Exhibit (k.1)
STOCK TRANSFER AGENCY AGREEMENT
THIS AGREEMENT entered into as of this 15th day of
October, 1999 by and between LCM Internet Growth Fund,
Inc., a Maryland corporation (the "Company") and
Firstar Bank Milwaukee, N.A., a national banking
corporation (the "Agent").
WHEREAS, the Company desires to appoint the Agent
as its registrar, transfer agent, dividend disbursing
agent and agent in connection with certain other
activities; and
WHEREAS, the Agent desires to act in said
capacities.
NOW, THEREFORE, in consideration of the mutual
covenants of the parties made herein and the payments
herein provided for, the parties hereby agree as
follows:
1. Appointment. The Company hereby appoints the
Agent to serve as registrar, transfer agent for the
Company's authorized and issued shares of common stock,
$0.01 par value (the "Shares"), dividend disbursing
agent and agent in connection with the Company's
distribution reinvestment plan (the "Plan") as
described in the Company's prospectus (which is
included in its Registration Statement on Form N-2 as
filed with the Securities and Exchange Commission (the
"SEC")). The Agent hereby accepts said appointment and
agrees to perform its duties in accordance with the
provisions of this Agreement.
2. Term; Amendment. The Agent's appointment shall
take effect as of the date hereof and, unless sooner
terminated as provided herein, shall continue
automatically in effect for successive annual periods.
This Agreement may be terminated by either party upon
90 days written notice to the other. This Agreement
may be amended only by the mutual written consent of
the parties.
3. Duties of the Agent. The Agent hereby agrees to
perform the following services:
(a) In accordance with procedures established from
time to time by agreement between the Company and the
Agent, the Agent shall:
(i) receive for acceptance orders for the purchase of
Shares and promptly deliver payment and appropriate
documentation thereof to the Company's custodian;
(ii) pursuant to purchase orders, issue and record the
appropriate number of Shares and hold such Shares in
the appropriate shareholder account;
(iii) effect transfers of Shares by the registered
owners thereof upon receipt of appropriate
documentation;
(iv) prepare and transmit payments for dividends and
distributions declared by the Company;
(v) act as agent pursuant to the Plan (a copy of which
is attached hereto as Exhibit A);
(vi) issue replacement certificates for those
certificates alleged to have been lost, stolen or
destroyed upon receipt by the Agent of indemnification
satisfactory to the Agent and protecting the Agent and
the Company and, if requested by the Agent, a surety
bond from the effected shareholder, and the Agent may,
at its option, issue replacement certificates in place
of mutilated certificates upon presentation thereof and
without such indemnity;
(vii) maintain records of account for and advise
the Company and its shareholders as to the foregoing; and
(viii) record the issuance of Shares of the Company
and maintain, pursuant to Rule 17ad-10(e) under the
Securities Exchange Act of 1934, as amended, (the
"Exchange Act"), a record of the total number of Shares
of the Company which are authorized, based upon data
provided to it by the Company, and issued and
outstanding.
(b) In addition to and not in lieu of the services set
forth in the above paragraph (a), the Agent shall:
(i) perform the customary services of registrar,
transfer agent, dividend disbursing agent and agent for
the Plan, including, but not limited to: maintaining
all shareholder accounts, preparing shareholder meeting
lists, mailing shareholder reports and prospectuses to
current shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and
filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends
and distributions by federal authorities for all
shareholders, preparing and mailing confirmation forms
and statements of account to shareholders for all
purchases of Shares and other confirmable transactions
in shareholder accounts, preparing and mailing activity
statements for shareholders and providing shareholder
account information; and
(ii) provide reports which will enable the Company to
monitor the states in which registered shareholders are
located.
(c) In effecting transfers of Shares by the registered
owners thereof, the Agent may rely upon the Uniform
Commercial Code, the provisions of Chapter 112 of the
Wisconsin Statutes and any other statutes which, in the
opinion of counsel, protect the Agent and the Company
in not requiring complete documentation, in registering
transfers without inquiry into adverse claims, in
delaying registration for the purpose of such inquiry
or in refusing registration where, in its judgment, an
adverse claim necessitates such refusal.
4. Fees and Expenses. The Company agrees to pay the
Agent for the performance of the duties set forth in
this Agreement, the amounts set forth in Exhibit B
attached hereto. Such fees and out-of-pocket expense
identified in Exhibit B may be changed from time to
time subject to mutual agreement between the parties.
The Company agrees to pay all fees and reimburseable
expenses within ten (10) business days following
receipt of the billing notice.
5. Representations and Warranties of the Agent. The
Agent represents and warrants to the Company that:
(a) It is a national bank duly organized and in good
standing under the laws of the State of Wisconsin;
(b) It is duly qualified to carry on its business in
the State of Wisconsin;
(c) It is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and
perform this Agreement;
(d) All requisite corporate proceedings have been
taken to authorize it to enter into and perform this
Agreement;
(e) It has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement;
(f) It is a registered transfer agent under the
Exchange Act;
(g) It will comply with all applicable requirements of
the Securities Act of 1933, as amended (the "Securities
Act"), the Exchange Act, the Investment Company Act of
1940, as amended (the "Investment Company Act"), and
any laws, rules and regulations of governmental
authorities having jurisdiction; and
(h) It does not anticipate that the "Year 200 Problem"
will have a material impact on its ability to perform
its duties under this Agreement. The "Year 2000
Problem" refers to the inability of computer systems to
properly process and calculate date-related information
and data from and after January 1, 2000.
6. Representations and Warranties of the Company.
The Company represents and warrants to the Agent that:
(a) It is a corporation duly organized and in good
standing under the laws of the State of Maryland;
(b) It is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and
perform this Agreement;
(c) All requisite corporate proceedings have been
taken to authorize it to enter into and perform this
Agreement;
(d) It is a closed-end non-diversified investment
company registered under the Investment Company Act;
(e) A registration statement under the Securities Act
will be made effective and appropriate state securities
law filings will be made with respect to all Shares of
the Fund being offered for sale; and
(f) It shall make all required filings under federal
and state securities laws.
7. Covenants of the Company and the Agent.
(a) The Company shall promptly furnish to the Agent the following:
(i) a certified copy of the resolution of the Board of
Directors of the Company authorizing the appointment of
the Agent and the execution and delivery of this
Agreement;
(ii) a copy of the Company's Articles of Incorporation
and By-Laws, and all amendments thereto;
(iii) specimen signatures of all officers of the
Company authorized to sign stock certificates;
(iv) a certificate of the Company's Secretary as to the
number of Shares authorized, issued and outstanding; and
(v) specimens of all forms of certificates for Shares,
certified by the Company's Secretary.
(b) The Agent agrees to establish and maintain
facilities and procedures reasonably acceptable to the
Company for the safekeeping of stock certificates,
check forms and facsimile imprinting devices, if any;
and for the preparation or use, and for keeping account
of, such certificates, forms and devices.
(c) The Agent shall keep records relating to the
services to be performed hereunder, in the form and
manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act,
and the rules thereunder, the Agent agrees that all
such records prepared or maintained by the Agent
relating to the services to be performed by the Agent
hereunder are the property of the Company and will be
preserved, maintained and made available in accordance
with such section and rules, and will be surrendered
promptly to the Company on and in accordance with its
request.
(d) The Agent and the Company agree that all books,
records, information and data pertaining to the
business of the other party which are exchanged or
received pursuant to the negotiation or the carrying
out of this Agreement shall remain confidential, and
shall not be voluntarily disclosed to any other person,
except as may be required by law.
(e) In case of any requests or demands for the
inspection of the shareholder records of the Company,
the Agent will endeavor to notify the Company and to
secure instructions from an authorized officer of the
Company as to such inspection. The Agent reserves the
right, however, to exhibit the shareholder records to
any person whenever it is advised by its counsel that
it may be held liable for the failure to exhibit the
shareholder records to such person.
8. Performance of Services; Limitation of Liability.
(a) The Agent shall exercise reasonable care
in the performance of its duties under this
Agreement. The Agent shall not be liable for any
error of judgment or mistake of law or for any
loss suffered by the Company in connection with
matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the
failure of communication or power supplies beyond
the Agent's control, except a loss resulting from
the Agent's refusal or failure to comply with the
terms of this Agreement or from
bad faith, negligence or willful misconduct on its
part in the performance of its duties under this
Agreement. Notwithstanding any other provision of
this Agreement, the Company shall indemnify and
hold harmless the Agent from and against any and
all claims, demands, losses, expenses and
liabilities (whether with or without basis in fact
or law) of any and every nature (including
reasonable attorneys' fees) which the Agent may
sustain or incur or which may be asserted against
the Agent by any person arising out of any action
taken or omitted to be taken by it in performing
the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to the Agent
by any duly authorized officer of the Company,
such duly authorized officer to be included in a
list of authorized officers furnished to the Agent
and as amended from time to time in writing by
resolution of the Board of Directors of the
Company.
(b) The Agent shall indemnify and hold the
Company harmless from and against any and all
claims, demands, losses, expenses and liabilities
(whether with or without basis in fact or law) of
any and every nature (including reasonable
attorneys' fees) which the Company may sustain or
incur or which may be asserted against the Company
by any person arising out of any action taken or
omitted to be taken by the Agent as a result of
the Agent's refusal or failure to comply with the
terms of this Agreement, its bad faith, negligence
or willful misconduct.
(c) In the event of a mechanical breakdown
or failure of communication or power supplies
beyond its control, the Agent shall take all
reasonable steps to minimize service interruptions
for any period that such interruption continues
beyond the Agent's control. The Agent will make
every reasonable effort to restore any lost or
damaged data and correct any errors resulting from
such a breakdown at the expense of the Agent. The
Agent agrees that it shall, at all times, have
reasonable contingency plans with appropriate
parties, making reasonable provision for emergency
use of electrical data processing equipment to the
extent appropriate equipment is available.
Representatives of the Company shall be entitled
to inspect the Agent's premises and operating
capabilities at any time during regular business
hours of the Agent, upon reasonable notice to the
Agent.
(d) Regardless of the above, the Agent
reserves the right to reprocess and correct
administrative errors at its own expense.
(e) In order that the indemnification
provisions contained in this section shall apply,
it is understood that if in any case the
indemnitor may be asked to indemnify or hold the
indemnitee harmless, the indemnitor shall be fully
and promptly advised of all pertinent facts
concerning the situation in question, and it is
further understood that the indemnitee will use
all reasonable care to notify the indemnitor
promptly concerning any situation which presents
or appears likely to present the probability of a
claim for indemnification. The indemnitor shall
have the option to defend the indemnitee against
any claim which may be the subject of this
indemnification. In the event that the indemnitor
so elects, it will so notify the indemnitee and
thereupon the indemnitor shall take over complete
defense of the claim, and the indemnitee shall in
such situation initiate no further legal or other
expenses for which it shall seek indemnification
under this section. The indemnitee shall in no
case confess any claim or make any compromise
in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the
indemnitor's prior written consent.
9. Notices. Notices of any kind to be given by
either party to the other party shall be in writing and
shall be duly given if mailed or otherwise delivered as
follows:
Notice to the Agent, to:
Ms. Xxxxxxx Xxxxxx
Firstar Bank Milwaukee, N.A.
Corporate Trust Department
0000 Xxxxx XxxxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Tele: 000-000-0000
Fax: 000-000-0000
Notice to the Company, to:
Xx. Xxxxx X. Xxxxxxx
LCM Internet Growth Fund, Inc.
000 Xxxx Xxxxxxxxxx Xxxx.
Xxxxxxx, Xxxxxxxx 00000
Tele: 000-000-0000
Fax: 000-000-0000
10. Duties in the Event of Termination. In the event
that, in connection with termination, a successor to
any of the Agent's duties or responsibilities hereunder
is designated by the Company by written notice to the
Agent, the Agent will promptly, upon such termination
and at the expense of the Company, transfer to such
successor all relevant books, records, correspondence
and other data established or maintained by the Agent
under this Agreement in a form reasonably acceptable to
the Company (if such form differs from the form in
which the Agent has maintained, the Company shall pay
any expenses associated with transferring the data to
such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for
assistance from the Agent's personnel in the
establishment of books, records and other data by such
successor.
11. Governing Law. This Agreement shall be construed
and the provisions hereof interpreted under and in
accordance with the laws of the State of Wisconsin.
However, nothing herein shall be construed in a manner
inconsistent with the Investment Company Act or any
rule or regulation promulgated by the SEC thereunder.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by a duly authorized
officer on one or more counterparts as of the day and
year first written above.
LCM INTERNET GROWTH FUND, INC. FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ Xxxxxxx X. Xxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxx Xxxxxx
-------------------------- ------------------------------
Its: President Its: Vice President
------------------------- ------------------------------
Attest Attest
By: /s/ Xxxxxxx X. Xxxxxx By:
------------------------- --------------------------------
Exhibit A
TERMS AND CONDITIONS OF
LCM INTERNET GROWTH FUND, INC.
DISTRIBUTION REINVESTMENT PLAN
Holders of shares of common stock of LCM Internet
Growth Fund, Inc. (the "Fund) are advised as follows
with respect to the Fund's Distribution Reinvestment
Plan (the "Plan"):
1. Participation. Each holder of shares of common
stock of the Fund will automatically be deemed to have
elected to be a participant in the Plan, unless Firstar
Bank Milwaukee, N.A. (the "Plan Agent") is otherwise
instructed by such shareholder, in writing, to have all
distributions, net of any applicable withholding tax,
paid in cash. A shareholder who does not wish to
participate in the Plan will receive all distributions,
the record date for which follows the receipt by the
Plan Agent of such shareholder's instructions, in cash
and will be paid by check mailed directly to such
shareholder by the Plan Agent, as dividend-disbursing
agent. The Plan Agent will act as agent for
participants in administering the Plan and will open an
account for each participant under the Plan in the same
name as his or her outstanding shares of common stock
are registered.
2. Distributions.
(a)General. Whenever the directors of the Fund
declare an income dividend or capital gains
distribution payable, at the option of the shareholder,
in shares of common stock or cash, non-participants in
the Plan will receive such distribution in cash and
participants in the Plan will receive such distribution
in shares of common stock to be issued by the Fund or
purchased on the open market by the Plan Agent. Any
such shares so distributed will be held by the Plan
Agent for each participant's account.
(b)Market Premium Issuances. If, on the distribution
payment date or, if that date is not an American Stock
Exchange trading day, the next preceding trading day
(the "Valuation Date"), the market price per share of
common stock equals or exceeds the net asset value per
share on that date, the Fund will issue shares of
common stock to participants valued at net asset value;
provided, however, if the net asset value is less than
95% of the market price on the Valuation Date, then
participants will be issued shares valued at 95% of the
market price.
(c)Market Discount Purchases. If, on the Valuation
Date, the net asset value per share of common stock
exceeds the market price per share on that date, the
Plan Agent, as agent for the participants, will, for a
period of 30 days, buy shares of the Fund's common
stock in the open market, on the
American Stock Exchange or elsewhere, for each participant's
account. If, at the close of business on any day during the
purchase period, the market price exceeds the net asset
value per share, the Plan Agent will cease open market
purchases and the Fund will issue the remaining shares
at a price equal to the greater of net asset value or
95% of the then current market price. In a case where
the Plan Agent has terminated open market purchases and
the Fund has issued the remaining shares, the number of
shares received by each participant in respect of the
distribution will be based on the weighted average of
prices paid for shares purchased in the open market and
the price at which the Fund issues the remaining
shares.
3. Valuation. For purposes of the Plan, the market
price of shares of common stock of the Fund on a
particular date shall be the last sales price on the
American Stock Exchange at the close of the previous
trading day or, if there is no sale on the American
Stock Exchange on that date, then the mean between the
closing bid and asked quotations for such stock on the
American Stock Exchange on such date. The net asset
value per share of common stock on a particular date
shall be as determined by or on behalf of the Fund.
4. Liability of Plan Agent. The Plan Agent shall at
all times act in good faith and agree to use its best
efforts within reasonable limits to ensure the accuracy
of all services performed under this Plan and to comply
with applicable law, but assumes no responsibility and
shall not be liable for loss or damage due to errors
unless such error is caused by the Plan Agent's
negligence, bad faith or willful misconduct or that of
its employees. Each participant's uninvested funds
held by the Plan Agent will not bear interest. The
Plan Agent shall have no liability in connection with
any inability to purchase Fund shares, within the time
provided, or with the timing of any purchases effected.
The Plan Agent shall have no responsibility as to the
value of the shares of common stock acquired for any
participant's account. For the purpose of cash
investments, the Plan Agent may commingle participants'
funds.
5. Recordkeeping.
(a)Stock Certificates. The Plan Agent will hold
shares of common stock acquired pursuant to the Plan in
non-certificated form in the name of each participant
for whom such shares are being held. Upon a
participant's written request, the Plan Agent will
deliver to the participant, without charge, a
certificate or certificates representing all full
shares of common stock held by the Plan Agent pursuant
to the Plan for the benefit of such participant.
Although a participant may from to time have an
undivided fractional interest in a share of common
stock of the Fund, no certificates for fractional
shares will be issued. However, distributions on
fractional shares will be credited to each
participant's account. In the event of termination of
a participant's account under the Plan, the Plan Agent
will adjust for any such undivided fractional interest
in cash at the market value of the shares of common
stock at the time of termination.
(b)Confirmations. The Plan Agent will confirm, in
writing, each acquisition made for the account of a
participant as soon as practicable, but in any event
not later than 60 days after the date thereof.
(c) Stock Dividends or Splits. Any stock dividends or
split shares distributed by the Fund on shares of
common stock held by the Plan Agent for a participant
will be credited to the participant's account.
6. Proxy Materials. The Plan Agent will forward to
each participant any proxy solicitation material
received by it and will vote any shares so held for
each participant first in accordance with the
instructions set forth on the proxies returned by the
participant to the Fund and then with respect to any
proxies not returned by the participant to the Fund in
the same proportion as the Plan Agent votes proxies
returned by participants to the Fund.
7. Fees. The Plan Agent's service fee for handling
the reinvestment of distributions will be paid by the
Fund. Each participant, however, will be charged a pro
rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases in
connection with the reinvestment of distributions.
Brokerage charges for purchasing small amounts of stock
for individual accounts through the Plan are expected
to be less than the usual brokerage charges for such
transactions because the Plan Agent will be purchasing
shares for all participants in blocks and prorating the
lower commission thus attainable. The Plan Agent may
use its affiliates and/or affiliates of the Fund's
investment adviser for all trading activity relative to
the Plan.
8. Termination.
(a)By Participant. A participant may terminate his
or her account under the Plan by notifying the Plan
Agent, in writing, at Firstar Bank Milwaukee, N.A., c/o
LCM Internet Growth Fund, Inc., P. O. Xxx 0000,
Xxxxxxxxx, Xxxxxxxxx 00000-0000. Such termination will
be effective immediately if notice is received by the
Plan Agent prior to the distribution record date;
otherwise, such termination will be effective, with
respect to any subsequent distribution, on the first
trading day after the distribution paid for such record
date shall have been credited to such participant's
account.
(b)By Plan Agent or Fund. The Plan may be terminated
by the Plan Agent or the Fund with respect to any
distributions paid subsequent to written notice of the
termination mailed to participants at least 30 days
before the record date for the payment of any
distribution.
(c)Effect of Termination. Upon any termination, the
Plan Agent will cause a certificate or certificates to
be issued for the full shares held for each participant
under the Plan and cash adjustment for any fractional
shares to be delivered to him or her without charge.
9. Amendment. The terms and conditions of the Plan
may be amended by the Plan Agent or the Fund at any
time or times but, except when necessary or appropriate
to comply with applicable law or the rules or policies
of the Securities and Exchange Commission or any other
regulatory authority, only by mailing to each
participant appropriate written notice at least 30 days
prior to the effective date thereof. The amendment
shall be deemed to be accepted by each participant
unless, prior to the effective date thereof, the Plan
Agent receives written notice of the termination of the
participant's account under the Plan. Any such
amendment may include an appointment by the Plan Agent,
in its place and stead, of a successor Plan Agent under
these terms and conditions, with full power and
authority to perform all or any acts to be performed by
the Plan Agent under these terms and conditions.
10. Applicable Law. These terms and conditions shall
be governed by the laws of the State of Maryland.
Exhibit B
Annual Fee $16.00 per shareholder account
Minimum annual fees of $25,500
Plus reasonable Out-of-Pocket Expenses, including but not limited to:
Telephone - toll-free lines Proxies
Postage Retention of records (with prior approval)
Insurance Microfilm/fiche of records
Programming (with prior approval) Special reports
Stationery/envelopes ACH fees
Mailing
ACH Shareholder Services
$125.00 per month per fund group
$ .50 per account setup and/or change
$ .35 per item for EFT payments and purchases
$3.50 per correction, reversal, return item
Additional Shareholder Fees (Billed to Investors)
Any outgoing wire transfer $12.00 / wire
Return check fee $25.00 / item
Stop payment $20.00 / stop
(liquidation, dividend, draft check)
Research fee $ 5.00 / item
(for requested items of the second calendar year [or previous] to the request)
(cap at $25.00)
