FORM OF SUBSCRIPTION AGENT AGREEMENT
This Subscription Agent Agreement (the "Agreement") is made as of
__________________, 2003 between Liberty All-Star Growth Fund, Inc. (the "
Company") and EquiServe Trust Company, N.A. as subscription agent (the "Agent").
All terms not defined herein shall have the meaning given in the prospectus (the
"Prospectus") included in the Registration Statement on Form N-2 (File No.
811-04537) filed by the Company with the Securities and Exchange Commission on
____________, 2003, 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 eight 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 (listed in Paragraph 12(a)), 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 eight shares of Common Stock recorded
on the books in the name of each such Shareholder as of the Record Date. The
number of Rights that are issued to Record Date Shareholders will be rounded
down, 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 (which includes its territories and possessions
and the District of Columbia). Delivery shall be by first class 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 delivery by air mail (without registration or
insurance) 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 ("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 as
specified in the Prospectus by delivery to the Agent of (i) the Subscription
Certificate with respect thereto, duly executed by such Shareholder in
accordance with and as provided by the terms and conditions of the Subscription
Certificate, together with (ii) the estimated purchase price, as disclosed in
the Prospectus, for each share of Common Stock subscribed for by exercise of
such Rights, including shares of Common Stock subscribed for in an exercise of
the Over-Subscription Privilege, in U.S. dollars by money order or check drawn
on a bank in the United States, in each case payable to the order of the Company
or the Agent.
(b) Rights may be exercised at any time after the date of issuance of
the Subscription Certificates with respect thereto but no later than 5:00 P.M.
New York time on such date as the Company shall designate to the Agent in
writing (the "Expiration Date"). For the purpose of determining the time of the
exercise of any Rights, delivery of any material to the Agent shall be deemed to
occur when such materials are received at the Shareholder Services Division of
the Agent specified in the Prospectus.
(c) Notwithstanding the provisions of Section 4 (a) and 4 (b) regarding
delivery of an executed Subscription Certificate to the Agent prior to 5:00 P.M.
New York time on the Expiration Date, if prior to such time the Agent receives a
Notice of Guaranteed Delivery by facsimile (telecopy) or otherwise from a bank,
a trust Company or a New York Stock Exchange member guaranteeing delivery of (i)
payment of the full Subscription Price for the shares of Common Stock subscribed
for on Primary Subscription and any additional shares of Common Stock subscribed
for pursuant to the Over-Subscription Privilege, and (ii) a properly completed
and executed Subscription Certificate, then such exercise of Primary
Subscription Rights and Over-Subscription Rights shall be regarded as timely,
subject, however, to receipt of the duly executed Subscription Certificate and
full payment for the shares of 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 Confirm
Date (as defined in Section 4(d)). For the purposes of the Prospectus and this
Agreement, "Business Day" shall mean any day on which trading is conducted on
the New York Stock Exchange.
(d) The Company will determine the Subscription Price by taking 95% of the
lower of the last reported sale prices of shares of Common Stock on the New York
Stock Exchange on the "Pricing Date" (as that term is defined in the
Prospectus), or the net asset value of a share of Common Stock on the Pricing
Date. As soon as practicable after the Pricing Date (the "Confirm Date"), the
Agent shall send to each exercising shareholder (or, if shares of Common Stock
on the Record Date are held by Cede & Co. or any other depository or nominee, to
Cede & Co. or such other depository or nominee) a confirmation showing the
number of shares of Common Stock acquired pursuant to the Primary Subscription,
and, if applicable, the number of shares of Common Stock acquired in 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
the Agent within eight Business Days after the Confirm Date and any excess
payment to be refunded by the Company to a Shareholder will be mailed by the
Agent within eight Business Days after the Confirm Date. If a Shareholder does
not make timely payment of any additional amounts due in accordance with Section
4(d), the Agent will consult with the Company in accordance with Section 5 as to
the appropriate action to be taken. The Agent will not issue or deliver
certificates for shares subscribed for until payment in full has been received,
including collection of checks and payment pursuant to a Notice 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 of Common Stock 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 Rights issued to them by the
Company. The percentage of Remaining Shares each over-subscribing Record Date
Shareholder may acquire will be rounded 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 of
Common Stock subscribed for and distributable.
7. Delivery of Certificates. The Agent will deliver (i) certificates
representing those shares of Common Stock purchased pursuant to exercise of
Primary Subscription Rights as soon as practicable after the corresponding
Rights have been validly exercised and full payment for such shares has been
received and cleared, and (ii) certificates representing those shares of Common
Stock 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 the Agent from Shareholders in respect of
the exercise of Rights shall be held by the Agent, on behalf of the Company, in
a segregated interest-bearing account (the "Account"). Interest shall accrue at
85% of the Federal Funds Rate to the Company on funds held in the Account until
disbursement in the manner described in Section 4(e) above.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of Rights to the Company as promptly as practicable, but in no event
later than ten business days after the Confirm Date.
9. Reports.
(a) Daily, during the period commencing on __________, until
termination of the Subscription Period, the Agent will report by telephone or
telecopier, confirmed by letter, to an Officer (as defined in Section 12(a)) 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 reasonably requested
by the Company.
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 under this Agreement in accordance with the Fee
Schedule dated ___________________ and attached hereto as Exhibit A. The Company
further agrees that it will reimburse the Agent for its reasonable out-of-pocket
expenses incurred in the performance of its duties.
12. Instructions and Indemnification. The Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions:
(a) The Agent shall be entitled to rely upon any written instructions
or directions furnished to it by an appropriate Officer of the Company
(President, Vice President, Secretary, Assistant Secretary, or Treasurer), in
conformity with the provisions of this Agreement. 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.
(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 negligence, bad faith or willful misconduct of the Agent or such
nominees.
(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.
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 or Prospectus except insofar as any such change may confer
additional rights upon the Shareholders.
14. Assignment, Delegation.
(a) Except as provided in Section 14(c) below, neither this Agreement
nor any rights or obligations hereunder may be assigned or delegated by either
party without the written consent of the other party.
(b) This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns. Nothing in
this Agreement is intended or shall be construed to confer upon any other person
any right, remedy or claim or to impose upon any other person any duty,
liability or obligation.
(c) The Agent may, without further consent on the part of the Company,
(i) subcontract for the performance hereof with EquiServe Limited Partnership or
(ii) subcontract with other subcontractors for systems, processing, telephone
and mailing services, and post-merger clean up activities, as may be required
from time to time; provided, however, that the Agent shall be as fully
responsible to the Company for the acts and omissions of any subcontractor as it
is for its own acts and omissions.
15. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the law of the Commonwealth of Massachusetts.
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,
equipment or transmission failure or damage reasonably beyond its control, or
other cause reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes. Performance under this Agreement shall resume when
the affected party or parties are able to perform substantially that party's
duties.
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 incidental damages arising out of any act or failure to act
hereunder even if that party has been advised of or has foreseen the possibility
of such damages.
19. Severability. If any provision of this Agreement shall be held invalid,
unlawful, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired.
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, information and data pertaining to the business of the other party
which are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law. The Agent shall
not disclose or use any nonpublic information (as that term is defined in SEC
Regulation S-P promulgated under Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999)
relating to the customers of the Company and/or its affiliates ("Customer
Information") except as may be necessary to carry out the purposes of this
Agreement. The Agent shall use best efforts to safeguard and maintain the
confidentiality of such Customer Information, and to limit access to and usage
of such customer Information to those employees, officers, agents and
representatives of the Agent who have a need to know the information or as
necessary to provide the services under this Agreement.
23. Term. This Agreement shall remain in effect until terminated on ___________
(the "Termination Date") or, prior to the Termination Date, upon 30 days'
written notice 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 Agent
and the Company required or permitted hereunder shall be delivered or mailed by
first class mail, postage prepaid, addressed as follows:
If to the Company, to:
Xxxxxxx Xxxxxxxxxx
Liberty Asset Management Company
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Exchange Agent, to:
EquiServe Trust Company, N.A.
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Reorganization Department
25. Survival. The provisions of Paragraphs 12, 17, and 22 shall survive any
termination, for any reason, of this Agreement.
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.
EQUISERVE TRUST COMPANY, NA. COMPANY
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Signature Signature
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Title Title
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Date Date
[LOGO] EQUISERVE
FORM OF EXHIBIT A
to SUBSCRIPTION AGENT AGREEMENT DATED __________
LIBERTY ALL-STAR GROWTH FUND, INC.'S RIGHTS OFFERING
A. FEES FOR SERVICES *
===============================================================================
$ 12,500.00 Project Management Fee
$ 2.00 Per subscription form issued and mailed
$ 9.50 Per subscription form processed
(registered and beneficial)
$ 15.00 Per defective subscription form received
$ 15.00 Per notice of guaranteed delivery received
$ 2.00 Per broker split certificate issued
$ 3.00 Per sale of right (if applicable)
$ 4.50 Per invoice mailed (if applicable)
$ 1.75 Per refund check issued and mailed
(if applicable)
$ 5.00 Per solicitation check processed and
mailed (if applicable)
$ 15.00 Per withdrawal of subscription certificate
(if applicable)
$ 50.00 Per wire (if applicable)
$ 1,000.00 New York window fee for Midnight
expiration (if applicable)
$ 3,000.00 Per offer extension
$ 5,000.00 Minimum charge should the project be
canceled for any reason prior to
the mailing of the subscription form
================================================================================
*Excludes out-of-pocket expenses as described in Section C, "Items Not Covered"
B. SERVICES COVERED
o Designating an operational team to carry out Subscription
Agent duties, including document review and execution of
legal agreement, review of subscription certification and
communication materials, project management, and on-going
project updates and reporting
o Calculating Rights to be distributed to each Shareholder and
printing Shareholder information on the subscription
certification
o Issuing and mailing subscription certifications to Registered
Shareholders
o Tracking and reporting the number of exercises made, as
required
o Processing Rights received and exercised
o Deposit participant checks daily and forward all participant
funds to Liberty All-Star Growth Fund, Inc. at the end of the
offering period
o Providing receipt summation of checks received
o Affixing legends to appropriate stock certificates, where
applicable
o Issuing and mailing stock certificates and/or checks
o Interfacing with the Information Agent
o Calculating, issuing and mailing of proration and/or over-
subscription checks if applicable
o Calculating, issuing, mailing and collection of invoices
if applicable
o Calculating, issuing and mailing of solicitation checks
if applicable
C. ITEMS NOT COVERED
o Items not specified in the "Services Covered" section set forth
in this Agreement, including any services associated with new
duties, legislation or regulatory fiat which become effective
after the date of this Agreement (these will be provided on an
appraisal basis)
o All out-of-pocket expenses such as telephone line charges,
overprinting, certificates, checks, postage, stationery, wire
transfers, and excess material disposal (these will be billed as
incurred)
o Reasonable legal review fees if referred to outside counsel
(must receive permission in writing from Company prior to
referring an issue to outside counsel)
o Overtime charges assessed in the event of late delivery of
material for mailings unless the target mail date is rescheduled
D. ASSUMPTIONS
o Fee schedule based upon document review and information known
at this time about the transaction.
o Significant changes made in the terms or requirements of this
transaction could require modifications to this Agreement
o Proposal must be executed prior to the initial mailing
o Company responsible for printing of materials (Rights card,
Prospectus and ancillary documents)
o Material to be mailed to Shareholders must be received no less
than five (5) business days prior to the start of the
mailing project
E. PAYMENT FOR SERVICES
The Project Management Fee will be rendered and payable on the
effective date of the transaction. An invoice for any out-of-pocket
expenses and per item fees realized will be rendered and payable on a
monthly basis, except for postage expenses in excess of $5,000. Funds
for such mailing expenses must be received one (1) business day prior
to the scheduled mailing date; provided, however, that the Agent shall
provide five (5) business days notice of any such amount to be paid.
EquiServe Trust Company, N.A. Liberty All-Star Growth Fund, Inc.
By: By:
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Title: Title:
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Date: Date:
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