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EXHIBIT (d)(6)
SUBSCRIPTION RIGHTS AGENCY AGREEMENT
This Subscription Rights Agency Agreement (the "Agreement") is made as of
October 1, 1998 between The First Australia Prime Income Fund, Inc., a Maryland
corporation ("the Fund"), and State Street Bank and Trust Company, a
Massachusetts trust company, 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
("Subscription Rights"), to shareholders of record ("Shareholders") of its
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 to shares of the Fund's Common Stock, par value $0.01 ("Common
Stock"), as described in and upon such terms as are set forth in the final
prospectus (the "Prospectus") for the Form N-2 Registration Statement that was
filed by the Fund with the Securities and Exchange Commission on September 28,
1998 as amended from time to time, (the "Registration Statement");
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 Rights 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 First Australia
Prime Income Fund, Inc. hereby appoints and authorizes the Agent to act
on its behalf in accordance with the provisions hereof, and the Agent
hereby accepts such appointment and agrees to so act.
2. (a) Each Subscription Right shall evidence the Rights of the Rights
Holder 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 prepare and
record Subscription Rights in the names of the Shareholders, setting
forth the number of Rights to subscribe to the Fund's Common Stock
calculated on the basis of one-third of one Right for each share of
Common Stock recorded on the Fund's books in the name of each such
Shareholder as of the Record Date. Fractional Rights shall not be
issued and entitlement to Rights shall be rounded down. In the case of
shares held of record by Cede & Co. or any other depository or nominee
(a "Nominee Holder"), we will issue a subscription certificate to the
Depository on behalf of the underlying shareholders (a "Subscription
Certificate"). Each Subscription Certificate shall be dated as of the
Record Date and shall be executed manually or by facsimiles signature
of a duly authorized Officer
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of the Fund. Upon the written advice, signed as provided above, 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 Right shall, its having been exercised by the
holder thereof in the manner set forth in the Prospectus, become
irrevocable upon a completed Subscription Certificate having been
delivered to the Agent. The Agent shall, in its capacity as Transfer
Agent for the Fund maintain a register of Subscription Rights 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 Rights). Each Subscription Right shall, subject to the
provisions thereof, entitle the Shareholder in whose name it is
recorded to the following:
(1) The right (the "Basic Subscription Right") to purchase one share of
Common Stock for each whole Subscription Right (each Shareholder to
receive one-third of a Subscription Right for each share held on the
record date); and
(2) The right (the "Over-Subscription 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
Rightsholders who exercise Over-Subscription Rights on the basis
specified in the Prospectus; provided, however, that a Rightsholder who
has not exercised his Basic Subscription Rights with respect to the
full number of Rights that such Rightsholder owns as of the Expiration
Date, if any, shall not be entitled to any Over-Subscription Rights.
(b) A Rightsholder may exercise his Basic Subscription Rights and
Over-Subscription Rights by delivery to the Agent at its corporate
office specified in the Prospectus of (i) the Subscription Right with
respect thereto, duly executed by such Rightsholder in accordance with
and as provided by the terms and conditions of the Subscription Right,
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
United States and 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
p.m., New York City 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 be deemed to occur when such materials are
received at the corporate office of the Agent specified in the
Prospectus.
(d) Notwithstanding the provisions of Section 3(b) and 3(c) regarding
delivery of an executed Subscription Right to the Agent prior to 5
p.m., New York City time, on the Expiration Date, if prior to such time
the Agent receives notice of guaranteed delivery of mail or otherwise
from a bank, trust company or a New York Stock Exchange member of
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guaranteeing delivery of (i) full payment for shares purchased and
subscribed for by virtue of a Rightsholder's Rights, and (ii) a
properly completed and executed Subscription Certificate, then such
exercise of Basic Subscription Rights and Over-Subscription Rights
shall be regarded as timely, subject, however, to receipt of the duly
executed Exercise Form by the Agent by the close of business on the
seventh calendar day after the Expiration Date.
(e) Within fourteen calendar days following the Pricing Date (the
"Confirmation Date"), the Agent shall send a confirmation to each
exercising Rightsholder (or, for shares of Common Stock on the Record
Date held by Cede & Co. or any other depository or nominee, directly to
the 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 Over-Subscription Rights, (iii) the
per share and total purchase price for the shares, and (iv) any
additional amount payable by such Rightsholder to the Fund or any
excess to be refunded by the Fund to such Rightsholder, in each case
based on the Subscription Price as determined on the Pricing Date. Any
additional payment required from a Rightsholder 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 Rightsholder, shall be mailed
by the Agent to the Rightsholder within ten business days after the
Confirmation Date, as provided in Section 6 below.
4. If, after allocation of shares of Common Stock to persons exercising
Basic Subscription Rights, there remain unexercised Rights, then the
Agent shall allot the shares issuable upon exercise of such unexercised
Rights (the "Remaining Shares") to persons exercising Over-Subscription
Rights, in the amounts of such over-subscriptions. If the number of
shares for which Over-Subscription Rights have been exercised is
greater than the Remaining Shares, the Agent shall allot the Remaining
Shares to the persons exercising Over-Subscription Rights pro rata
based solely on the number of Rights held on the Expiration Date.
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 Rightsholders within fifteen business
days 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 Over-Subscription Rights
or a confirmation of an account credit to Dividend Reinvestment
participants; and (ii) in the case of each Rightsholder who subscribed
and paid for shares at an assumed purchase price greater than the
actual per share purchase price, a refund in the amount of the
difference between the assumed purchase price and the actual purchase
price.
(b) The Agent shall deliver the proceeds of the exercise of Primary
Rights to the Fund one business day after the expiration of the
guarantee period and deliver the proceeds of
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the exercise of rights pursuant to the Over Subscription Privilege two
business days after the expiration of the guarantee period.
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 and Prudential Securities
Incorporated, X.X. Xxxxxxx & Sons, Inc. and Xxxxxxx Xxxxx Barney, Inc.
(the "Dealer Managers") from day to day during the period of, and
promptly after the termination of, the Offer the total number of Rights
exercised by each Rightsholders during the immediately preceding day
(indicating the total number of Rights verified to be in proper form
for exercise, rejected for exercise and being processed) and the number
of Rights exercised on Subscription Certificates indicating the Dealer
Managers or such soliciting broker as the broker-dealer with respect to
such exercise and such other information as the Fund or the Dealer
Managers may reasonably request.
(c) The Agent shall notify the Fund and the Dealer Managers no later
than 5 p.m., New York City 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 exercise and being processed, and such other information as the
Fund or the Dealer Managers may reasonably request.
(d) Upon request of the Fund after the Confirmation Date, the Agent
shall notify the Fund, and at the Fund's request the Dealer Managers 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 Shareholder as specified
in Section 3(e), then it shall take such action with respect to such
Shareholder's Subscription 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, (ii) allocating the shares subject to such Subscription Rights
to one or more other Shareholders, and (iii) selling all or a portion
of the shares of Common Stock deliverable upon exercise of such
Subscription Rights on the open market, and applying the proceeds
thereof to the amount owed.
9. No Subscription Right shall entitle a Shareholder 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 Right be
construed to confer upon any Rightsholder 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 meeting or 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
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upon the exercise thereof shall have become deliverable as provided in
this Agreement and in the Prospectus.
10. (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) The Fund shall furnish to the Agent, upon request, evidence
satisfactory to the Agent to the effect that a registration statement
under the Securities Act of 1933, as amended (the "Act"), is then in
effect with 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.
11. (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 Agent. In case at the time such successor to the Agent shall
succeed to the agency created by this Agreement, any of the
Subscription Rights 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 Rights so countersigned,
and in case at that time any of the Subscription Rights shall not have
been countersigned, any successor to the Agent may countersign such
Subscription Rights either in the name of the predecessor Agent or in
the name of the successor Agent, and in all such cases such
Subscription Rights shall have the full force provided in the
Subscription Rights and in this Agreement.
(b) In case at any time the name of the Agent shall be changed and at
such time any of the Subscription Rights have been countersigned but
not delivered, the Agent may adopt the countersignature under its prior
name and deliver Subscription Rights so countersigned, and in case at
that time any of the Subscription Rights shall not have been
countersigned, the Agent may countersign such Subscription Rights
either in its prior name or in its changed name, and in all such cases
such Subscription Rights shall have the full force provided in the
Subscription Rights and in this Agreement.
12. 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
as set forth in Schedule A (attached).
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13. 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
liabilities 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 gross negligence or willful misconduct.
(c) The Agent shall be liable hereunder only for its own gross
negligence or willful misconduct and for the negligence or misconduct
of its agents or subcontractors.
(d) The Agent may consult with legal counsel of its selection (who
maybe legal counsel to the Fund), and the opinions of such counsel
shall be full and complete authorization and protection to the Agent as
to any action taken or omitted by it in good faith and in accordance
with such opinion.
(e) Nothing herein shall preclude the Agent from acting in any other
capacity for the Fund or for any other legal entity.
(f) 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 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.
(g) 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 Right 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.
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14. The Agent may, without the consent or concurrence of the Shareholders
in whose names Subscription Rights are registered, by supplemental
agreement or otherwise, concur with the Fund in making any changes or
corrections in a Subscription Right 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 Right or the Prospectus except insofar as any such
change may confer additional rights upon the Shareholders.
15. All the covenants and provisions of the 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.
16. All capitalized terms used herein and not defined herein shall have the
meaning specified in the Prospectus.
17. The validity, interpretation and performance of this Agreement shall be
governed by the law of the Commonwealth of Massachusetts.
STATE STREET BANK AND TRUST COMPANY THE FIRST AUSTRALIA PRIME
INCOME FUND, INC.
By:__________________________ By:________________________
Name:
Title:
Dated:_______________________ Dated:_____________________
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