SUBSCRIPTION AGENT AGREEMENT
Exhibit (k)(5)
This Subscription Agent Agreement (the “Agreement”) is made as of March 26, 2007 between The
Xxxxx Total Return Fund, Inc. (the “Company”), Computershare Shareholder Services, Inc., a
Delaware corporation and its fully owned subsidiary Computershare Trust Company, N.A., a national
banking (collectively, the “Agent” or individually “CSS” and the “Trust Company”, respectively).
All terms not defined herein shall have the meaning given in the prospectus (the “Prospectus”)
included in the (Registration Statement on Form N-2, Investment Company Act File No. 811-05620
filed by the Company with the Securities and Exchange Commission on December 22, 2006, as amended
by any amendment filed with respect thereto (the “Registration Statement”).
WHEREAS, the Company proposes to make 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 $0.001
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.
NOW, 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:
(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 five
Rights (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 one share 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 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 FPO 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.
| 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,
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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 CSS.
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 subscription price per share will be equal to the lower of the net asset value per
share of the fund’s common stock (“nav”) at the close of business on , 2007 (the “pricing
date”) or 95% of the average of the last reported sales price of a share of the fund’s common stock
on the nyse on the pricing date and the four preceding business days. As soon as practicable after
the Pricing Date (the “Confirm Date”), CSS 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.
E. Any additional payment required from a shareholder must be received by CSS within ten
Business Days after the Confirmation Date and any excess payment to be refunded by the Company to a
shareholder will be mailed by CSS 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), CSS will consult with the Company in accordance with Section 5 as to the appropriate action
to be taken. CSS will not issue or deliver certificates or Statements of Holding for shares
subscribed for
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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 Shares. |
The Agent will deliver (i) certificates or Statement of Holding reflecting new shares of
Company Common Stock in the Direct Registration System, 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 or Statements of Holding 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.
| 8. | Holding Proceeds of Rights Offering. |
A. All proceeds received by CSS from Shareholders in respect of the exercise of Rights shall
be held by CSS, 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. CSS 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.
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C. The Company acknowledges that the bank accounts maintained by CSS in connection with the
services provided under this Agreement will be in its name and that CSS may receive investment
earnings in connection with the investment at CSS’s risk and for its benefit of funds held in those
accounts from time to time.
| 9. | Reports. |
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 case 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 hereunder in accordance
with its Fee Schedule to act as Agent 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, Indemnification and Limitation of Liability. |
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.
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.
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Promptly after the receipt by the Agent of notice of any demand or claim or the commencement
of any action, suit, proceeding or investigation, the Agent shall, if a claim in respect thereof is
to be made against the Company, notify the Company thereof in writing. The Company shall be
entitled to participate as its own expense in the defense of any such claim or proceeding, and, if
it so elects at any time after receipt of such notice, it may assume the defense of any suit
brought to enforce any such claim or of any other legal action or proceeding. For the purposes of
this Section 12, the term “expense or loss” means any amount paid or payable to satisfy any claim,
demand, action, suit or proceeding settled with the express written consent of the Agent, and all
reasonable costs and expenses, including, but not limited to, reasonable counsel fees and
disbursements, paid or incurred in investigating or defending against any such claim, demand,
action, suit, proceeding or investigation.
C. 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 twelve (12) calendar months immediately preceding the event for which recovery
from the Agent is being sought.
| 13. | Changes in Subscription Certificate. |
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) 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.
| 14. | Assignment/Delegation. |
A. Except as provided in Section 14(B) 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. The Agent may, without further consent on the part of the Company, subcontract with other
subcontractors for systems, processing, telephone and mailing services, and post-exchange
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.
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C. Except as explicitly stated elsewhere in this Agreement, nothing under this Agreement
shall be construed to give any rights or benefits in this Agreement to anyone other than the Agent
and the Company and the duties and responsibilities undertaken pursuant to this Agreement shall be
for the sole and exclusive benefit of the Agent and the Company.
| 15. | Governing Law. |
The validity, interpretation and performance of this Agreement shall be governed by the law of
the Commonwealth of Massachusetts and shall inure to the benefit of and the obligations created
hereby shall be binding upon the successors and permitted assigns of the parties hereto.
| 16. | 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.
| 17. | 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, terrorist acts, equipment or transmission failure or
damage reasonably beyond its control, or other cause reasonably beyond its control, such party
shall not be liabile 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.
| 18. | 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 incidential 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.
| 19. | Severability. |
If any provision of this Agreement shall be held invalid, unlawful, or unenforceable, the
valididty, legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired.
| 20. | 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.
| 21. | 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.
| 22. | Confidentiality. |
The Agent and the Company agree that all books, records, informtion and data pertaining to the
business of the other party which are exchanged or received pursuant to the negotiation or the
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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.
| 23. | Term and Termination. |
This Agreement shall remain in effect until the earlier of (a) thirty (30) days after the
Expiration Date; (b) it is terminated by either party upon a material breach of this Agreement
which remains uncured for 30 days after written notice of such breach has been provided; or (c) 30
days’ written notice has been provided by either party to the other. Upon termination of the
Agreement, the Agent shall retain all canceled Certificates and related documentation as required
by applicable law.
| 24. | 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,
telecopier or overnight courier guaranteeing next day delivery, addressed as follows:
If to the Company, to:
The Xxxxx Total Return Fund, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Agent, to:
Computershare Trust Company, N.A.
c/o Computershare Shareholder Services, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Reorganization Department
c/o Computershare Shareholder Services, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Reorganization Department
| 25. | Survival. |
The provisions of Paragraphs 12, 15, 17-19, 22, and 24-26 shall survive any termination, for
any reason, of this Agreement.
(Remainder of this page intentionally left blank)
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| 26. | 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.
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.
| COMPUTERSHARE TRUST COMPANY, NA. | THE XXXXX TOTAL RETURN FUND, INC. | |||||||||||||
| By: | /s/ Illegible | By: | /s/ Xxxxx X. Xxxxxxx | |||||||||||
| Date: | 3/26/07 | Date: | 3/26/07 | |||||||||||
| Title: | Sr. Managing Director | Title: | Treasurer | |||||||||||
| COMPUTERSHARE SHAREHOLDER SERVICES, INC. | ||||||||||||||
| By: | /s/ Illegible | |||||||||||||
| Date: | 3/26/07 | |||||||||||||
| Title: | Sr. Managing Director | |||||||||||||
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