Exhibit K14
NEW AMERICA HIGH INCOME FUND, INC.
SUBSCRIPTION RIGHTS AGENCY AGREEMENT
This Subscription Rights Agency Agreement (the "Agreement") is made as of
this ____ day of January, 1998, by and between New America High Income Fund, a
Maryland Corporation (the "Fund"); and State Street Bank and Trust Company, a
national banking association, as subscription and distribution agent ("Agent").
WHEREAS, the Fund proposes to make a subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Fund (the "Subscription Certificates") to shareholders of record (the
"Shareholders") of its Common Stock, par value $.01 per share (the "Common
Stock"), as of a record date specified by the Fund (the "Record Date"), pursuant
to which each Shareholder will have certain rights (the "Rights") to subscribe
for shares of Common Stock, as described in and upon such terms as are set forth
in the final prospectus (the "Prospectus") included in the Form N-2 Registration
Statement originally filed by the Fund with the Securities and Exchange
Commission on December 24, 1997, as amended (as amended, the "Registration
Statement"), in accordance with the applicable requirements of the Securities
Act of 1933, as amended (the "Act") and the Investment Company Act of 1940, as
amended;
WHEREAS, the Fund wishes the Agent to perform certain acts on its behalf
and the Agent is willing to so act, in connection with the distribution of the
Subscription Certificates and the issuance and exercise of the Rights to
subscribe therein set forth, all upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements set forth herein, the parties agree as follows:
1. Pursuant to resolution of its Board of Directors, the Fund hereby
appoints and authorizes the Agent to act on its behalf in accordance with the
provisions hereof, and the Agent hereby accepts such appointment and agrees to
so act.
2. 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 Fund signed by its Chairman, President,
Secretary or Assistant Secretary, as to the Record Date, the agent shall, from a
list of Shareholders as of the Record Date to be prepared by the Agent in its
capacity as Transfer Agent of the Fund, prepare and record Subscription
Certificates in the names of the Shareholders, setting forth the number of
Rights to subscribe to Common Stock calculated on the basis of one Right for
each share of Common Stock recorded on the books of the Fund in the name of each
such Shareholder as of the Record Date.
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(c) Each Subscription Certificate shall be dated as of the Record Date and
shall be executed manually or by facsimiles signatures of a duly authorized
Officer of the Fund. Upon the written advice, signed as aforesaid, as to the
effective date of the Registration Statement, the Agent shall be as promptly as
practicable countersign and deliver the Subscription Certificates, together with
a copy of the Prospectus, as instructed by the Fund. No Subscription Certificate
shall be valid for any purposes unless so executed. Should any Officer whose
signature has been placed upon a 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. Rights and Issuance of Subscription Certificates.
(a) Each Subscription Certificate shall be transferable and shall, unless
exercised by the holder thereof in the manner set forth in the Prospectus expire
upon the expiration of the offer. The Agent shall, in its capacity as transfer
agent for the Fund, maintain a register of Subscription Certificates and the
holders of record thereof (each of whom shall be deemed a "Rightholder"
hereunder for purposes of determining the rights of holders of Subscription
Certificates). Each Subscription Certificate shall, subject to the provisions
thereof, entitle the Rightholder 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 one
Right; provided, however, that no fractional shares of Common Stock shall
be issued; and
(2) The right (the "Oversubscription Right") to purchase additional
shares of Common Stock, subject to the availability of such shares and to
allotment of such shares as may be available among Rightholders who
exercise Oversubscription Rights on the basis specified in the Prospectus;
provided, however, that a Rightholder who has not exercised his Basic
Subscription Right with respect to the full number of shares that such
Rightholder is entitled to purchase by virtue of his Basic Subscription
Right as of the Expiration Date, if any, shall not be entitled to any
Oversubscription Right.
(b) A Rightholder may exercise his Basic Subscription Right and
Oversubscription Right by delivery to the Agent at its corporate office
specified in the Prospectus of (i) the Subscription Certificate with respect
thereto, duly executed by such Rightholder in accordance with and as provided by
the terms and conditions of the Subscription Certificate, together with (ii) the
estimated subscription price for each share of Common Stock subscribed for by
exercise of such Rights, in United States dollars by money order or check drawn
on a bank located in the U.S. and in each case payable to the order of "The New
America High Income 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 Time on such date as the Fund shall designate to the Agent in writing
(the "Expiration Date"). For the purpose of determining the time of the exercise
of any Rights, delivery of any material to the Agent shall
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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) above
regarding delivery of an executed Subscription Certificate to the Agent prior to
5:00 P.M. New York City Time on the Expiration Date, if prior to such time the
Agent receives a properly completed and executed notice of guaranteed delivery
in the form accompanying the Prospectus by facsimile (telecopier) or otherwise
from a financial institution that is a member of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the New York Stock
Exchange Medallion Signature Program, guaranteeing delivery of (i) payment of
the full subscription price for shares purchased and subscribed for by virtue of
a Subscription Certificate, 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 by the Agent within three
business days after the Expiration Date and receipt of full payment within ten
business days after the Confirmation Date (as defined below).
(e) On a date (the "Confirmation Date") that is no later than four business
days after the Expiration Date, the Agent shall send a confirmation to each
Rightholder (or, for shares of Common Stock on the Record Date 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 (the "Subscription Price") and
total purchase price for the shares, and (iv) any additional amount payable by
the Rightholder to the Fund or any excess to be refunded by the Fund to the
Rightholder, in each case, based on the Subscription Price. Any additional
payment required from a Rightholder must be received by the Agent within ten
business days after the Confirmation Date. Any excess payment to be refunded by
the Fund to a Rightholder shall be mailed by the Agent to the Rightholder as
provided in Section 6 below.
4. If, after allocation of shares of Common Capital 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 sufficient Remaining Shares are not
available to honor all oversubscriptions, the available shares will be allocated
first among persons exercising Oversubscription Rights who subscribe for an
aggregate of 1,000 or fewer shares (inclusive of shares subscribed for by such
persons exercising Oversubscription Rights in the Primary Subscription). Shares
remaining thereafter will be allocated among those who oversubscribe based on
the number of Rights originally exercised by them in the Primary Subscription.
The percentage of Remaining Shares each person exercising Oversubscription
Rights may acquire may be rounded up or down to result in delivery of whole
Shares. The allocation process may involve a series of allocations in order to
assure that the total number of shares available for oversubscriptions is
distributed on a pro rata basis.
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5. All proceeds from the exercise of Rights shall be held by the Agent in a
segregated, interest-bearing account in the name of the Fund. The Agent shall
advise the Fund immediately upon the completion of the allocation set forth
above as to the total number of shares subscribed and distributable.
6. (a) The Agent shall mail to the Rightholders as promptly as practicable
after the Confirmation Date and after full payment for the shares subscribed for
has cleared: (i) certificates representing those shares purchased pursuant to
exercise of Basic Subscription Rights and those shares purchased pursuant to the
exercise of Oversubscription Rights; and (ii) in the case of each Rightholder
who subscribed and paid for shares at an estimated Subscription Price greater
than the actual Subscription Price, a refund in the amount of the difference
between the estimated Subscription Price and the actual Subscription Price.
(b) The Agent shall deliver the proceeds of the exercise of Rights to the
Fund as promptly as practicable, but in no event later than 20 business days
after the Confirmation Date.
7. (a) 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.
(b) The Agent will advise the Fund from day to day during the period of,
and promptly after the termination of, the Offer as to all the names and
addresses of Rightholders exercising Rights, the total number of Rights,
exercised by each Rightholder during the immediately preceding day (indicating
the total number of Rights verified to be proper form for exercise, rejected for
exercise and being processed) and the number of Rights exercised on Subscription
Certificates indicating a soliciting broker as the broker-dealer with respect to
such exercise and such other information as the Fund may reasonably request.
(c) The Agent shall notify the Fund no later than 5:00 p.m., Eastern Time,
on the first business day following the Expiration Date, of the number of Rights
exercised, the total number of Rights verified to be in proper form for
exercise, rejected for exercised and being processed, and the number of Rights
exercised on Subscription Certificates indicating a soliciting broker as the
broker-dealer with respect to such exercise and such other information as the
Fund or the Dealer Manager may reasonably request.
(d) Upon request of the Fund after the Confirmation Date, the Agent shall
notify the Fund of any Right with respect of which the full amount due upon the
exercise thereof has not been received and the soliciting broker, if any,
specified as the broker-dealer with respect to such right.
8. In the event the Agent does not receive, within ten business days after
the Confirmation Date, any amount due from a Rightholder as specified in Section
3 (e), then it shall take such action with respect to such Rightholder's Rights
as may be instructed in writing by the Fund, including without limitation (i)
applying any payment actually received by it toward the
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purchase of the greatest whole number of shares of Common Stock which could be
acquired with such payment, (ii) allocating unpaid for shares subject to such
Subscription Rights to one or more other Rightholders, and (iii) selling all or
a portion of the shares of Common Stock deliverable upon exercise of such Rights
on the open market, and applying the proceeds thereof to the amount owed.
9. No Subscription Certificate shall entitle a Rightholder 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 Rightholder 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.
10. If there shall be delivered to the Agent (i) evidence to the Agent's
and the Fund's satisfaction of the destruction, loss or theft of any
Subscription Rights and (ii) such security or indemnity as may be required by
the Agent and the Fund to save each of them harmless, then, in the absence of
notice to the Agent that the Rights evidenced by such Subscription Rights have
been acquired by a bona fide purchaser, the Agent may issue a new Subscription
Certificate for a like number of Rights in substitution for the Subscription
Certificate so lost, stolen or mutilated or destroyed.
11. (a) The Fund covenants that all shares of Common Stock issued on
exercise of Rights will be validly issued, fully paid, non-assessable and free
of preemptive rights.
(b) Upon request, the Fund shall furnish to the Agent an opinion of counsel
or other evidence satisfactory to the Agent to the effect that a registration
statement is then in effect with respect to its shares of Common Stock issuable
upon exercise of the Rights set forth in the Subscription Rights. Upon written
advice to the Agent that the Securities and Exchange Commission shall have
issued or threatened to have issued any order preventing or suspending the use
of the Prospectus, or if for any reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Act, the Agent shall cease
acting hereunder until receipt of written instructions from the Fund and such
assurances as it may reasonably request that it may comply with such instruction
without violations of the Act.
12. (a) Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Agent, shall be
the successor to the Agent hereunder without the execution or filing of any
document by any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor to the Agent. In case at the time such
successor to the Agent shall succeed to the agency created by this Agreement,
any of the Subscription Certificates
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shall have been countersigned but not delivered, any such successor to the Agent
may adopt the countersignature of the Agent and deliver such Subscription
Certificates as countersigned, and in case at that time any of the Subscription
Certificates shall not have been countersigned, the successor to the Agent may
countersign such Subscription Certificates either in the name of the Agent or in
the name of the successor Agent, and in all such cases such Subscription
Certificates shall have the full force and legal effect provided in the
Subscription Certificates and in this Agreement.
(b) If, at any time, the name of the Agent shall be changed and at such
time any of the Subscription Certificates shall have been countersigned but not
delivered, the Agent may adopt the countersignature under its prior name and
deliver Subscription Certificates so countersigned, and in case at that time any
of the Subscription Certificates shall not have been countersigned, the Agent
may countersign such Subscription Certificates either in its prior name or in
its changed name, and in all such cases such Subscription Certificates shall
have the full force provided in the Subscription Certificates and in this
Agreement.
13. The Fund agrees to pay to the Agent at the completion of the offering,
on demand of the Agent, reasonable compensation for all services rendered by it
hereunder and also its reasonable out-of-pocket expenses and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder.
14. 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 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 feels, 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
misconduct, and for the negligence or misconduct of its agents or
subcontractors.
(d) Nothing herein shall preclude the Agent from acting in any other
capacity for the Fund or for any other legal entity;
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(e) The Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any officer or assistant
officer of the Fund and to apply to any such officer or assistant officer of the
Fund for advice or instructions in connection with its duties, and shall be
indemnified and not be liable for any action taken or suffered by it in good
faith in accordance with instructions of any officer or assistant officer of the
Fund; and
(f) The Agent shall be indemnified and shall incur no liability for or in
respect of any action taken, suffered, or omitted by it in reliance upon any
Subscription Certificate or Certificate for 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.
15. The Agent may, without the consent or concurrence of the Shareholders
in whose names Subscription Certificates are registered, by supplemental
agreement or otherwise, concur with the Fund in making any changes or
corrections in a Subscription Certificate that it shall have been advised by
counsel (who may be counsel for the Fund) is appropriate to cure any ambiguity
or to correct any defective or inconsistent provision or clerical omission or
mistake or manifest error therein or herein contained, and which shall not be
inconsistent with the provisions of the Subscription Certificate or the
Prospectus except insofar as any such change may confer additional rights upon
the Shareholders.
16. 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.
17. The validity, interpretation and performance of this Agreement shall be
governed by the law of the Commonwealth of Massachusetts.
18. All capitalized terms used herein and not defined herein shall have the
meaning specified in the Prospectus.
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XXXXX XXXXXX XXXX XXX XXX XXX XXXXXXX HIGH INCOME
TRUST COMPANY FUND, INC.
_____________________________ ________________________________
Signature Signature
_____________________________ ________________________________
Title Title
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