ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of March __,
2004, between Xxxxxx Asset Management, Inc. (the "Investment Advisor") and
Xxxxxx Xxxxxx & Company, Inc. ("Xxxxxx Xxxxxx").
WHEREAS, RMK Strategic Income Fund, Inc. (the "Fund") is a newly organized,
diversified, closed-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), and its common
shares are registered under the Securities Act of 1933, as amended;
WHEREAS, Xxxxxx Xxxxxx is acting as lead underwriter in an offering (the
"Offering") of the Fund's common shares;
WHEREAS, the Investment Advisor desires to provide additional compensation
to Xxxxxx Xxxxxx for acting as lead underwriter in the Offering; and
WHEREAS, the Investment Advisor desires to retain Xxxxxx Xxxxxx to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis, and Xxxxxx Xxxxxx is willing to render such services.
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
SECTION 1.
(a) The Investment Advisor hereby employs Xxxxxx Xxxxxx, for the period
and on the terms and conditions set forth herein, to provide the following
services at the reasonable request of the Investment Advisor: (i) to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis; (ii) to provide relevant information, studies or reports
regarding general trends in the closed-end investment company and asset
management industries, if reasonably obtainable, and consult with
representatives of the Investment Advisor in connection therewith; and (iii) to
provide information to and consult with the Investment Advisor with respect to
applicable strategies designed to address market value discounts, if any.
(b) At the request of the Investment Advisor, Xxxxxx Xxxxxx shall limit or
cease any action or service provided hereunder to the extent and for the time
period requested by the Investment Advisor; provided, however, that pending
termination of this Agreement as provided for in Section 5 hereof, any such
limitation or cessation shall not relieve the Investment Advisor of its payment
obligations pursuant to Section 2 hereof.
(c) Xxxxxx Xxxxxx will promptly notify the Investment Advisor if it learns
of any material inaccuracy or misstatement in, or material omission from, any
written information, as of the date such information was published, provided by
Xxxxxx Xxxxxx to the Investment Advisor in connection with the performance of
services by Xxxxxx Xxxxxx under this Agreement.
SECTION 2. The Investment Advisor shall pay Xxxxxx Xxxxxx a fee payable
quarterly at an annualized rate of 0.10% of the Fund's managed assets (the
"Additional Fee") for a term as described in Section 5 hereof; provided that,
the total amount of the Additional Fee payable by the Investment Advisor
hereunder, plus the amount of any expense reimbursement payable by the
Investment Advisor or the Fund to the Underwriters pursuant to the Underwriting
Agreement (defined below), will not exceed 4.5% of the total price to the public
of the Fund's common shares (including all Primary Shares and Option Shares as
such terms are described in the Underwriting Agreement, dated March [18], 2004
(the "Underwriting Agreement"), by and among the Fund, the Investment Advisor
and each of the Underwriters named therein) offered by the prospectus dated
March [18], 2004. All quarterly fees payable hereunder shall be paid to Xxxxxx
Xxxxxx within 15 days following the end of each calendar quarter.
SECTION 3. The Investment Advisor acknowledges that the services of Xxxxxx
Xxxxxx provided for hereunder do not include any advice as to the value of
securities or regarding the advisability of purchasing or selling any securities
for the Fund's portfolio. No provision of this Agreement shall be considered as
creating, nor shall any provision create, any obligation on the part of Xxxxxx
Xxxxxx, and Xxxxxx Xxxxxx is not hereby agreeing, to: (i) furnish any advice or
make any recommendations regarding the purchase or sale of portfolio securities
or (ii) render any opinions, valuations or recommendations of any kind or to
perform any such similar services in connection with providing the services
described in Section 1 hereof.
SECTION 4. Nothing herein shall be construed as prohibiting Xxxxxx Xxxxxx
or its affiliates from providing similar or other services to any other clients
(including other registered investment companies or other investment managers),
so long as Xxxxxx Xxxxxx'x services to the Investment Advisor are not impaired
thereby.
SECTION 5. The term of this Agreement shall commence upon the date referred
to above and shall be in effect so long as the Investment Advisor acts as the
investment manager to the Fund pursuant to the Investment Advisory Agreement (as
such term is defined in the Underwriting Agreement), by and between the Fund and
the Investment Advisor, or other subsequent advisory agreements.
SECTION 6. The Investment Advisor will furnish Xxxxxx Xxxxxx with such
information as Xxxxxx Xxxxxx reasonably believes appropriate to its assignment
hereunder (all such information so furnished being the "Information"). The
Investment Advisor recognizes and confirms that Xxxxxx Xxxxxx (a) will use and
rely primarily on the Information and on information available from generally
recognized public sources in performing the services contemplated by this
Agreement without having independently verified the same and (b) does not assume
responsibility for the accuracy or completeness of the Information and such
other information. To the best of the Investment Advisor's knowledge, the
Information to be furnished by the Investment Advisor when delivered, will be
true and correct in all material respects and will not contain any material
misstatement of fact or omit to state any material fact necessary to make the
statements contained therein not misleading. The Investment Advisor will
promptly notify Xxxxxx Xxxxxx if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information delivered to Xxxxxx
Xxxxxx.
SECTION 7. It is understood that Xxxxxx Xxxxxx is being engaged hereunder
solely to provide the services described above to the Investment Advisor and
that Xxxxxx Xxxxxx is not acting as an agent or fiduciary of, and shall have no
duties or liability to the current or future shareholders of the Fund or any
other third party in connection with its engagement hereunder, all of which are
hereby expressly waived.
SECTION 8. The Investment Advisor agrees that Xxxxxx Xxxxxx shall have no
liability to the Investment Advisor or the Fund for any act or omission to act
by Xxxxxx Xxxxxx in the course of its performance under this Agreement, in the
absence of gross negligence or willful misconduct on the part of Xxxxxx Xxxxxx.
The Investment Advisor agrees to indemnify and hold harmless Xxxxxx Xxxxxx and
its respective officers, directors, agents and employees against any loss or
expense arising out of or in connection with its performance under this
Agreement not caused by Xxxxxx Xxxxxx'x negligence or willful misconduct.
Notwithstanding the foregoing or anything to the contrary in this Agreement, the
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Investment Advisor's indemnification obligations shall not apply to any losses,
claims, damages, liabilities, fines or expenses (including legal expenses)
arising out of or relating to limitations on or the reasonableness or
characterization of the compensation payable by the Investment Advisor to Xxxxxx
Xxxxxx under this Agreement, including as a result of any violation of
applicable rules of the NASD or other applicable law. This provision shall
survive the termination and expiration of this Agreement.
SECTION 9. This Agreement and any claim, counterclaim or dispute of any
kind or nature whatsoever arising out of or in any way relating to this
Agreement ("Claim") shall be governed by and construed in accordance with the
laws of the State of Tennessee. Each of Xxxxxx Xxxxxx and the Investment Advisor
waives all right to trial by jury in any proceeding (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Investment Advisor agrees that a final judgment in any proceeding
or counterclaim brought in any such court shall be conclusive and binding upon
the Investment Advisor and may be enforced in any other courts to the
jurisdiction of which the Investment Advisor is or may be subject, by suit upon
such judgment.
SECTION 10. This Agreement may not be assigned by either party, without the
prior written consent of the other party.
SECTION 11. All notices permitted or required to be sent under this
Agreement shall be sent, if to the Investment Advisor:
Xxxxxx Asset Management Inc.
000 Xxxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
or if to Xxxxxx Xxxxxx:
Xxxxxx Xxxxxx & Company, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
or such other name or address as may be given in writing to the other parties.
Any notice shall be deemed to be given or received on the third day after
deposit in the US mail with certified postage prepaid or actually received,
whether by hand, express delivery service or facsimile transmission, whichever
is earlier.
SECTION 12. This Agreement may be executed in separate counterparts, each
of which is deemed to be an original and all of which taken together constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
XXXXXX XXXXXX & COMPANY, INC.
By:
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Name:
Title:
XXXXXX ASSET MANAGEMENT, INC.
By:
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Name:
Title
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