EXHIBIT 99.k(i)
Draft -- November 16, 0000
XXXXX XXXXXX XXXX AND TRUST COMPANY
SUBSCRIPTION RIGHTS DISTRIBUTION AND AGENCY AGREEMENT
This Subscription Rights Distribution and Agency Agreement (the
"Agreement") is made as of November __, 1995 between The Brazil Fund, Inc. (the
"Company"), a Maryland corporation and State Street Bank and Trust Company, a
national banking association, as subscription and distribution agent ("Agent").
Certain capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectus (as defined below).
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 ("Subscription Certificates"), to shareholders of record ("Record
Date Shareholders") of its Common Stock, par value $0.01 per share ("Common
Stock"), as of a record date specified by the Company (the "Record Date"),
pursuant to which each Record Date Shareholder will receive transferable rights
(the "Rights") to subscribe to purchase shares of Common Stock, as described in
the prospectus (the "Prospectus") included in the Form N-2 Registration
Statement filed by the Company with the Securities and Exchange Commission on
October 13, 1995, as amended by any amendments filed with respect thereto (the
"Registration Statement");
WHEREAS, the Company wishes the Agent to perform certain acts on
behalf of the Company and the Agent is willing so to act, in connection with the
distribution of the Subscription Certificates and the issuance and exercise of
the Rights all upon the terms and conditions set forth herein and in the manner
described in the Prospectus;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements set forth herein, the parties agree as follows:
1. The Company 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 in the Prospectus set forth.
(b) Upon the written advice of the Company signed by its Chairman, President,
Secretary or Assistant Secretary, as to the Record Date, the Agent shall,
from a list of the Company's Shareholders as of the Record Date to be
prepared by the Agent in its capacity as the Company's Transfer Agent,
prepare and record Subscription Certificates in the names of the Record
Date Shareholders, setting forth the number of Rights to subscribe to the
Company's Common Stock calculated on the basis of one Right for each share
recorded on the Company's books in the name of each such Record Date
Shareholder as of the Record Date. Fractional Rights will not be issued.
Each Subscription Certificate shall be dated as of the Record Date. Upon
the written advice 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 whose addresses are in the United States.
3. (a) Each Subscription Certificate shall be irrevocable and shall be fully
transferable. The Agent shall maintain a register of Subscription Certificates
and the holders of record thereof. Each Subscription Certificate shall entitle
the holder to the rights set forth on the face thereof and set forth in the
Prospectus.
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(b) A Record Date Shareholder may exercise his Rights under the Primary
Subscription and Over-Subscription Privilege by delivery to the Agent in the
manner specified in the Prospectus of (i) the Subscription Certificate with
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respect thereto, duly executed by such Record Date Shareholder in accordance
with and as provided by the terms and conditions of the Subscription
Certificate, together with (ii) the Subscription Price for each share of Common
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Stock subscribed for by exercise of such Rights, in United States dollars in
cash, by check, or money order 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 Company.
(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 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 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 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 under
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the Primary Subscription and the Over-Subscription Privilege (if any) and
(ii) a properly completed and executed Subscription Certificate, then such
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exercise of Primary Subscription Rights and the Over-Subscription
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Privilege 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 sent to each 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) a
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confirmation showing (i) the number of Shares acquired pursuant to the
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Primary Subscription Rights, (ii) the number of Shares, if any, acquired
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pursuant to the Over-Subscription Privilege, (iii) the per Share and total
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purchase price for the Shares, (iv) any amount payable to the Shareholder
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pursuant to Section 9, and (v) any excess to be refunded by the Company to
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such Shareholder, in each case based on the Subscription Price; and (B) a
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letter explaining the allocation of shares pursuant to the Over-
Subscription Privilege. Any excess payment to be refunded by the Company
to a Shareholder, shall be mailed by the Agent to the Shareholder as
promptly as possible but in no event later than fifteen Business Days after
the Expiration Date, as provided in Section 5 below.
4. If, after allocation of Shares to persons exercising Rights in the Primary
Subscription, there remain unexercised Rights, then the Agent shall allot the
Shares issuable upon exercise of such unexercised Rights (the "Remaining
Shares") to persons exercising the Over-Subscription Privilege, 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 allot the Remaining Shares to the persons exercising the Over-
Subscription Privilege pro rata based solely
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on the number of Rights originally issued to them, as more fully described in
the Prospectus. 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.
5. The Agent will deliver (i) certificates representing those Shares purchased
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pursuant to the Primary Subscription as soon as practicable after the
corresponding Rights have been validly exercised and full payment for such
Shares has been received and cleared, it being understood that certificates
representing those Shares subscribed for by the Dealer Manager upon its exercise
of the corresponding Rights will be delivered to the Dealer Manager no later
than the close of business on the Business Day following the day that full
payment for such Shares has been received by the Agent; (ii) certificates
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representing those Shares purchased pursuant to the Over-Subscription Privilege
as soon as practicable after the Expiration Date and after all allocations have
been effected; (iii) in the case of each holder of Rights whose Rights were sold
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pursuant to Section 9, as promptly as possible but in no event later than
fifteen Business Days after the Expiration Date, proceeds of such sale
(provided, however, that proceeds of sales on behalf of Record Date Shareholders
whose Subscription Certificates are undeliverable shall be held by the Agent
until they are either claimed or escheated); (iv) in the case of each Record
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Date Shareholder who subscribed, pursuant to the Over-Subscription Privilege,
for a greater number of Shares than was allotted to such Record Date Shareholder
under Section 4, as promptly as possible but in no event later than fifteen
Business Days after the Expiration Date, a refund in the amount of the
difference between the purchase price delivered for the Shares subscribed for
pursuant to such Over-Subscription Privilege and the purchase price of the
Shares so allotted under Section 4 (an "Excess Payment"), and the Agent will
deliver to the Company all interest accrued on such Excess
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Payment; (v) in the case of Record Date shareholders who are participants in the
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Dividend Reinvestment and Cash Purchase Plan, as promptly as possible but in no
event later than fifteen Business Days after the Expiration Date, account
statements reflecting a credit of uncertificated Shares for their Primary
Subscription and Over-Subscription Shares unless such shareholders have elected
to receive certificates.
6. (a) All proceeds received by the Agent from holders of Rights in respect
of the exercise of Rights shall be held by the Agent, on behalf of the Company,
in a segregated, interest-bearing account (the "Account") pending disbursement
in the manner described in Section 6(b) below.
(b) The Agent shall deliver all proceeds received in respect of the exercise of
the Rights (including interest earned thereon) to the Company as promptly
as practicable after full payment in respect of such exercise has been
received and cleared; provided that the Agent shall not deliver to the
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Company proceeds in excess of the aggregate maximum offering price shown on
the Registration Statement, and any such excess proceeds shall be held in
the Account to fund Excess Payments after the Expiration Date.
7. The Agent (a) shall supply the Company with a certified list of Record Date
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Shareholders and the number of shares owned of record by each and (b) shall
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promptly advise the Company as to the date of delivery of and the number of
Common Stock issued pursuant to the exercise of Rights hereunder.
8. The Agent shall account promptly to the Company 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.
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9. The Agent shall use its best efforts to sell, at current market prices,
either to the Dealer Manager or through the Dealer Manager on the New York Stock
Exchange, on the terms set forth in the Prospectus, (i) all Rights submitted to
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it for sale by Record Date Shareholders in accordance with the Prospectus,
provided such Rights are received by the Agent at least one day prior to the
Expiration Date, (ii) all Rights of Record Date Shareholders whose Subscription
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Certificates remain unclaimed as a result of being returned by postal
authorities as undeliverable as of the fourth Business Day prior to the
Expiration Date, (iii) all Rights of Foreign Record Date Shareholders in respect
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of which no instructions have been received by the Agent by 12:00 noon, New York
City time, two Business Days prior to the Expiration Date, and (iv) all Rights a
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Record Date Holder is unable to exercise because such Rights represent the right
to subscribe for less than one Share. To the extent permitted by applicable law,
such sales will be made exclusively either to or through the Dealer Manager, and
the Agent shall deliver the proceeds of such sales to the respective Record Date
Holders net of commissions charged by the Dealer Manager. The Agent agrees to
inform the Dealer Manager at reasonable intervals each Business Day during the
Subscription Period (orally, to be followed by written confirmation) of the
number of Rights available for sale pursuant to this Section 9.
10. In the event that the Agent does not receive, within three Business Days
after the Expiration Date, any Certificate or amount due from a holder of Rights
as specified in Section 3(d), then it shall take such action with respect to
such Holder's Rights as may be instructed by telephone or in writing by the
Company including without limitation (i) applying any payment actually received
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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
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such Rights to Record Date
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Shareholders who have exercised their Over-Subscription Privilege as set forth
in the Prospectus, but have not been allocated the full number of shares
requested, and (iii) selling all or a portion of the Shares of Common Stock
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deliverable upon exercise of such Rights on the open market, and applying the
proceeds thereof to the amount owed.
11. No Subscription Certificate shall entitle a holder of Rights 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 of Rights any of the rights of a shareholder
of the Company or any right to vote, give or withhold consent to any action by
the Company (whether upon any recapitalization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings 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 upon the exercise thereof shall have become
deliverable as provided in this Agreement and in the Prospectus.
12. If the Agent is requested to issue a new Subscription Certificate to
replace one that has been lost, stolen, mutilated or destroyed, the Agent may
issue a new Subscription Certificate of like denomination in substitution for
the Subscription Certificate so lost, stolen, mutilated or destroyed, subject to
the conditions that the party requesting the replacement Subscription
Certificate (i) provides appropriate indemnification to the Company, (ii) in the
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case of a mutilated Subscription Certificate, surrenders such Subscription
Certificate and (iii) complies with any such other conditions as the Agent in
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its discretion may impose.
13. (a) The Company covenants that all Shares of Common Stock issued on
exercise of Rights set forth in
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the Subscription Certificates will be validly issued, fully paid, nonassessable
and free of preemptive rights (other than the Rights).
(b) The Company shall furnish to the Agent, upon request, an opinion of counsel
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 the exercise of the
Rights evidenced by 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
Company and such assurances as it may reasonably request that it may comply
with such instruction without violation of the Act.
14. (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 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,
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and in case at that time any of 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.
(b) In case at any time the name of the Agent shall be changed and at such time
any of the Subscription Certificates shall have been signed but not
delivered, the Agent may adopt the signature under its prior name and
deliver Subscription Certificates so signed, and in case at that time any
of the Subscription Certificates shall not have been signed, the Agent may
sign 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 this
Agreement.
15. The Company agrees to pay to the Agent from time to time, on demand of the
Agent, reasonable compensation for all services rendered by it hereunder and
also its reasonable expenses and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder, all as set forth in the Rights Subscription Fee
Schedule attached 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
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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 Company 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 Company 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, willful
misconduct, or material breach of this Agreement.
(c) Nothing herein shall preclude the Agent from acting in any other capacity
for the Company or for any other legal entity.
(d) The Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any officer
referred to in subsection (a) above of the Company and to apply to any such
officer of the Company for advice or instructions in connection with its
duties, and shall be indemnified and not liable for any action taken or
suffered by it in good faith in accordance with instructions of such
officer.
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(e) 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.
(f) 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 act or failure to act hereunder.
17. The Agent may, without the consent or concurrence of the shareholders in
whose names Subscription Certificates are registered, by supplemental agreement
or otherwise, concur with the Company in making any changes or corrections in a
Subscription Certificate that it shall have been advised by counsel (who may be
counsel for the Company) and are 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 of Rights.
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.
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(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 Company
subcontract for the performance hereof with (i) Boston Financial Data
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Services, Inc., a Massachusetts Corporation ("BFDS"), which is duly
registered as a transfer agent pursuant to Section 17(c)(1) of the
Securities Exchange Act of 1934 or (ii) the current third party vendor
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utilized by BFDS; provided, however, that the Agent shall be as fully
responsible to the Company for the acts and omissions of any agent or
subcontractor as it is for its own acts and omissions.
19. All covenants and provisions of this Agreement by or for the benefit of the
Company 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 law of the Commonwealth of Massachusetts.
STATE STREET BANK THE BRAZIL FUND, INC.
AND TRUST COMPANY
By: By:
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Vice President Title:
Dated: Dated:
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