Exhibit (k)(2)
SUBSCRIPTION AGENT AGREEMENT
This Subscription Agent Agreement (the "Agreement") is made as of
October ___, 2003 between Xxxxxxxxx Convertible Growth and Income Fund, Inc.
(the "Fund") and American Stock Transfer & Trust Company, 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. 333-______) filed by the Fund with the Securities and Exchange
Commission on October ___, 2003, as amended by any amendment filed with respect
thereto (the "Registration Statement").
WHEREAS, the Fund proposes to make a subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Fund (the "Subscription Certificates") to stockholders of record (the
"Stockholders") of its common stock, par value $0.01 per share ("Common Stock"),
as of a record date specified by the Fund (the "Record Date"), pursuant to which
each Stockholder 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 Fund wishes the Agent to perform certain acts on behalf of
the Fund, 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 Fund 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.
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(a) Each Subscription Certificate shall be irrevocable
and non-transferable. The Agent shall, in its capacity as Transfer Agent of the
Fund, maintain a register of Subscription Certificates and the holders of record
thereof (each of whom shall be deemed a "Stockholder" hereunder for purposes of
determining the rights of holders of Subscription Certificates). Each
Subscription Certificate shall, subject to the provisions thereof, entitle the
Stockholder in whose name it is recorded to the following:
(1) With respect to Record Date Stockholders
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 six Rights
held (the "Primary Subscription Right"); and
(2) With respect to Record Date Stockholders
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 Stockholders who exercise Over-Subscription Rights
on the basis specified in the Prospectus; provided, however, that such Record
Date Stockholder has exercised all Primary Subscription Rights issued to him or
her (the "Over-Subscription Privilege"). Fractional Shares will not be issued
upon the exercise of Rights.
3. Rights and Issuance of Subscription Certificates.
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(a) Each Subscription Certificate shall evidence the
Rights of the Stockholder therein named to purchase Common Stock upon the terms
and conditions therein and herein set forth.
(b) Upon the written advice of the Fund, signed by any of
its duly authorized officers, as to the Record Date, the Agent shall, from a
list of the Fund Stockholders as of the Record Date to be prepared by the Agent
in its capacity as Transfer Agent of the Fund, prepare and record Subscription
Certificates in the names of the Stockholders, setting forth the number of
Rights to subscribe for the Fund's Common Stock calculated on the basis of one
Right for each share of Common Stock recorded on the books in the name of each
such Stockholder as of the Record Date. The number of Rights that are issued to
Record Date Stockholders will be rounded up by the Agent, to the nearest number
of full Rights evenly divisible by six 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 Fund deems
necessary or appropriate, to all Stockholders 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 Stockholders having a registered address outside
the United States (who will only receive copies of the Prospectus, instruction
letter and other documents as the Fund 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 Stockholders 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 Fund deems
necessary or appropriate, if any, but not Subscription Certificates to Record
Date Stockholders whose record addresses are outside the United States ("Foreign
Record Date Stockholders"). The Rights to which such Subscription Certificates
relate will be held by the Agent for such Foreign Record Date Stockholders'
accounts until instructions are received to exercise the Rights.
4. Exercise.
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(a) Record Date Stockholders 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
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executed by such Stockholder in accordance with and as provided by the terms and
conditions of the Subscription Certificate, together with (ii) the estimated
Subscription 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 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. Eastern time on 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 by the Agent.
(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. Eastern 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 New York Stock Exchange member firm, bank, a trust company or
other financial institution 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 and full payment for their Common Stock within eight
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 Fund will determine the Subscription Price by
taking the lesser of 95% of (A) the net asset value per share of the Fund's
Common Stock on November 20, 2003, (the "Pricing Date") or (B) the average of
the volume-weighted average sales prices of a share on the American Stock
Exchange on the Pricing Date and the four preceding trading days. By November
__, 2003 (the "Confirmation Date"), the Agent shall send to each exercising
Stockholder (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 Fund by such Stockholder or any excess to be
refunded by the Fund to such Stockholder 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 Stockholder
must be received by the Agent within eight Business Days after the Confirmation
Date and any excess payment to be refunded by the Fund to a Stockholder will be
mailed by the Agent within eight Business Days after the Confirmation Date. If a
Stockholder does not make timely payment of
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any additional amounts due in accordance with Section 4(d), the Agent will
consult with the Fund 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 Fund 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 Stockholders, there remain unexercised Rights, then the
Agent shall allot the shares issuable upon exercise of such unexercised Rights
(the "Remaining Shares") to Stockholders 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 Stockholders exercising
Over-Subscription Privilege based on the number of shares of Common Stock owned
by them on the Record Date. The percentage of Remaining Shares each
over-subscribing Record Date Stockholder may acquire will be rounded down to
result in delivery of whole shares of Common Stock. 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.
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 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.
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(a) All proceeds received by the Agent from Stockholders
in respect of the exercise of Rights shall be held by the Agent, on behalf of
the Fund, in a segregated, interest-bearing account (the "Account"). Such
interest shall accrue at the Federal Funds Rate to the Fund pending 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 Fund as promptly as practicable, but in
no event later than ten Business Days after the Confirmation Date. Proceeds held
in respect of Excess Payments (including interest and earned thereon) shall
belong to the Fund.
9. Reports. Daily, during the period commencing on October ___,
2003, until termination of the Subscription Period, the Agent will report by
telephone or telecopier, confirmed by letter, to an Officer of the Fund, data
regarding Rights exercised, the total number
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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 Fund 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 Fund 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 Fund agrees to pay to the Agent
compensation for its services as such in accordance with its Fee Schedule to act
as Agent, dated October __, 2003, and attached hereto as Exhibit A. The Fund
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
instructions or directions furnished to it by an appropriate officer of the
Fund, 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 Fund which
conforms to the applicable requirements of this Agreement and which the Agent
reasonably believes to be genuine.
(b) The Fund 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 Fund, 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 Fund 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 Stockholders in whose names Subscription
Certificates are registered, by supplemental agreement or otherwise, concur with
the Fund in making any changes or corrections in a Subscription Certificate that
it shall have been advised by counsel (who may be counsel for the Fund) is
appropriate to cure any ambiguity or to correct any defective or
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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 Stockholders.
14. Assignment, Delegation; No Third Party Beneficiaries.
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(a) 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.
15. Governing Law. The validity, interpretation and performance of
this Agreement shall be governed by the law of the State of New York.
16. No Joint Venture. This Agreement does not constitute an
agreement for a partnership or joint venture between the Agent and the Fund.
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, terrorism, 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 provisions 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.
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22. Confidentiality. The Agent and the Fund 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 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. This Agreement shall remain in effect until terminated
on __________, 2003 (the "Termination Date") or prior to the Termination Date,
upon 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 Agent and the Fund required or permitted hereunder shall be
delivered or mailed by first class mail, postage prepaid, addressed as follows:
If to the Fund, to:
Xxxxxxxxx Convertible Growth and Income Fund, Inc.
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent, to:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
25. Survival. The provisions of Xxxxxxxxxx 00, 00, 00, 00, 00, 00
- 00 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.
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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.
AMERICAN STOCK TRANSFER XXXXXXXXX CONVERTIBLE GROWTH
& TRUST COMPANY AND INCOME FUND, INC.
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Signature Signature
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Title Title
Exhibit A
A-1
