FORM OF SUBSCRIPTION AGENT AGREEMENT (Company)
This Subscription Agent Agreement (the "Agreement") is made as of
August 2, 2001 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") with respect to the (Registration Statement on Form N-2
(File No.) filed by the Company with the Securities and Exchange Commission
on _June 27, 2001, 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 holders of record (the
"Shareholders") of its Common Stock, par value $0.10 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 12a), 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 _1_ share of Common Stock recorded on
the books in the name of each such Shareholder as of the Record Date. The number
of Rights that are issued to Record Date Shareholders will be rounded down, by
the Agent, to the nearest number of Full Rights as Fractional Rights will not be
issued. Each Subscription Certificate shall be dated as of the Record Date and
shall be executed manually or by facsimile signature of a duly authorized
officer of the Subscription Agent. Upon the written advice, signed as aforesaid,
as to the effective date of the Registration Statement, the Agent shall promptly
countersign and deliver the Subscription Certificates, together with a copy of
the Prospectus, instruction letter and any other document as the Company deems
necessary or appropriate, to all Shareholders with record addresses in the
United States (including its territories and possessions and the District of
Columbia). Delivery shall be by first class mail (without registration or
insurance), except for those Shareholders having a registered address outside
the United States (who will only receive copies of the Prospectus, instruction
letter and other documents as the Company deems necessary or appropriate, if
any), delivery shall be by air mail (without registration or insurance) and by
first class mail (without registration or insurance) to those Shareholders
having APO or FPO addresses. No Subscription Certificate shall be valid for any
purpose unless so executed.
(c) The Agent will mail a copy of the Prospectus, instruction letter, a
special notice and other documents as the Company deems necessary or
appropriate, if any, but not Subscription Certificates to Record Date
Shareholders whose record addresses are outside the United States (including its
territories and possessions and the District of Columbia ) ("Foreign Record Date
Shareholders"). The Rights to which such Subscription Certificates relate will
be held by the Agent for such Foreign Record Date Shareholders' accounts until
instructions are received to exercise the Rights.
4. Exercise.
(a) Record Date Shareholders may acquire shares of Common Stock on Primary
Subscription and pursuant to the Over-Subscription Privilege by delivery to the
Agent as specified in the Prospectus of (i) the Subscription Certificate with
respect thereto, duly executed by such Shareholder in accordance with and as
provided by the terms and conditions of the Subscription Certificate, 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 on 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 Common Stock by the Agent within three Business Days (as
defined below) after the Expiration Date (the "Protect Period") and full payment
for their Common Stock within ten Business Days after the Confirmation Date (as
defined in Section 4(d)). For the purposes of the Prospectus and this Agreement,
"Business Day" shall mean any day on which trading is conducted on the New York
Stock Exchange.
(d) The Company will determine the Subscription Price by taking _95_% of
the lower if (I) the last reported sale prices of shares of Common Stock on the
New York Stock Exchange on the First Business Day following the Expiration Date
(the "Pricing Date") or (II) 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 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 ten 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 within ten Business Days after the Confirmation Date. If a shareholder
does not make timely payment of any additional amounts due in accordance with
Section 4(d), 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 specific instructions herein shall be submitted to an appropriate officer of
the Company and handled in accordance with his or her instructions. Such
instructions will be documented by the Agent indicating the instructing officer
and the date thereof.
6. Over-Subscription. If, after allocation of shares of Common Stock to
Record Date Shareholders, there remain unexercised Rights, then the Agent shall
allot the shares issuable upon exercise of such unexercised Rights (the
"Remaining Shares") to shareholders who have exercised all the Rights initially
issued to them and who wish to acquire more than the number of shares for which
the Rights issued to them are exercisable. Shares subscribed for pursuant to the
Over-Subscription Privilege will be allocated in the amounts of such
over-subscriptions. If the number of shares for which the Over-Subscription
Privilege has been exercised is greater than the Remaining Shares, the Agent
shall allocate the Remaining Shares to Record Date Shareholders exercising
Over-Subscription Privilege based on the number of 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
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
(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 Fed Funds Rate to the Company on funds held in the Account 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 Company as promptly as practicable, but in no event
later than ten business days after the Confirmation Date.
9. Reports.
(a) Daily, during the period commencing on August 10, 2001, until
termination of the Subscription Period, the Agent will report by telephone
or telecopier, confirmed by letter, to an Officer (as defined in
paragraph 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 reasonable 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 as such in accordance with its Fee Schedule to act
as Agent, dated August 2, 2001 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 hereunder.
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 (President,
Vice-President, Secretary, Assistant Secretary or Treasurer) of the Company,
whether in conformity with the provisions of this Agreement or
constituting a modification hereof or a supplement hereto. Without limiting
the generality of the foregoing or any other provision of this Agreement, the
Agent, in connection with its duties hereunder, shall not be under any duty or
obligation to inquire into the validity or invalidity or authority or
lack thereof of any instruction or direction from an officer of the Company
which conforms to the applicable requirements of this Agreement and which
the Agent reasonably believes to be genuine and shall not be
liable for any delays, errors or loss of data occurring by reason of
circumstances beyond the Agent's control.
(b) The Company will indemnify the Agent and hold it harmless from, all
liability and expense which arise out of or are attributable to 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.
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 prior written consent of the other party.
(b) All the convenants and provisions of 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, 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
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 liabile for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes. Performance under this Agreement shall resume when
the affected party or parties are able to perform substantially that party's
duties.
18. Consequential Damages. Neither party to this Agreement shall be liable
to the other party for any consequential, indirect, special or incidental
damages under any provisions of this Agreement or for any consequential,
indirect, special or incidential damages arising out of any act or failure to
act hereunder even if that party has been advised of or has foreseen the
possibility of such damages.
19. Severability. If any provision of this Agreement shall be held invalid,
unlawful, or unenforceable, the valididty, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
21. Captions. The captions and descriptive headings herein are for the
convenience of the parties only. They do not in any way modify, amplify, alter
or give full notice of the provisions hereof.
22. Confidentiality. The Agent and the Company agree that all books,
records, informtion and data pertaining to the business of the other party which
are exchanged or received pursuant to the negotiation or the 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. The Agent shall not
disclose or use any nonpublic personal 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, including use under ss.248.14 (the processing
and servicing exception) or ss.248.15 (the miscellaneous exception) of
Regulation S-P in the ordinary course of business to carry out those purposes.
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
products or services under this Agreement. The obligations contained in this
paragraph shall survive the termination of this Agreement.
23. Term. This Agreement shall remain in effect until terminated
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. 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, N.A. LIBERTY ALL-STAR GROWTH FUND, INC.
______________________________________ _______________________________
Signature Signature
______________________________________ _______________________________
Title Title
______________________________________ _______________________________
Date Date
[LOGO] EQUISERVE
EQUISERVE TRUST COMPANY, N.A.
PROPOSAL
to serve as
SUBSCRIPTION AGENT FOR
LIBERTY ALL-STAR GROWTH FUND'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)
$ 1,500.00 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
. Designating an operational team to carry out Subscription
Agent duties, including document review and execution of
legal agreement, review of subscription form and
communication materials, project management, and on-going
project updates and reporting
. Calculating Rights to be distributed to each shareholder
and printing shareholder information on the subscription
form
. Issuing and mailing subscription forms to registered
shareholders
Tracking and reporting the number of exercises made,
as required
. Processing Rights received and exercised
. Deposit participant checks daily and forward all
participant funds to Liberty All-Star Growth Fund, Inc.
at the end of the offering period
. Providing receipt summation of checks received
. Affixing legends to appropriate stock certificates, where
applicable
. Issuing and mailing stock certificates and/or checks
. Interfacing with the Information Agent
. Calculating, issuing and mailing of proration and/or
over-subscription checks if applicable
. Calculating, issuing, mailing and collection of invoices
if applicable
. Calculating, issuing and mailing of solicitation checks
if applicable
C. ITEMS NOT COVERED
. 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)
. 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
. Overtime charges assessed in the event of late delivery
of material for mailings unless the target mail date is
rescheduled
D. ASSUMPTIONS
. Proposal 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
proposal
. Proposal must be executed prior to the initial mailing
. Company responsible for printing of materials (Rights Card,
Prospectus and ancillary documents)
. Material to be mailed to shareholders must be received no
less than five (5) business days prior to the start of the
mailing project
. Interest shall accrue to the company at 85% of the Federal
Funds Rate
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-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, provided, however, that the Agent shall provide five (5)
business days notice of any just amount to be paid.
EquiServe Trust Company, N.A. Liberty All-Star Growth Fund, Inc.
By: --------------------- By:----------------------------
Name Name
Title:------------------- Title:-------------------------
Date:-------------------- Date:--------------------------
