Exhibit K10
NEW AMERICA HIGH INCOME FUND, INC.
SUBSCRIPTION RIGHTS AGENCY AGREEMENT
This Subscription Rights Agency Agreement (the "Agreement") is made as
of this 31st day of January, 1997, by and between New America High Income Fund,
a Maryland Corporation (the "Fund"); and State Street Bank and Trust Company, a
national banking association, as subscription and distribution agent ("Agent").
WHEREAS, the Fund proposes to make a subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Fund (the "Subscription Certificates") to shareholders of record (the
"Shareholders") of its Common Stock, par value $.01 per share (the "Common
Stock"), as of a record date specified by the Fund (the "Record Date"), pursuant
to which each Shareholder will have certain rights (the "Rights") to subscribe
for shares of Common Stock, as described in and upon such terms as are set forth
in the final prospectus (the "Prospectus") included in the Form N-2 Registration
Statement originally filed by the Fund with the Securities and Exchange
Commission on , as amended (as amended, the "Registration Statement"), in
accordance with the applicable requirements of the Securities Act of 1933, as
amended (the "Act");
WHEREAS, the Fund wishes the Agent to perform certain acts on its
behalf and the Agent is willing to so act, in connection with the distribution
of the Subscription 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. Pursuant to resolution of its Board of Directors, the Fund 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 Shareholder 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 its
Chairman, President, Secretary or Assistant Secretary, as to
the Record Date, the agent shall, from a list of Shareholders
as of the Record Date to be prepared by the Agent in its
capacity as Transfer Agent of the Fund, prepare and record
Subscription Certificates in the names of the Shareholders,
setting forth the number of Rights to subscribe to Common Stock
calculated on the basis of one Right for each
share of Common Stock recorded on the books of the Fund in the
name of each such Shareholder as of the Record Date.
3. Rights and Issuance of Subscription Certificates.
(a) Each Subscription Certificate shall be transferable and
shall, unless exercised by the holder thereof in the manner
set forth in the Prospectus expire upon the expiration of the
offer. The Agent shall, in its capacity as transfer agent for
the Fund, maintain a register of Subscription Certificates and
the holders of record thereof (each of whom shall be deemed a
"Rightholder" hereunder for purposes of determining the rights
of holders of Subscription Certificates). Each Subscription
Certificate shall, subject to the provisions thereof, entitle
the Rightholder in whose name it is recorded to the following:
(1) The right (the "Basic Subscription
Right") to purchase a number of shares of Common Stock equal
to one share of Common Stock for every one Right; provided,
however, that no fractional shares of Common Stock shall be
issued; and
(2) The right (the "Oversubscription Right")
to purchase additional shares of Common Stock, subject to the
availability of such shares and to allotment of such shares as
may be available among Rightholders who exercise
Oversubscription Rights on the basis specified in the
Prospectus; provided, however, that a Rightholder who has not
exercised his Basic Subscription Right with respect to the
full number of shares that such Rightholder is entitled to
purchase by virtue of his Basic Subscription Right as of the
Expiration Date, if any, shall not be entitled to any
Oversubscription Right.
(b) A Rightholder may exercise his Basic Subscription Right
and Oversubscription Right by delivery to the Agent at its
corporate office specified in the Prospectus of (i) the
Subscription Certificate with respect thereto, duly executed
by such Rightholder in accordance with and as provided by the
terms and conditions of the Subscription Certificate, together
with (ii) the estimated subscription price for each share of
Common Stock subscribed for by exercise of such Rights, in
United States dollars by money order or check drawn on a bank
located in the U.S. and in each case payable to the order of
New America High Income Fund.
(c) Rights may be exercised at any time after the date of
issuance of the Subscription Certificates with respect thereto
but no later than 5:00 P.M. New York City Time on such date as
the Fund shall designate to the Agent in writing (the
"Expiration Date"). For the purpose of determining the time of
the exercise of any Rights, delivery of any material to the
Agent shall be deemed to occur when such materials are
received at the corporate office of the Agent specified in the
Prospectus.
2
(d) Not withstanding the provisions of Section 3(b) and 3(c)
above 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 a properly completed and executed notice of
guaranteed delivery in the form accompanying the Prospectus by
facsimile (telecopier) or otherwise from a financial
institution that is a member of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the
New York Stock Exchange Medallion Signature Program,
guaranteeing delivery of (i) payment of the full subscription
price for shares purchased and subscribed for by virtue of a
Subscription Certificate, and (ii) a properly completed and
executed Subscription Certificate, then such exercise of Basic
Subscription Rights and Oversubscription Rights shall be
regarded as timely, subject, however, to receipt of the
duly-executed Subscription Certificate by the Agent within
five business days after the Expiration Date and receipt of
full payment within ten business days after the Confirmation
Date (as defined below).
(e) On a date (the "Confirmation Date") that is no later than
ten business days after the Pricing Date (as defined in the
Prospectus), the Agent shall send a confirmation to each
Rightholder (or, for shares of Common Stock on the Record Date
held by Cede & Co. or any other depository or nominee, to Cede
& Co. or such other depository or nominee), showing (i) the
number of shares acquired pursuant to the Basic Subscription
Rights, (ii) the number of shares, if any, acquired pursuant
to the Oversubscription Rights, (iii) the per share and total
purchase price for the shares, (iv) any amount payable to the
Rightholder pursuant to Section 8 below, and (v) any
additional amount payable by the Rightholder to the Fund or
any excess to be refunded by the Fund to the Rightholder, on
the Pricing Date. Any additional payment required from a
Rightholder must be received by the Agent within ten business
days after the Confirmation Date. Any excess payment to be
refunded by the Fund to a Rightholder shall be mailed by the
Agent to the Rightholder as provided in Section 6 below.
4. If, after allocation of shares of Common Capital Stock to persons
exercising Basic Subscription Rights, there remain unexercised Rights,
then the Agent shall allot the shares issuable upon exercise of such
unexercised Rights (the "Remaining Shares") to persons exercising
Oversubscription Rights, in the amounts of such oversubscriptions. If
the number of shares for which Oversubscription Rights have been
exercised is greater than the Remaining Shares, the Agent shall allot
the available Shares first among the Rightholders who subscribe for an
aggregate of 1,000 or fewer Shares (inclusive of such Shares subscribed
for under such Rightholders' Basic Subscription Rights). The Agent
shall allot the Shares remaining thereafter among those Rightholders
who over-subscribed based on the number of Rights originally exercised
by them under their Basic Subscription Rights.
3
5. All proceeds from the exercise of Rights shall be held by the Agent in
a segregated, interest-bearing account in the name of the Fund. The
Agent shall advise the Fund immediately upon the completion of the
allocation set forth above as to the total number of shares subscribed
and distributable.
6. (a) The Agent shall mail to the Rightholders as soon as
practicable after the Confirmation Date and after full
payment for the shares subscribed for has cleared: (i)
certificates representing those shares purchased pursuant to
exercise of Basic Subscription Rights and those shares
purchased pursuant to the exercise of Oversubscription Rights;
and (ii) in the case of each Rightholder who subscribed and
paid for shares at an estimated Subscription Price greater
than the actual Subscription Price, a refund in the amount of
the difference between the estimated Subscription Price and
the actual Subscription Price.
(b) The Agent shall deliver the proceeds of the exercise of
Rights to the Fund as promptly as practicable, but in no event
later than five business days after the Confirmation Date.
Notwithstanding the preceding, if the price per share of the
subscription offer is greater than the estimated price per
share of the subscription offer and the Rightholders owe
additional proceeds to the Fund, the Agent shall deliver such
additional proceeds as promptly as practicable, but in no
event later than 20 business days after the Confirmation Date.
7. The Agent shall account promptly to the Fund with respect to Rights
exercised and concurrently account for all monies received and returned
by the Agent with respect to the purchase of shares of Common Stock
upon the exercise of Rights.
8. In the event the Agent does not receive, within ten business days after
the Confirmation Date, any amount due from a Rightholder as specified
in Section 3 (e), then it shall take such action with respect to such
Rightholder's Rights as may be instructed in writing by the Fund,
including without limitation (i) applying any payment actually received
by it toward the purchase of the greatest whole number of shares of
Common Stock which could be acquired with such payment, (ii) allocating
the shares subject to such Subscription Rights to one or more other
Rightholders, and (iii) selling all or a portion of the shares of
Common Stock deliverable upon exercise of such Rights on the open
market, and applying the proceeds thereof to the amount owed.
9. No Subscription Certificate shall entitle a Rightholder 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 Rightholder any of the
rights of a shareholder of the Fund or any right to vote, give or
withhold consent to any action by the Fund (whether upon any
recapitalization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of
meetings of other action affecting shareholders or receive dividends or
otherwise, until the Rights evidenced thereby shall have been exercised
and the shares of Common Capital Stock purchasable upon the exercise
thereof shall have become deliverable as provided in this Agreement and
in the Prospectus.
4
10. (a) The Fund covenants that all shares of Common Stock issued
on exercise of Rights will be validly issued, fully paid,
non-assessable and free of preemptive rights.
(b) Upon request, the Fund shall furnish to the Agent an
opinion of counsel or other evidence satisfactory to the Agent
to the effect that a registration statement is then in effect
with respect to its shares of Common Stock issuable upon
exercise of the Rights set forth in the Subscription Rights.
Upon written advice to the Agent that the Securities and
Exchange Commission shall have issued or threatened to have
issued any order preventing or suspending the use of the
Prospectus, or if for any reason it shall be necessary to
amend or supplement the Prospectus in order to comply with the
Act, the Agent shall cease acting hereunder until receipt of
written instructions from the Fund and such assurances as it
may reasonably request that it may comply with such
instruction without violations of the Act.
11. (a) Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to the corporate trust business of
the Agent, shall be the successor to the Agent hereunder
without the execution or filing of any document by any of the
parties hereto, provided that such corporation would be
eligible for appointment as a successor to the 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 elivered,
any such successor to the Agent may adopt the countersignature
of the Agent and deliver such Subscription Certificates as
countersigned, and in case at that time any of the
Subscription Certificates shall not have been countersigned,
the successor to the Agent may countersign such Subscription
Certificates either in the name of the Agent or in the name
of the successor Agent, and in all such cases such
Subscription Certificates shall have the full force and legal
effect provided in the Subscription Certificates and in this
Agreement.
(b) If, at any time, the name of the Agent shall be changed
and at such time any of the Subscription Certificates shall
have been countersigned but not delivered, the Agent may adopt
the countersignature under its prior name and deliver
Subscription Certificates so countersigned, and in case at
that time any of the Subscription Certificates shall not have
been countersigned, the Agent may countersign 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 in this Agreement.
12. The Fund agrees to pay to the Agent at the completion of the offering,
on demand of the Agent, reasonable compensation for all services
rendered by it hereunder and also
5
its reasonable out-of-pocket expenses and other disbursements incurred
in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder.
13. The Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions:
(a) Whenever in the performance of its duties under this
Agreement the Agent shall deem it necessary or desirable that
any fact or matter be proved or established, prior to taking
or suffering any action hereunder, such fact or matter (unless
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the
Board or President or a Vice President or the Secretary or
Assistant Secretary or the Treasurer of the Fund delivered to
the Agent, and such certificate shall be full authorization to
the Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(b) The Agent shall not be responsible for and the Fund shall
indemnify and hold the Agent harmless from and against, any
and all losses, damages, costs, charges, counsel feels,
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 or willful misconduct.
(c) The Agent shall be liable hereunder only for its own
negligence or misconduct, and for the negligence or misconduct
of its agents or subcontractors.
(d) Nothing herein shall preclude the Agent from acting in any
other capacity for the Fund or for any other legal entity;
(e) The Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any officer or assistant officer of the Fund
and to apply to any such officer or assistant officer of the
Fund for advice or instructions in connection with its duties,
and shall be indemnified and not be liable for any action
taken or suffered by it in good faith in accordance with
instructions of any officer or assistant officer of the Fund;
and
(f) 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.
6
14. The Agent may, without the consent or concurrence of the Rightholders
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
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 or the Prospectus
except insofar as any such change may confer additional rights upon the
Rightholders.
15. All the covenants and provisions of this Agreement by or for the
benefit of the Fund or the Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
16. The validity, interpretation and performance of this Agreement shall be
governed by the law of the Commonwealth of Massachusetts.
STATE STREET BANK AND NEW AMERICA HIGH INCOME
TRUST COMPANY FUND
/s/Xxxxxx Xxxxx /s/Xxxxx X. Xxxxx
-------------------------------------- -------------------------------
Signature Signature
Vice President Vice President
-------------------------------------- -------------------------------
Title Title
7
