Transfer Agency and Service Agreement
Among
RMK Strategic Income Fund, Inc.
and
EquiServe Trust Company, N.A.
and
EquiServe, Inc.
1
Table of Contents
Section 1. Certain Definitions............................................3
Section 2. Appointment of Agent...........................................4
Section 3. Standard Services..............................................5
Section 4. Dividend Disbursing Services...................................7
Section 5. Optional Services..............................................8
Section 6 Fee and Expenses...............................................8
Section 7. Representations and Warranties of Transfer Agent...............9
Section 8. Representations and Warranties of Customer.....................10
Section 9. Indemnification/Limitation of Liability........................11
Section 10. Damages........................................................13
Section 11. Responsibilites of the Transfer Agent..........................13
Section 12. Covenants of the Customer and Transfer Agent...................14
Section 13. Data Access and Propreitary Information........................15
Section 14. Confidentiality................................................17
Section 15. Term and Terminiation..........................................18
Section 16. Assignment.....................................................19
Section 17. Unaffiliated Third Parties.....................................19
Section 18. Miscellaneous..................................................20
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AGREEMENT made as of the ____ day of March, 2004, by and among RMK
Strategic Income Fund, Inc., a Maryland corporation, having a principal office
and place of business at Fifty Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000 (the
"Customer"), and EquiServe, Inc., a Delaware corporation, and its fully owned
subsidiary EquiServe Trust Company, N.A., a federally charted trust company
doing business at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (collectively,
the "Transfer Agent" or individually "EQI" and the "Trust Company",
respectively).
WHEREAS, the Customer desires to appoint the Transfer Agent as sole
transfer agent, registrar, and administrator of its dividend reinvestment plan
and EQI as dividend disbursing agent and processor of all payments received or
made by Customer under this Agreement.
WHEREAS, the Trust Company and EQI desire to accept such respective
appointments and perform the services related to such appointments;
WHEREAS, the Board of Directors of the Customer has approved appointment
of the Transfer Agent.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. CERTAIN DEFINITIONS.
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(a) "ACCOUNT" or "ACCOUNTS" shall mean the account of each Shareholder which
account shall hold any full or fractional shares of stock held by such
Shareholder and/or outstanding funds or tax reporting to be done.
(b) "ADDITIONAL SERVICES" shall mean any and all services which are not
Services as set forth in the Fee and Service Schedule, but performed by Transfer
Agent upon request of Customer.
(c) "AGREEMENT" shall mean this agreement and any and all exhibits or
schedules attached hereto and any and all amendments or modifications, which may
from time to time be executed.
(d) "ANNUAL PERIOD" shall mean each twelve (12) month period commencing on the
Effective Date and, thereafter, on each anniversary of the Effective Date.
(e) "CLOSED ACCOUNT" shall mean an account with a zero share balance, no
outstanding funds or no reportable tax information.
(f) "CUSTOMER ID(s)" shall have the meaning set forth in SECTION 13.3.
(g) "DATA ACCESS SERVICE" shall have the meaning set forth in SECTION 13.1.
(h) "DIVIDEND REINVESTMENT PLAN" or "PLAN" shall mean the services as set
forth in SECTION 4 and in the Fee and Service Schedule.
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(i) "EFFECTIVE DATE" shall mean the date first stated above.
(j) "FEE AND SERVICE SCHEDULE" shall mean the fees and services set forth in
the "Fee and Service Schedule" attached hereto.
(k) "PASSWORD(S)" shall have the meaning set forth in SECTION 13.3.
(l) "PROPRIETARY INFORMATION" shall have the meaning set forth in SECTION
13.3.
(m) "SECURITY PROCEDURES" shall have the meaning set forth in SECTION 5.1.
(n) "SERVICES" shall mean any and all services as further described herein and
in the "Fee and Service Schedule" or other schedules attached hereto.
(o) "SHARE" shall mean Customer's common stock, par value $0.0001 per share
and Customer's preferred stock, par value $0.0001 per share authorized by the
Customer's Articles of Incorporation, and other classes of Customer's stock to
be designated by the Customer in writing and for which the Transfer Agent agrees
to service under this Agreement.
(p) "SHAREHOLDER" shall mean the holder of record of Shares.
(q) "SHAREHOLDER DATA" shall have the meaning set forth in SECTION 13.2.
2. APPOINTMENT OF AGENT.
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2.1 APPOINTMENTS. The Customer hereby appoints the Transfer Agent to act
as sole transfer agent and registrar for all Shares in accordance with the terms
and conditions hereof and as administrator of the Dividend Reinvestment Plan and
appoints EQI as dividend disbursing agent and processor of all payments received
or made by or on behalf of the Customer under this Agreement, and the Transfer
Agent and EQI accept the appointments. Customer shall provide Transfer Agent
with certified copies of resolutions appointing the Trust Company as Transfer
Agent.
2.2 DOCUMENTS. In connection with the appointing of Transfer Agent as the
transfer agent and registrar for the Customer, the Customer will provide or has
previously provided each of the following documents to the Transfer Agent:
(a) Copies of Registration Statements and amendments thereto, filed
with the Securities and Exchange Commission for initial public
offerings;
(b) Specimen of the Signatures of the officers of the Customer
authorized to sign stock certificates (in the event they are
issued) and individuals authorized to sign written instructions
and requests; and
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(c) An opinion of counsel for the Customer addressed to both the
Trust Company and EQI with respect to:
(i) The Customer's organization and existence under the laws of
its state of organization;
(ii) The status of all Shares of the Customer covered by the
appointment under the Securities Act of 1933, as amended,
and any other applicable federal or state statute; and
(iii) That all issued Shares are, and all unissued Shares will
be, when issued, validly issued, fully paid and
non-assessable.
2.3 RECORDS. Transfer Agent may adopt as part of its records, if
applicable, all lists of holders, records of Customer's stock, books, documents
and records which have been employed by any former agent of Customer for the
maintenance of the ledgers for the Customer's shares, provided such ledger is
certified by an officer of Customer or the prior transfer agent to be true,
authentic and complete.
2.4 SHARES. Customer shall, if applicable, inform Transfer Agent as to
(i) the existence or termination of any restrictions on the transfer of Shares
and in the application to or removal from any certificate of stock of any legend
restricting the transfer of such Shares or the substitution for such certificate
of a certificate without such legend, (ii) any authorized but unissued Shares
reserved for specific purposes, (iii) any outstanding Shares which are
exchangeable for Shares and the basis for exchange, (iv) reserved Shares subject
to option and the details of such reservation and (v) special instructions
regarding dividends and information of foreign holders.
2.5 CUSTOMER'S AGENT. Transfer Agent represents that it is engaged in an
independent business and will perform its obligations under this Agreement as an
agent of Customer.
2.6 CERTIFICATES. Customer does not intend to issue certificated shares.
In the event that Customer determines in the future to issue certificated
shares, it shall deliver to Transfer Agent an appropriate supply of stock
certificates, which certificates shall provide a signature panel for use by an
officer of or authorized xxxxxx for Transfer Agent to sign as transfer agent and
registrar, and which shall state that such certificates are only valid after
being countersigned and registered.
3. STANDARD SERVICES.
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3.1 TRANSFER AGENT SERVICES. The Transfer Agent will perform the
following services:
In accordance with the procedures established from time to time by
agreement between the Customer and the Transfer Agent, the Transfer Agent shall:
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(a) issue and record the appropriate number of Shares as authorized
and hold such Shares in the appropriate Shareholder account;
(b) effect transfers of Shares by the registered owners thereof upon
receipt of appropriate documentation;
(c) act as agent for Shareholders pursuant to the Dividend
Reinvestment Plan, and other investment programs as amended from
time to time in accordance with the terms of the agreements
relating thereto to which the Transfer Agent is or will be a
party; and
(d) if applicable, issue replacement certificates for those
certificates alleged to have been lost, stolen or destroyed upon
receipt by the Transfer Agent of an open penalty surety bond
satisfactory to it and holding it and the Customer harmless,
absent notice to the Customer and the Transfer Agent that such
certificates have been acquired by a bona fide purchaser. The
Transfer Agent, at its option, may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof without such indemnity. Further, the
Transfer Agent may at its sole option accept indemnification
from a Customer to issue replacement certificates for those
certificates alleged to have been lost, stolen or destroyed in
lieu of an open penalty bond.
3.2 EQI SERVICES. In accordance with procedures established from time to
time by agreement between the Customer and EQI, EQI shall:
(a) prepare and transmit payments for dividends and distributions
declared by the Customer, provided good funds for said dividends
or distributions are received by EQI prior to the scheduled
payable date for said dividends or distributions;
(b) issue replacement checks and place stop orders on original
checks based on shareholder's representation that a check was
not received or was lost. Such stop orders and replacements will
be deemed to have been made at the request of Customer, and,
subject to Section 9 hereof, Customer shall be responsible for
all losses or claims resulting from such replacement; and
(c) Receive all payments made to the Customer or the Transfer Agent
under the Dividend Reinvestment Plan and make all payments
required to be made under such plan, including all payments
required to be made to the Customer.
3.3 CUSTOMARY SERVICES. The Transfer Agent shall perform all the
customary services of a transfer agent, agent of dividend reinvestment plan,
cash purchase plan and other investment programs as described in SECTION 3.1
consistent with those requirements in effect as of the date of this Agreement.
EQI shall perform all the customary services of a dividend disbursing agent and
a processor of payments as described in SECTION 3.2 consistently with those
requirements in effect as of the date of this Agreement. The detailed services
and definition, frequency, limitations and associated costs (if any) of the
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Services to be performed by the Transfer Agent are set out in the attached Fee
and Service Schedule.
3.4 COMPLIANCE WITH LAWS. The Customer agrees that each of the Trust
Company and EQI is obligated to and the Trust Company and EQI agree to comply
with all applicable federal, state and local laws and regulations, codes, order
and government rules in the performance of its duties under this Agreement.
3.5 UNCLAIMED PROPERTY AND LOST SHAREHOLDERS. The Transfer Agent shall
report unclaimed property to each state in compliance with state law and shall
comply with Section 17Ad-17 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), for lost Shareholders. If the Customer is not in
compliance with applicable state laws, there will be no charge for the first two
years for this service for such Customer, other than a charge of $3.00 per due
diligence notice mailed; provided that after the first two years, the Transfer
Agent will charge such Customer its then standard fee plus any reasonable
out-of-pocket expenses.
3.6 COMPLIANCE WITH OFFICE OF FOREIGN ASSET CONTROL ("OFAC") LAWS AND
REGULATIONS. The Transfer Agent shall ensure compliance with OFAC laws and
regulations.
4. DIVIDEND DISBURSING SERVICES.
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4.1 DECLARATION OF DIVIDENDS. Upon receipt of a written notice from the
President, any Vice President, Secretary, Assistant Secretary, Treasurer or
Assistant Treasurer of Customer declaring the payment of a dividend, EQI shall
disburse such dividend payments provided that in advance of such payment,
Customer furnishes EQI with sufficient funds. The payment of such funds to EQI
for the purpose of being available for the payment of dividend checks from time
to time is not intended by Customer to confer any rights in such funds on
Customer's Shareholders whether in trust or in contract or otherwise.
4.2 STOP PAYMENTS. Customer hereby authorizes EQI to stop payment of
checks issued in payment of dividends, but not presented for payment, when the
payees thereof allege either that they have not received the checks or that such
checks have been mislaid, lost, stolen, destroyed or, through no fault of
theirs, are otherwise beyond their control and cannot be produced by them for
presentation and collection, and EQI shall issue and deliver duplicate checks in
replacement thereof, and, subject to Section 9 hereof, Customer shall indemnify
Transfer Agent against any loss or damage resulting from reissuance of the
checks.
4.3 TAX WITHHOLDING. EQI is hereby authorized to deduct from all
dividends declared by a Customer and disbursed by EQI, as dividend disbursing
agent, the tax required to be withheld pursuant to Sections 1441, 1442 and 3406
of the Internal Revenue Code of 1986, as amended, or by any applicable Federal
or State statutes subsequently enacted, and to make the necessary return and
payment of such tax in connection therewith.
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5. OPTIONAL SERVICES.
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To the extent that the Customer elects to engage the Transfer Agent to provide
the services listed below the Customer shall engage the Transfer Agent to
provide such services upon terms and fees to be agreed upon by the parties:
(a) Corporate actions (including inter alia, odd lot buy backs,
exchanges, mergers, redemptions, subscriptions, capital
reorganization, coordination of post-merger services and special
meetings).
6. FEES AND EXPENSES.
------------------
6.1 FEE AND SERVICE SCHEDULES. The Customer agrees to pay Transfer Agent
the fees for Services performed pursuant to this Agreement as set forth in the
Fee and Service Schedule attached hereto, for the initial term of the Agreement
(the "Initial Term").
6.2 COLA/FEE INCREASES. After the Initial Term of the Agreement,
providing that service mix and volumes remain constant, the fees listed in the
Fee and Service Schedule shall be increased by the accumulated change in the
National Employment Cost Index for Service Producing Industries (Finance,
Insurance, Real Estate) for the preceding years of the contract, as published by
the Bureau of Labor Statistics of the United States Department of Labor. Fees
will be increased on this basis on each successive contract anniversary
thereafter.
6.3 ADJUSTMENTS. Notwithstanding SECTION 7.1 above, fees, and the
out-of-pocket expenses and advances identified under SECTION 7.4 below, may be
changed from time to time as agreed upon in writing between the Transfer Agent
and the Customer.
6.4 OUT-OF-POCKET EXPENSES. In addition to the fees paid under SECTION
7.1 above, the Customer agrees to reimburse the Transfer Agent for reasonable
out-of-pocket expenses, including but not limited to postage, forms, telephone,
microfilm, microfiche, taxes, records storage, exchange and broker fees, or
advances incurred by the Transfer Agent for the items set out in Exhibit A
attached hereto. Out-of-pocket expenses may include the costs to transfer agent
of administrative expenses. In addition, any other expenses incurred by the
Transfer Agent at the request or with the consent of the Customer, will be
reimbursed by the Customer.
6.5 POSTAGE. Postage for mailing of dividends, proxies, Customer reports
and other mailings to all Shareholder Accounts shall be advanced to the Transfer
Agent by the Customer prior to commencement of the mailing date of such
materials.
6.6 INVOICES. The Customer agrees to pay all fees and reimbursable
expenses within 45 days of the receipt of the respective billing notice, except
for any fees or expenses that are subject to good faith dispute. In the event of
such a dispute, the Customer may only withhold that portion of the fee or
expense subject to the good faith dispute. The Customer shall notify the
Transfer Agent within twenty-one (21) calendar days following the receipt of
each billing notice if the Customer is disputing any amounts in good faith. If
the Customer does not provide such notice of dispute within the required time,
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the billing notice will be deemed accepted by the Customer. The Customer shall
settle such disputed amounts within five (5) business days of the day on which
the parties agree on the amount to be paid by payment of the agreed amount. If
no agreement is reached, then such disputed amounts shall be settled as may be
required by law or legal process.
6.7 TAXES. Customer shall pay all sales or use taxes in lieu thereof with
respect to the Services (if applicable) provided by Transfer Agent under this
Agreement.
6.8 LATE PAYMENTS.
(a) If any undisputed amount in an invoice of the Transfer Agent (for fees
or reimbursable expenses) is not paid when due, th e Customer shall pay the
Transfer Agent interest thereon (from the due date to the date of payment) at a
per annum rate equal to one percent (1.0%) plus the Prime Rate (that is, the
base rate on corporate loans posted by large domestic banks) published by The
Wall Street Journal (or, in the event such rate is not so published, a
reasonably equivalent published rate selected by Customer on the first day of
publication during the month when such amount was due). Notwithstanding any
other provision hereof, such interest rate shall be no greater than permitted
under applicable provisions of Massachusetts law.
(b) The failure by Customer to pay an invoice within 90 days after receipt
of such invoice and written notice to customer that payment is overdue or the
failure by the Customer to timely pay three consecutive invoices shall
constitute a material breach pursuant to SECTION 15.4(A) below. The Transfer
Agent may terminate this Agreement for such material breach immediately and
shall not be obligated to provide the Customer with 30 days to cure such breach.
6.9 SERVICES REQUIRED BY LEGISLATION. Services required by legislation or
regulatory mandate that become effective after the Effective Date of this
Agreement shall not be part of the Services, and shall be billed by reasonable
appraisal.
6.11 OVERTIME CHARGES. Overtime charges will be assessed in the event of a
late delivery to the Transfer Agent of Customer material for mailings to
Shareholders, unless the mail date is rescheduled. Such material includes, but
is not limited to, proxy statements, quarterly and annual reports, dividend
enclosures and news releases.
6.12 BANK ACCOUNTS. The Customer acknowledges that the bank accounts
maintained by EQI in connection with the Services will be in its name and that
EQI may receive investment earnings in connection with the investment at EQI's
risk and for its benefit of funds held in those accounts from time to time.
7. REPRESENTATIONS AND WARRANTIES OF TRANSFER AGENT.
-------------------------------------------------
7.1 GOVERNANCE. The Trust Company is a federally chartered limited
purpose national bank duly organized under the laws of the United States and EQI
is a corporation validly existing and in good standing under the laws of the
State of Delaware and each has full corporate power, authority and legal right
to execute, deliver and perform this Agreement. The execution, delivery and
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performance of this Agreement by Transfer Agent has been duly authorized by all
necessary corporate action and constitutes the legal valid and binding
obligation of Transfer Agent enforceable against Transfer Agent in accordance
with its terms.
7.2 Qualifications. The Transfer Agent is duly qualified to carry out
business in the State of New York and with the New York Stock Exchange. The
Trust Company and EQI will maintain their registration as a transfer agent as
provided in Section 17(A)(c) of the Exchange Act and shall comply with all
applicable provisions of Section 17A of the Exchange Act and the rules
promulgated thereunder, as may be amended from time to time, including rules
relating to record retention.
7.3 COMPLIANCE. The execution, delivery and performance of the Agreement
by Transfer Agent will not violate, conflict with or result in the breach of any
material term, condition or provision of, or require the consent of any other
party to, (i) any existing law, ordinance, or governmental rule or regulation to
which Transfer Agent is subject, (ii) any judgement, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority which is applicable to Transfer Agent, (iii) the governing
documents or by-laws of, or any material agreement to which Transfer Agent is a
party.
7.4 FACILITIES. The Transfer Agent has and will continue to have access
to the necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
7.5 COMPUTER SERVICES. DATA ACCESS SERVICE AND ALL COMPUTER PROGRAMS AND
SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS,
AS AVAILABLE BASIS. TRANSFER AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT
THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER
HEREBY ACKNOWLEDGES THAT THE DATA ACCESS SERVICE MAY NOT BE OR BECOME AVAILABLE
DUE TO ANY NUMBER OF FACTORS INCLUDING WITHOUT LIMITATION PERIODIC SYSTEM
MAINTENANCE, SCHEDULED OR UNSCHEDULED, ACTS OF GOD, TECHNICAL FAILURE,
TELECOMMUICATIONS INFRASTRUCTURE OR DELAY OR DISRUPTION ATTRIBUTATLE TO VIRUSES,
DENIAL OF SERVICE ATTACKS, INCREASED OR FLUCTUATING DEMAND, AND ACTIONS AND
OMISSIONS OF THIRD PARTIES. THEREFORE TRANSFER AGENT EXPRESSLY DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTY REGARDING SYSTEM AND/OR DATA ACCESS SERVICE
AVAILABILITY, ACCESSABILITY, OR PERFORMANCE.
8. REPRESENTATIONS AND WARRANTIES OF CUSTOMER.
-------------------------------------------
The Customer represents and warrants to the Transfer Agent that:
8.1 ORGANIZATION. It is a corporation duly organized and existing and in
good standing under the laws of Maryland;
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8.2 GOVERNANCE. It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement. All
corporate proceedings required by said Articles of Incorporation, By-Laws and
applicable law have been taken to authorize it to enter into and perform this
Agreement; and
8.3 SECURITIES ACT OF 1933. A registration statement under the Securities
Act of 1933, as amended (the "1933 Act") has been filed and is currently
effective, or will be effective prior to the sale of any Shares, and will remain
so effective for such period of time as is required, and all required state
securities law filings, if any, have been made with respect to all the Shares of
the Customer being offered for sale except for any Shares which are offered in a
transaction or series of transactions which are exempt from the registration
requirements of the 1933 Act and state securities laws; information to the
contrary will result in immediate notification to the Transfer Agent.
9. INDEMNIFICATION/LIMITATION OF LIABILITY.
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9.1 STANDARD OF CARE. The Transfer Agent shall at all times act in good
faith and agrees to use its best efforts within reasonable time limits to ensure
the accuracy of all services performed under this Agreement, but assumes no
responsibility and shall not be liable for loss or damage due to errors unless
said errors are caused by its negligence, bad faith or willful misconduct or
that of its employees as set forth and subject to the limitations set forth in
SECTION 9.4 below.
9.2 CUSTOMER INDEMNITY. The Transfer Agent shall not be responsible for,
and the Customer shall indemnify and hold the Transfer Agent harmless from and
against, any and all losses, claims, damages, costs, charges, reasonable counsel
fees and expenses, payments, expenses and liability arising out of or
attributable to:
(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement, provided such actions are
taken in good faith and without negligence or willful misconduct;
(b) The Customer's bad faith, negligence or willful misconduct or the
material breach of any representation or warranty of the Customer
hereunder;
(c) The reliance or use by the Transfer Agent or its agents or
subcontractors of information, records and documents which (i) are
received by the Transfer Agent or its agents or subcontractors and
furnished to it by the Customer or the Customer's representatives, and
(ii) have been prepared and /or maintained by the Customer or the
Customer's representatives;
(d) The reliance or use by the Transfer Agent or its agents or
subcontractors of any paper or document reasonably believed to be genuine
and to have been signed by the proper person or persons including
Shareholders;
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(e) The reliance on, or the carrying out by the Transfer Agent or its
agents or subcontractors of any instructions or requests of the Customer's
representatives provided such actions are taken in good faith and without
negligence or willful misconduct;
(f) The offer or sale of Shares in violation of any federal or state
securities laws requiring that such Shares be registered or in violation
of any stop order or other determination or ruling by any federal or state
agency with respect to the offer or sale of such Shares;
(g) The negotiations and processing of all checks, including checks made
payable to prospective or existing shareholders which are tendered to the
Transfer Agent for the purchase of Shares (commonly known as "third party
checks"); and
(h) The negotiation, presentment, delivery or transfer of Shares through
the Direct Registration System Profile System.
9.3 INSTRUCTIONS. At any time the Transfer Agent may apply to any officer
of the Customer for instruction, and may consult with legal counsel for the
Transfer Agent or the Customer with respect to any matter arising in connection
with the services to be performed by the Transfer Agent under this Agreement,
and Transfer Agent and its agents and subcontractors shall not be liable and
shall be indemnified by the Customer for any action taken or omitted by it in
reliance upon such instructions or upon the advice or opinion of such counsel
provided that when the action is taken it is performed in good faith and without
negligence or willful misconduct. The Transfer Agent, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document reasonably believed to be genuine and to have been signed by the proper
person or persons, or upon any instruction, information, data, records or
documents provided the Transfer Agent or its agents or subcontractors by
telephone, in person, machine readable input, telex, CRT data entry or similar
means authorized by the Customer provided such actions are taken in good faith
and without negligence or willful misconduct, and shall not be held to have
notice of any change of authority of any person, until receipt of written notice
thereof from the Customer. The Transfer Agent, its agents and subcontractors
shall also be protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile signatures of
officers of the Customer, and the proper countersignature of any former transfer
agent or former registrar, or of a co-transfer agent or co-registrar.
9.4 TRANSFER AGENT INDEMNIFICATION/LIMITATION OF LIABILITY. Transfer
Agent shall be responsible for and shall indemnify and hold the Customer
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to
Transfer Agent's refusal or failure to comply with the terms of this Agreement,
or which arise out of Transfer Agent's bad faith negligence or willful
misconduct or which arise out of the breach of any representation or warranty of
Transfer Agent hereunder, for which Transfer Agent is not entitled to
indemnification under this Agreement; provided, however, that Transfer Agent's
aggregate liability during any term of this Agreement with respect to, arising
from, or arising in connection with this Agreement, or as a result of any
services provided or omitted to be provided under this Agreement, whether in
contract, or in tort, or otherwise, is limited to, and shall not exceed the
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following amounts; (a) amounts paid hereunder by the Customer to Transfer Agent
as fees and charges, but not including reimbursable expenses, during the
thirty-six (36) calendar months immediately preceding the event for which
recovery from the Transfer Agent is being sought that arises out of the Transfer
Agent's negligence and (b) amounts paid hereunder by the Customer to Transfer
Agent as fees and charges, but not including reimbursable expenses, during the
sixty (60) calendar months immediately preceding the event for which recovery is
being sought that arises out of the Transfer Agent's bad faith, gross negligence
or willful misconduct.
9.5 NOTICE. In order that the indemnification provisions contained in
this Section shall apply, upon the assertion of a claim for which one party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
indemnifying party shall have the option to participate with the indemnified
party in the defense of such claim or to defend against said claim in its own
name or the name of the indemnified party. The indemnified party shall in no
case confess any claim or make any compromise in any case in which the
indemnifying party may be required to indemnify it except with the indemnifying
party's prior written consent.
10. DAMAGES.
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NO PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER, INCLUDING, BUT NOT LIMITED TO,
LOSS OF ANTICIPATED PROFITS, OCCASIONED BY A BREACH OF ANY PROVISION OF THIS
AGREEMENT EVEN IF APPRISED OF THE POSSIBILITY OF SUCH DAMAGES.
11. RESPONSIBILITIES OF THE TRANSFER AGENT.
---------------------------------------
The Transfer Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Customer,
by its acceptance hereof, shall be bound:
11.1 Whenever in the performance of its duties hereunder the Transfer
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 may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Customer and delivered to the Transfer Agent. Such certificate shall be full
authorization to the recipient for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such certificate
provided the action taken is without negligence, bad faith or willful
malfeasance.
11.2 The Customer agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Transfer Agent for the carrying out, or performing by the Transfer Agent
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of the provisions of this Agreement.
11.3 Transfer Agent, any of its affiliates or subsidiaries, and any
stockholder, director, officer or employee of the Transfer Agent may buy, sell
or deal in the securities of the Customer or become pecuniary interested in any
transaction in which the Customer may be interested, or contract with or lend
money to the Customer or otherwise act as fully and freely as though it were not
appointed as agent under this Agreement. Nothing herein shall preclude the
Transfer Agent from acting in any other capacity for the Customer or for any
other legal entity.
11.4 No provision of this Agreement shall require the Transfer Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it shall believe in good faith that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
12. COVENANTS OF THE CUSTOMER AND TRANSFER AGENT.
---------------------------------------------
12.1 CUSTOMER CORPORATE AUTHORITY. The Customer shall furnish to the
Transfer Agent the following:
(a) A copy of the Articles of Incorporation and By-Laws of the
Customer;
(b) Copies of all material amendments to its Articles of
Incorporation or By-Laws made after the date of this Agreement, promptly
after such amendments are made; and
(c) A certificate of the Customer as to the Shares authorized, issued
and outstanding, as well as a description of all reserves of unissued
Shares relating to the exercise of options, warrants or a conversion of
debentures or otherwise.
12.2 TRANSFER AGENT FACILITIES. The Transfer Agent hereby agrees to
establish and maintain facilities and procedures reasonably acceptable to the
Customer for the safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any, and for the preparation, use, and
recordkeeping of such certificates, forms and devices.
12.3 RECORDS. The Transfer 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 consistent with the Exchange Act and the Investment
Company Act of 1940, as amended ("Investment Company Act"). The Transfer Agent
agrees that all such records prepared or maintained by it relating to the
services performed hereunder are the property of the Customer and will be
preserved, maintained and made available in accordance with the requirements of
law, including Section 31 of the Investment Company Act, and will be surrendered
promptly to the Customer on and in accordance with its request.
12.4 CONFIDENTIALITY. The Transfer Agent and the Customer 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 requested by a
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governmental entity or as may be required by law. The foregoing shall not apply
to information which (a) is in the public domain at the time of the disclosure,
(b) prior to disclosure is within the legitimate possession of the other party,
(c) becomes known to the Transfer Agent or Customer from a third party without
restriction, or (d) is approved for release by written authorization of the
other party.
12.5 NON-SOLICITATION OF TRANSFER AGENT EMPLOYEES. Customer shall not
solicit the hiring of or assist with the solicitation to hire an employee of
EquiServe or affiliated companies or encourage any employee to terminate their
relationship with EquiServe or its affiliated companies.
12.6 NOTIFICATION. Customer shall notify Transfer Agent as soon as
possible in advance of any stock split, stock dividend similar event which may
affect the Shares, and any bankruptcy, insolvency, moratorium or other
proceeding regarding Customer affecting the enforcement of creditors' rights.
Notwithstanding any other provision of the Agreement to the contrary, Transfer
Agent will have no obligation to perform any Services under the Agreement
subsequent to the commencement of any voluntary bankruptcy, insolvency,
moratorium or other proceeding regarding Customer affecting the enforcement of
creditor' rights unless Transfer Agent receives assurance reasonably
satisfactory to it that it will receive full payment for such services. Further,
Customer may not assume the Agreement after the filing of a bankruptcy petition
without Transfer Agent's written consent.
13. DATA ACCESS SERVICE AND PROPRIETARY INFORMATION.
------------------------------------------------
13.1 Transfer Agent has developed a data access service that enables the
Customer to access the Customer's shareholder records maintained on Transfer
Agent's computer system through the Internet or remote access, as the case may
be (the "Data Access Service"). The Customer wishes to use such Data Access
Service subject to the terms and conditions set forth herein. Therefore, the
Customer and Transfer Agent agree as follows:
13.2 ACCESS TO SHAREHOLDER DATA.
The Service provided to the Customer pursuant to this Agreement shall
include granting the Customer access to the Shareholder, Customer and proxy
information ("Shareholder Data") maintained on the records database for the
purpose of examining, maintaining, editing, or processing transactions with
respect to Shareholder Data.
13.3 PROCEDURES FOR ACCESS.
To use the Data Access Service, the Customer must access through the
Internet or remote terminal, as the case may be, pursuant to the procedures
provided by Transfer Agent. Such access is accomplished by entering a unique
Customer identification ("Customer ID(s)") and passwords ("Password(s)")
assigned to the Customer by Transfer Agent. Each Customer ID and Password
assigned to the Customer is for use only by the Customer. The Customer shall
establish and maintain reasonable security and control over all such Customer
IDs and Passwords. Transfer Agent shall maintain reasonable security and control
over each Customer ID. After Transfer Agent assigns the Customer a Password, the
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Customer shall change the Password. The Customer recognizes that Transfer Agent
does not have knowledge of the Password, which is selected by the Customer and
is within the Customer's exclusive control after the necessary change. The
Customer may change any Password thereafter at any time. Customer agrees to
notify Transfer Agent immediately if any employee of Customer granted access to
the Data Access Service leaves the employ of the Customer, in order to enable
Transfer Agent to terminate such employee's access.
13.4 PROPRIETARY INFORMATION.
The Customer acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Customer by the Transfer Agent as part of the Data
Access Service to access Shareholder Data maintained by the Transfer Agent on
data bases under the control and ownership of the Transfer Agent or other third
party constitute copyrighted, trade secret, or other proprietary information
(collectively, "Proprietary Information") of substantial value to the Transfer
Agent or other third party. In no event shall Proprietary Information be deemed
Shareholder Data. The Customer agrees to treat all Proprietary Information as
proprietary to the Transfer Agent and further agrees that it shall not divulge
any Proprietary Information to any person or organization except as may be
provided hereunder. Without limiting the foregoing, the Customer agrees for
itself and its employees and agents:
(a) to refrain from copying or duplicating in any way the Proprietary
Information, other than to print out pages reflecting Shareholder
Data to provide to shareholders or for Customer's internal use;
(b) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently
obtained, to inform Transfer Agent in a timely manner of such fact
and dispose of such information in accordance with Transfer Agent's
instructions;
(c) to refrain from causing or allowing the Proprietary Information from
being retransmitted to any other computer facility or other location,
except with the prior written consent of Transfer Agent;
(d) that the Customer shall have access only to those authorized
transactions agreed upon by the parties; and
(e) to honor all reasonable written requests made by Transfer Agent to
protect at Transfer Agent's expense the rights of Transfer Agent
Proprietary Information at common law, under federal copyright law
and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this SECTION 13.
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13.5 CONTENT. If the Customer notifies the Transfer Agent that any part of
the Data Access Service does not operate in material compliance with the user
documentation provided by the Transfer Agent for such service, the Transfer
Agent shall endeavor in a timely manner to correct such failure. Organizations
from which the Transfer Agent may obtain certain data included in the Services
are solely responsible for the contents of such data and the Customer agrees to
make no claim against the Transfer Agent arising out of the contents of such
third party data, including, but not limited to, the accuracy thereof.
13.6 TRANSACTIONS. If the transactions available to the Customer include
the ability to originate electronic instructions to the Transfer Agent in order
to (i) effect the transfer or movement of Shares or direct EQI to transfer cash
or (ii) transmit Shareholder information or other information, then in such
event the Transfer Agent shall be entitled to rely on the validity and
authenticity of such instructions without undertaking any further inquiry as
long as such instructions are undertaken in good faith in conformity with
security procedures established by the Transfer Agent from time to time.
14. CONFIDENTIALITY.
----------------
14.1 COVENANT. The Transfer Agent and the Customer agree that they will
not, at any time during the term of this Agreement or after its termination,
reveal, divulge, or make known to any person, firm, corporation or other
business organization, any customers' lists, trade secrets, cost figures and
projections, profit figures and projections, or any other secret or confidential
information whatsoever that is identified as confidential, whether of the
Transfer Agent or of the Customer, used or gained by the Transfer Agent or the
Customer during performance under this Agreement unless required to do so by
law. The Customer and the Transfer Agent further covenant and agree to retain
all such knowledge and information acquired during and after the term of this
Agreement respecting such lists, trade secrets, or any secret or confidential
information whatsoever in trust for the sole benefit of the Transfer Agent or
the Customer and their successors and assigns. The above prohibition of
disclosure shall not apply to the extent that the Transfer Agent must disclose
such data to its sub-contractor or agent for purposes of providing services
under this Agreement. The above prohibition of disclosure also shall not apply
to the extent that such information (a) is in the public domain at the time at
the time of the disclosure or (b) becomes known to the Transfer Agent or
Customer from a third party without restriction.
14.2 SHAREHOLDER "NON-PUBLIC PERSONAL INFORMATION." The Transfer Agent
agrees that it will not disclose or use any "non-public personal information"
about the Customer's Shareholders other than such uses or disclosures that are
necessary to permit the Transfer Agent to carry out its duties under this
Agreement, or are otherwise required by the Transfer Agent in compliance with a
regulatory investigation or in response to judicial process, including as set
forth in Section 14.3 below. "Non-public personal information" about a
Shareholder shall mean (i) personally identifiable financial information; (ii)
any list, description, or other grouping of consumers that is derived from using
any personally identifiable information that is not publicly available; and
(iii) any other information that the Transfer Agent is prohibited from using or
disclosing pursuant to Regulation S-P under Section 504 of the Gramm Xxxxx
Xxxxxx Act.
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14.3 REQUEST FOR RECORDS. In the event that any requests or demands are
made for the inspection of the Shareholder records of the Customer, other than
request for records of Shareholders pursuant to standard subpoenas from state or
federal government authorities (e.g., in divorce and criminal actions), the
Transfer Agent will endeavor to notify the Customer and to secure instructions
from an authorized officer of the Customer as to such inspection. The Transfer
Agent expressly reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by counsel that it may be held liable for
the failure to exhibit the Shareholder records to such person or if required by
law or court order.
15. TERM AND TERMINATION.
---------------------
15.1 TERM. The Initial Term of this Agreement shall be three (3) years
from the date first stated above unless terminated pursuant to the provisions of
this SECTION 16. Unless a terminating party gives written notice to the other
party sixty (60) days before the expiration of the Initial Term this Agreement
will renew automatically from year to year ("Renewal Term"). Sixty (60) days
before the expiration of the Initial Term or a Renewal Term the parties to this
Agreement will agree upon a Fee Schedule for the upcoming Renewal Term. If no
new fee schedule is agreed upon, the fees will increase as set forth in SECTION
7.2.
15.2 EARLY TERMINATION. Notwithstanding anything contained in this
Agreement to the contrary, should Customer desire to move any of its Services
provided by the Transfer Agent hereunder to a successor service provider prior
to the expiration of the then current Initial or Renewal Term, or without the
required notice period, the Transfer Agent shall make a good faith effort to
facilitate the conversion on such prior date, however, there can be no guarantee
that the Transfer Agent will be able to facilitate a conversion of Services on
such prior date. In connection with the foregoing, should Services be converted
to a successor service provider, or if the Customer is liquidated or its assets
merged or purchased or the like with another entity which does not utilize the
services of the Transfer Agent, all reasonable out-of-pocket expenses or costs
associated with the movement of records and material shall be borne by the
Customer.
15.3 EXPIRATION OF TERM. After the expiration of the Initial Term or
Renewal Term whichever currently in effect, should either party exercise its
right to terminate, all reasonable out-of-pocket expenses or costs associated
with the movement of records and material will be borne by the Customer.
Additionally, the Transfer Agent reserves the right to charge for any other
reasonable expenses associated with such termination and a
de-conversion/transition fee in an amount equal to 15% of the aggregate fees
incurred by Customer during the immediately preceding twelve (12) month period,
provided, however, such fee shall in no event be less than five thousand
dollars.
15.4 TERMINATION.
This Agreement may be terminated in accordance with the following:
(a) at any time by any party upon a material breach of a
representation, covenant or term of this Agreement by any other
unaffiliated party which is not cured within a period not to exceed
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thirty (30) days after the date of written notice thereof by one of
the other parties; and
(b) by any party, at any time, in the event that during the term of
this Agreement, a bankruptcy or insolvency proceeding is filed by or
against another party or a trustee or receiver is appointed for any
substantial part of another party's property (and in a case of
involuntary bankruptcy, insolvency or receivership proceeding, there
is entered an order for relief, or order appointing a receiver or
some similar order or decree and the other party or parties do not
succeed in having such order lifted or stayed within sixty (60) days
from the date of its entry), or another party makes an assignment of
all or substantially all of its property for the benefit of creditors
or ceases to conduct its operations in the normal course or business.
15.5 RECORDS. Upon receipt of written notice of termination, the parties
will use commercially practicable efforts to effect an orderly termination of
this Agreement. Without limiting the foregoing, Transfer Agent will deliver
promptly to Customer, in machine readable form on media as reasonably requested
by Customer, all Shareholder and other records, files and data supplied to or
compiled by Transfer Agent on behalf of Customer.
16. ASSIGNMENT.
-----------
16.1 AFFILIATES. The Transfer Agent may, without further consent of the
Customer assign its rights and obligations hereunto to any affiliated transfer
agent registered under Section 17A(c)(2) of the Exchange Act that is qualified
to perform all the duties required under this Agreement. Transfer Agent will not
assign its rights and obligations to any other person without the prior written
consent of Customer, which consent will not be unreasonably withheld.
16.2 SUB-CONTRACTORS. Transfer Agent may, without further consent on the
part of Customer, subcontract with other subcontractors for telephone and
mailing services as may be required from time to time; provided, however, that
the Transfer Agent shall be as fully responsible to the Customer for the acts
and omissions of any subcontractor as it is for its own acts and omissions.
17. UNAFFILIATED THIRD PARTIES.
---------------------------
Nothing herein shall impose any duty upon the Transfer Agent in connection
with or make the Transfer Agent liable for the actions or omissions to act of
unaffiliated third parties such as, by way of example and not limitation,
airborne services, the U.S. mails and telecommunication companies, provided, if
the Transfer Agent selected such company, the Transfer Agent shall have
exercised due care in selecting the same.
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18. MISCELLANEOUS.
--------------
18.1 NOTICES.
Any notice or communication by the Transfer Agent or the Customer to the
other is duly given if in writing and delivered in person or mailed by first
class mail, postage prepaid, telex, telecopier or overnight air courier
guaranteeing next day delivery, to the other's address:
If to the Customer:
RMK Strategic Income Fund, Inc.
Fifty Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
If to the Transfer Agent:
EquiServe Trust Company, N.A.
c/o EquiServe, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: General Counsel
The Transfer Agent and the Customer may, by notice to the other, designate
additional or different addresses for subsequent notices or communications.
18.2 SUCCESSORS.
All the covenants and provisions of this agreement by or for the benefit
of the Customer or the Transfer Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
18.3 AMENDMENTS.
This Agreement may be amended or modified by a written amendment executed
by the parties hereto and, to the extent required, authorized or approved by a
resolution of the Board of Directors of the Customer.
18.4 SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provision, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
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18.5 GOVERNING LAW.
This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts.
18.6 FORCE MAJEURE.
Notwithstanding anything to the contrary contained herein, Transfer Agent
shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God,
terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or
malfunction of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor
difficulties, war, or civil unrest provided it maintains and implements a
disaster recovery plan designed to comply with applicable laws and regulations.
To the best of its knowledge, the various procedures and systems which Transfer
Agent has implemented or will implement with regard to safeguarding from loss or
damage attributable to fire, theft or any other cause (including provision for
twenty-four (24) hours-a-day restricted access) of Customer's records and other
data and Transfer Agent's records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are adequate and
Transfer Agent will make such changes therein from time to time as in its
judgment are required for the secure performance of its obligations hereunder.
Transfer Agent maintains adequate insurance to enable it to continue its
operations as described herein.
18.7 DESCRIPTIVE HEADINGS.
Descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
18.8 THIRD PARTY BENEFICIARIES.
The provisions of this Agreement are intended to benefit only the Transfer
Agent, the Customer and their respective permitted successors and assigns. No
rights shall be granted to any other person by virtue of this agreement, and
there are no third party beneficiaries hereof.
18.9 SURVIVAL.
All provisions regarding indemnification, warranty, liability and limits
thereon, and confidentiality and protection of proprietary rights and trade
secrets shall survive the termination of this Agreement.
18.10 PRIORITIES.
In the event of any conflict, discrepancy, or ambiguity between the terms
and conditions contained in this Agreement and any schedules or attachments
hereto, the terms and conditions contained in this Agreement shall take
precedence.
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18.11 MERGER OF AGREEMENT.
This agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof,
whether oral or written.
18.12 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by one of its officers thereunto duly authorized, all as of the
date first written above.
RMK STRATEGIC INCOME FUND, INC.
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
EQUISERVE, INC. EQUISERVE TRUST COMPANY, N.A.
By: By:
----------------------- -----------------------
Name: Name:
--------------------- ---------------------
Title: Title:
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