EXHIBIT (d)(vii)
SUBSCRIPTION AGENT AGREEMENT
This Subscription Agent Agreement (the "Agreement") is made as of
February __ 1999, between Pacholder Fund, Inc. (the "Company") and BankBoston,
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 Nos. 333-70767; 811-5639) filed by the
Company with the Securities and Exchange Commission on January 19, 1999, as
amended by any amendment filed with respect thereto (the "Registration
Statement").
WHEREAS, the Company proposes to make a subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Company (the "Subscription Certificates"), to shareholders of record (the
"Shareholders") of its Common Stock, par value $.01 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
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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 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 three 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
Rights").
3. Rights and Issuance of Subscription Certificates.
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(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 transfer agent
of the Company and delivered to the Agent, 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 each 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
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held by the Agent for such Foreign Record Date Shareholders' accounts until
instructions are received to exercise the Rights.
4. Exercise.
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(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, together
with (ii) the estimated Subscription Price per Share 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 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 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. 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 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 seven
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 the American Stock Exchange is open for trading and which is not a
Saturday or Sunday or holiday, or any other day on which banks in New York City
are authorized or obligated by law or executive order to close.
(d) The Company will determine the Subscription Price by taking 95% of the
net asset value per share of Common Stock as of the close of business on the
Expiration Date (the "Pricing Date"). Within eight Business Days following 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
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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, 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 seven Business Days after the Confirmation Date and any excess
payment to be refunded by the Company to a Shareholder will be mailed by the
Agent as promptly as practicable. 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 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
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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
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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 the 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 Shareholder 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 Certificates. The Agent will deliver (i) certificates
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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 Over-Subscription Rights as soon as practicable
after the Expiration Date and after all allocations have been effected.
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8. Holding Proceeds of Rights Offering
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(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"). All interest on funds held
in the Account shall accrue to the benefit of the Company pending disbursement
in the manner described in paragraph (b) below and in Section 4(e) above.
(b) The Agent shall deliver all proceeds received in the respect of Rights
to the Company's custodian bank as instructed by an appropriate officer of the
Company, but in no event later than seven Business Days after the Confirmation
Date. Proceeds held in respect of Excess Payments shall belong to the Company.
The Company agrees to deposit sufficient funds in the Account to make any Excess
Payments to be refunded to Shareholders as provided in Section4(e) above.
9. Reports.
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(a) Daily, during the period commencing on February __, 1999, until
termination of the Subscription Period, the Agent will report by telephone or
telecopier (by 2:00 p.m., Eastern time), 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,
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mutilated or destroyed, the Agent may, on such terms which will indemnify and
protect the Company 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
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compensation for its services as such in accordance with its Fee Schedule to act
as Agent, dated February __, 1999 and set forth 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 and Indemnification. The Agent undertakes the duties and
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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
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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.
13. Changes in Subscription Certificate. The Agent may, without the consent or
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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.
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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.
(c) The Agent may, without further consent on the part of the Company, (i)
subcontract for the performance hereof with Boston EquiServe Limited Partnership
or (ii) subcontract with other subcontractors for systems, processing, and
telephone and mailing services 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
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Agreement shall be governed by the law of the Commonwealth of Massachusetts.
16. Third Party Beneficiaries. This Agreement does not constitute an agreement
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for a partnership or joint venture between the Agent and the Company. Neither
party shall make any
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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
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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
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the other party for any consequential, indirect, special or incidental damages
under any provisions of this Agreement or for any consequential, indirect,
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,
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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
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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
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convenience of the parties only. They do not in any way modify, amplify, alter
or give full notice of the provisions hereof.
22. Facsimile Signatures. Any facsimile signature of any party hereto shall
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constitute a legal, valid and binding execution hereof by such party.
23. Confidentiality. The Agent and the Company agree that all books, records,
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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.
24. Term. This Agreement shall remain in effect until terminated on April __,
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1999 (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.
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25. Merger of Agreement. This Agreement constitutes the entire agreement
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between the parties hereto and supersedes 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.
BANKBOSTON, N.A. PACHOLDER FUND, INC.
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Signature Signature
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Title Title
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BANKBOSTON, N.A.
FEE SCHEDULE
to serve
PACHOLDER FUND, INC.
as
SUBSCRIPTION AGENT
This Fee Schedule sets forth the fees for the services to be performed under the
Subscription Agent Agreement between BankBoston, N.A. and Pacholder Fund, Inc.
February __, 1999.
A. FEES FOR SERVICES
For the services set forth in the Subscription Agent Agreement February __,
1999, Pacholder Fund, Inc. will be charged as follows:
$ 7,500.00 Project Management Fee*
$ 2.00 Per Subscription Certificate issued and mailed
$ 9.00 Per subscription processed registered and beneficial
$ 12.50 Per defective Subscription Certificate received and processed
$ 15.00 Per Notice of Guaranteed Delivery received
$ 1.75 Per refund check issued and mailed
$ 4.50 Per invoice mailed
$ 2.25 Subsequent cash management
$ 2.00 Per broker split certificate issued
$ 15.00 Per withdrawal of Subscription Certificate, if applicable
$ 1,000.00 New York window fee upon expiration
$ 3,000.00 Per offer extension
*Excludes out-of-pocket expenses as described in Section B, "Items Not Covered"
B. ITEMS NOT COVERED
. Services not specified in the Subscription Agent Agreement February __,
1999, including any services associated with new duties, legislation or
regulatory fiat which become effective after the date of the Subscription
Agent Agreement (these will be provided on an appraisal basis)
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. 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)
. Reasonable legal review fees if referred to outside counsel; provided
that BankBoston, N.A. shall notify Pacholder Fund, Inc. in writing of its
intention to use outside counsel
. Overtime charges assessed in the event of late delivery of material for
mailings unless the target mail date is rescheduled
C. LIMITATIONS
. Schedule based upon document review and information known at this time
about the transaction
. Significant changes made in the terms or requirements of this transaction
could require modifications to this Schedule
. Schedule based upon approximately ______ shareholders of record
. Material to be mailed to shareholders must be received no less than five
(5) Business Days prior to the start of the mailing project
D. PAYMENT FOR SERVICES
It is agreed that an invoice for the Project Management Fee will be rendered
and payable on the effective date of the transaction. An invoice for any
out-of-pockets 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.
In witness whereof, the parties hereto have caused this Fee Schedule to be
executed by their respective officers, hereunto duly agreed and authorized,
as of the effective date of this Fee Schedule.
BANKBOSTON, N.A. PACHOLDER FUND, INC.
By: By:
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Xxxx X. Xxxxx
Title: Vice President Title:
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Date: Date:
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