Subscription and 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 estimated purchase price, as disclosed in the Prospectus,
for each share of Common Stock 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 of Common
Stock subscribed for on Primary Subscription and any additional shares of Common
Stock 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 Common Stock by the Agent within three
Business Days (as defined below) after the Expiration Date (the "Protect
Period") and full payment for their Common Stock within ten Business Days after
the Confirmation Date (as defined in Section 4(d)). For the purposes of the
Prospectus and this Agreement, "Business Day' shall mean any day on which
trading is conducted on the New York Stock Exchange.
(d) The Company will determine the Subscription Price by taking
____% of the average of the last reported sale prices of shares of Common Stock
on the New York Stock Exchange on the _____ Business Day following the
Expiration Date (the "Pricing Date") and the _____ Business Day. As soon as
practicable after the Pricing Date (the "Confirm Date") the Agent shall send to
each exercising 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) a confirmation showing the number of shares of
Common Stock 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 in the form of a
check and stub, along with a letter explaining the allocation of shares of
Common Stock pursuant to the Over-Subscription Privilege.
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(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 he 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 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. 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.
6. Over-Subscription. If, after allocation of shares of Common Stock to
Record Date Shareholders, there remain unexercised Rights, then the Agent shall
allot the shares issuable upon exercise of such unexercised Rights (the
"Remaining Shares") to shareholders who have exercised all the Rights initially
issued to them and who wish to acquire more than the number of shares for which
the Rights issued to them are exercisable. Shares subscribed for pursuant to the
Over-Subscription Privilege will be allocated in the amounts of such
over-subscriptions. If the number of shares for which the Over-Subscription
Privilege has been exercised is greater than the Remaining Shares, the Agent
shall allocate the Remaining Shares to Record Date Shareholders exercising
Over-Subscription Privilege based on the number of shares of Common Stock owned
by them on the Record Date. Any remaining shares to be issued shall be allocated
to 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 of Common
Stock. The Agent shall advise the Company immediately upon the completion of the
allocation set forth above as to the total number of shares subscribed and
distributable.
7. Delivery of Certificates. The Agent will deliver (i) certificates
representing those shares of Common Stock 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.
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8. 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.
9. Reports.
(a) Daily, during the period commencing on _________,until
termination of the Subscription Period, the Agent will report by telephone or
telecopier, confirmed by letter, to an Officer of the Company, data regarding
Rights exercised, the total number of shares of Common Stock subscribed for, and
payments received therefor, bringing forward the figures from the previous day's
report in each ease so as to show the cumulative totals and any such other
information as may be mutually determined by the Company and the Agent.
10. Loss or Mutilation. If any 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.
11. Compensation for Services. The Company agrees to pay to the Agent
compensation for its services as such iii accordance with its Fee Schedule to
act as Agent, dated September 8, 2003 and attached hereto as Exhibit A. The
Company further agrees that it will reimburse the Agent for its reasonable
out-of-pocket expenses incurred in the performance of its duties as such.
12. Instructions and Indemnification. The Agent undertakes the duties
and 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.
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(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 gross negligence, bad faith or willful misconduct of the
Agent or such nominees.
13. Limitation of Liability. The Agent shall be responsible for and
shall indemnify and hold the Company harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to Agent's refusal or failure to comply with the
terms of this Agreement, or which arise out of Agent's negligence or willful
misconduct or which arise out of the breach of any representation or warranty of
Agent hereunder, for which Agent is not entitled to indemnification under this
Agreement; provided, however, that Agent's aggregate liability during any term
of this Agreement with respect to, arising from, or arising in connection with
this Agreement, or from all services provided or omitted to be provided under
this Agreement, whether in contract, or in tort, or otherwise, is limited to,
and shall not exceed, the amounts paid hereunder by the Company to Agent as fees
and charges, but not including reimbursable expenses, during the six (6)
calendar months immediately preceding the event for which recovery from the
Agent is being sought.
14. Post-Merger Cleanup.
(a) The Company agrees that any post-merger active solicitation
program will be coordinated exclusively through the Exchange Agent, using a
vendor that the Exchange Agent has previously approved.
(b) Post-merger active solicitation programs are typically performed
at no additional cost to the Company. If the Exchange Agent determines that fees
and/or expenses are appropriate based on the particular program for the Company,
such fees and/or expenses must be mutually agreed upon in writing between the
parties before implementation of such program.
15. Changes in Subscription Certificate. The Agent may, without the
consent or concurrence of the Shareholders in whose names Subscription
Certificates arc 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.
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16. Assignment, Delegation.
(a) Except as provided in Section 14(c) below, 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 EquiServe Limited
Partnership or (ii) subcontract with other subcontractors for systems,
processing. telephone and mailing services, and post-merger clean up activities,
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.
17. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the law of the Commonwealth of Massachusetts.
18. 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.
19. 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.
20. 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, penal, 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.
21. 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.
22. 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.
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23. 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.
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 30 days' written
notice has been provided by either party to the other. [If not transfer agent
for the Company add: Upon termination of this Agreement, all canceled
Certificates and related documentation will be returned to the Company or agent
designated by the Company.] [If transfer agent add: Upon termination of the
Agreement, the Exchange Agent shall retain all canceled Certificates and related
documentation as required by applicable law.]
26. Notices. Until further notice in writing by either party hereto to
the other party, all written reports, notices and other communications between
the Exchange Agent and the Company required or permitted hereunder shall be
delivered or mailed by first class mail, postage prepaid, addressed as follows:
If to the Company, to:
Xxx. Xxxx X. Xxxxxxxxxx
Vice President/Secretary
1838 Bond-Debenture Trading Fund
0000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxx xxxxx
Xxxx xx Xxxxxxx, XX 00000
If to the Exchange Agent, to:
EquiServe Trust Company, N.A.
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Reorganization Department
27. Survey. The provisions of Paragraphs 12, 17, 19 -- 21, 24, 26 --28
shall survive any termination, for any reason of this agreement.
28. 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.
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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.
EQUISERVE TRUST COMPANY, NA. COMPANY
/s/ W. Xxxx Xxxxxx /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------- -------------------------------
Signature Signature
Vice President Vice President/Secretary
--------------------------------------- -------------------------------
Title Title
9/8/2003 9/8/2003
--------------------------------------- -------------------------------
Date Date
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EQUISERVE TRUST COMPANY, N.A.
PROPOSAL
IN SERVE AS
SUBSCRIPTION AGENT FOR
THE 1838 BOND-DEBENTURE TRADING FUND
(REVISED AS OF AUGUST 15, 2003)
A. FEES FOR SERVICES *
$ 4,000.00 Project Management Fee
$ 1.00 Per subscription form issued
$ 8.00 Per subscription form processed (registered and beneficial)
$ 6.00 Per defective subscription form received
$ 15.00 Per notice of guaranteed delivery received
$ 2.00 Per broker split certificate issued (if applicable)
$ 3.00 Per sale of right (if applicable)
$ 3.00 Per invoice mailed (if applicable)
$ 1.00 Per refund check issued and mailed (if applicable)
$ 5.00 Per solicitation cheek processed and mailed (if applicable)
$ 15.00 Per withdrawal of subscription certificate (if applicable)
$ 1,000.00 New York window fee for Midnight expiration (if applicable)
$ 2,500.00 Per Pro-ration (for entire file if applicable)
$ 3,000.00 Per offer extension (if applicable)
$ 5,000,00 Minimum charge should the project be canceled for any reason
prior to the mailing of the subscription form.
*Excludes out-of-pocket expenses as described in Section C, "Items Not Covered"
B. SERVICES COVERED
o Designating an operational team to carry out Subscription Agent
duties, including document review and execution of Legal
agreement, review of subscription form and communication
materials, project management, and ongoing project updates and
reporting
o Calculating Rights to be distributed to each shareholder and
printing shareholder information on the subscription form
o Issuing and mailing subscription forms to registered shareholders
o Tracking and reporting the number of exercises made, as required
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o Processing Rights received and exercised
o Deposit participant checks daily and forward all participant funds
to 1838 Bond-Debenture Trading Fund at the end of the offering
period
o Providing receipt summation of checks received
o Affixing legends to appropriate stock certificates, where
applicable
o Issuing and mailing stock certificates and/or checks
o Interfacing with the Information Agent
o Calculating, issuing and mailing of proration and/or
over-subscription checks if applicable
o Calculating, issuing and mailing of solicitation checks if
applicable
C. ITEMS NOT COVERED
o Items not specified in the "Services Covered" section set forth in
this Agreement, including any services associated with new duties,
legislation or regulatory fiat which become effective after the
date of this 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
o Overtime charges assessed in the event of late delivery of
material for mailings unless the target mail date is rescheduled
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D. ASSUMPTIONS
o Proposal 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 proposal
o Proposal must be executed prior to the initial mailing
o Company responsible for punting of materials (Rights Card,
Prospectus and ancillary documents)
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
o No Interest shall accrue to the company or the shareholders
E. PAYMENT FOR SERVICES
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 expense must be
received one (1) business day prior to the scheduled mailing date.
EquiServe Trust Company, N.A. The 1838 Bond-Debenture Trading Fund, Inc.
By: /s/ W. Xxxx Xxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------- ----------------------------------------
W. Xxxx Xxxxxx
Title: Vice President Title: Vice President/Secretary
Date: 9/8/03 Date: 9/8/03
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