TRANSFER AGENCY AGREEMENT
THIS AGREEMENT is made as of the 3rd day of June, 1996 between S.I.S.
MERCATOR FUND, INC., a Maryland corporation (the "Fund"), and STRATEGIC
INVESTMENT SERVICES, INC., a Pennsylvania corporation (the "Transfer Agent").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"); and
WHEREAS, the Fund desires to retain the Transfer Agent to serve as the
Fund's transfer agent and registrar, and the Transfer Agent is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Transfer Agent to serve as
transfer agent and registrar for the Fund with respect to the shares of
the Fund's Common Stock, $.01 par value ("Shares") for the period and on
the terms set forth in this Agreement. The Fund presently intends to
issue two separate series or classes of shares, which are described in
the Prospectus delivered to the Transfer Agent herewith, and the Fund may
classify and reclassify additional series or classes of Shares hereafter.
The Transfer Agent shall identify to each such series or class property
belonging to such series or class and in reports, records, confirmations
and notices to the Fund and Shareholders and shall issue shares on a per
series basis as provided in the Prospectus. The Transfer Agent accepts
such appointment and agrees to furnish the services herein set forth in
return for the compensation provided herein. Any class of shares created
by the Fund after the date hereof shall be included hereunder upon
mutual agreement of the fund and the Transfer Agent
2. Delivery of Documents. The Fund has furnished the Transfer Agent with
copies properly certified or authenticated of each of the following:
(a)Resolutions of the Fund's Board of Directors authorizing the
appointment of the Transfer Agent as transfer agent and registrar for the
Fund and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the Fund's
officers and other persons authorized to issue Oral Instructions and to
sign Written Instructions, as hereinafter defined, on behalf of the Fund
and to execute stock certificates representing Shares;
(c) The Fund's Articles of Incorporation and all amendments thereto (such
Articles of Incorporation, as presently in effect and as they shall from
time to time be amended, are herein called the "Charter");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are
herein called the "By-Laws");
(e) The Custodian Agreement between Bank of California, N.A. and the Fund
(the "Custodian Agreement"); and
(f) The Fund's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended (the "1933 Act") (File No. 33-95102) and under the 1940
Act as filed with the SEC on July 25, 1995 relating to Shares. The Fund
will furnish the Transfer Agent from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
(a)"Authorized Person." As used in this Agreement, the term "Authorized
Person" means any officer of the Fund and any other person, whether or not
any such person is an officer or employee of the Fund, duly authorized by
the Board of Directors of the Fund to give Oral and Written Instructions on
behalf of the Fund and listed on the Certificate annexed hereto as Appendix
A or any amendment thereto as may be received by the Transfer Agent from
time to time.
(b)"Oral Instructions." As used in this Agreement, the term "Oral
Instructions" means oral instructions actually received by the Transfer
Agent from an Authorized Person or from a person reasonably believed by the
Transfer Agent to be an Authorized Person. The Fund agrees to deliver to
the Transfer Agent, at the time and in the manner specified in Paragraph
4(b) of this Agreement, Written Instructions confirming Oral Instructions.
(c)"Written Instructions." As used in this Agreement, the term "Written
Instructions" means written instructions delivered by hand, mail, tested
telegram, cable, telex or facsimile sending device, and received by the
Transfer Agent and signed by an Authorized Person. Written Instructions
include electronic transmission properly originated and confirmed by the
Fund.
(d)"Shares." As used in this Agreement the term "Shares" means each
separate class of shares of common stock issued by the Fund that are
subject to this Agreement and as to which the services provided hereunder
relate.
4. Instructions Consistent with Charter, etc.
(a) Unless otherwise provided in this Agreement, the Transfer Agent shall
act only upon Oral or Written Instructions. Although the Transfer Agent
may know of the provisions of the Charter and By-Laws of the Fund, the
Transfer Agent may assume that any Oral or Written Instructions received
hereunder are not in any way inconsistent with any provisions of such
Charter or By-Laws or any vote, resolution or proceeding of the
Shareholders, or of the Board of Directors, or of any committee thereof.
(b) The Transfer Agent shall be entitled to rely upon any Oral Instructions
and any Written Instructions actually received by the Transfer Agent
pursuant to this Agreement. The Fund agrees to forward to the Transfer
Agent Written Instructions confirming Oral Instructions in such manner
that the Written Instructions are received by the Transfer Agent by the
close of business of the same day that such Oral Instructions are given to
the Transfer Agent. The Fund agrees that the fact that such confirming
Written Instructions are not received by the Transfer Agent shall in no
way affect the validity of the transactions or enforceability of the
transactions authorized by the Fund by giving Oral Instructions. The Fund
agrees that the Transfer Agent shall incur no liability to the Fund in acting
upon oral Instructions given to the Transfer Agent hereunder concerning
such transactions, provided such instructions reasonably appearing to have
been recieved from an Authorized Person and provided further, if such oral
or Written Instructions were received from an Affiliate, that such Affiliate
has acted without negligence (unless such Affiliate has received and
transmitted erroneous instructions received from an Authorized Person that
is not an Afflilate).
(c)In the case of any stock split, recapitalization or other capital
adjustment requiring a change in the form of Share certificates, the
Transfer Agent will, at the Fund's expense, issue Share certificates in
the new form in exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
(i) a Certificate authorizing the issuance of Share certificates in the
new form;
(ii) a certified copy of any amendment to the Charter with respect to the
change;
(iii) specimen Share certificates for each class of Shares in the new form
approved by the Board of Directors of the Fund, with a Certificate signed
by the Secretary of the Fund as to such approval; and
(iv) an opinion of counsel for the Fund with respect to the validity of
the Shares in the new form and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable federal law
or regulation (i.e., if subject to registration, that the Shares have
been registered and that the Registration Statement has become effective
or, if exempt, the specific grounds therefor).
5. Transactions Not Requiring Instructions. In the absence of contrary
Written Instructions, the Transfer Agent is authorized to take the
following actions:
(a) Issuance of Shares. Upon receipt of a purchase order from an investor
for the purchase of Shares and sufficient information to enable the
Transfer Agent to establish a Shareholder account, and after confirmation
of receipt or crediting of Federal funds for such order or receipt of such
other consideration for such shares as may be described in the Prospectus
from the Fund's Custodian, the Transfer Agent shall issue and credit the
account of such investor with Shares, based on the current net asset
value of such Shares, as provided by the Fund or its agent.
(b) Transfer of Shares; Uncertificated Securities. Where a Shareholder
does not hold a certificate representing the number of Shares in his
account and does provide the Transfer Agent with written instructions for
the transfer of such Shares, which include a signature guaranteed by a
national bank, a member of a National Securities Exchange or such other
person as may be acceptable to the Transfer Agent, and such other
appropriate documentation to permit a transfer, then the Transfer Agent
shall register such Shares and shall deliver them pursuant to instructions
received from the transferor, puruant to the law of the State of Maryland
and other applicable law relating to the transfer of shares of common stock.
(c) Stock Certificates. If at any time the Fund issues stock certificates,
the following provisions will apply:
(i) The Fund will supply the Transfer Agent with a sufficient supply of
stock certificates representing Shares, in the form approved from time to
time by the Board of Directors of the Fund, and, from time to time, shall
replenish such supply upon request of the Transfer Agent. Such stock
certificates shall be properly signed, manually or by facsimile signature,
by the duly authorized officers of the Fund, whose names and positions
shall be set forth as indicated on Appendix A, and shall bear the
corporate seal or facsimile thereof of the Fund, notwithstanding the
death, resignation or removal of any officer of the Fund, such executed
certificates bearing the manual or facsimile signature of such officer
shall remain valid and be issued to Shareholders until the Transfer Agent
is otherwise directed by Written Instructions.
(ii) In the case of the loss or destruction of any certificate representing
Shares, no new certificate shall be issued in lieu thereof, unless there
shall first have been furnished an appropriate bond of indemnity issued
by the surety company approved by the Transfer Agent, except upon the
receipt by the Transfer Agent of Written Instructions from the Fund.
(iii) Upon receipt of signed stock certificates in proper form for
transfer, and upon cancellation or destruction thereof, the Transfer Agent
shall countersign, register and issue new certificates for the same number
of Shares in the name of the transferee and shall deliver them pursuant to
instructions received from the transferor and the law of the State of
Maryland relating to the transfer of shares of common stock.
(iv) Upon receipt of the stock certificates, which shall be in proper form
for transfer, together with the Shareholder's instructions to hold such
stock certificates for safekeeping, the Transfer Agent shall reduce such
Shares to uncertificated status, while retaining the appropriate
registration in the name of the Shareholder upon the transfer books.
(v) Upon receipt of written instructions from a Shareholder of
uncertificated securities for a certificate in the number of shares in
his account, the Transfer Agent will issue such stock certificates and
deliver them to the Shareholder.
(d) Redemption of Shares. Upon receipt of a redemption order from a
stockholder and/or in accordance with Written Instructions, the Transfer
Agent shall promptly obtain and notify the Custodian of the amount
necessary to pay such redemption and shall record the redemption of the
appropriate number of Shares from the redeeming Shareholder's account and
arrange for direct payment of redemption proceeds to such Shareholders by
the Fund's Custodian, by wire transfer or otherwise as provided in
Written Instructions in accordance with such procedures and controls as
are provided in the Prospectus or as may be mutually agreed upon from
time to time by among the Fund, the Transfer Agent and the Fund's Custodian.
6. Authorized Shares. The Fund's authorized capital stock is described in
the Fund's Charter. The Transfer Agent shall record issues of all Shares
and shall notify the Fund in case any proposed issue of Shares by the Fund
shall result in an over-issue as defined by Section 8-104(2) of Article 8
of the Maryland Uniform Commercial Code. In case any issue of Shares
would result in such an over-issue, the Transfer Agent shall refuse to
issue said Shares and shall not countersign and issue certificates for
such Shares. The Fund agrees to notify the Transfer Agent promptly of any
change in the number of authorized Shares and any change in the number of
Shares registered under the 1933 Act or termination of the Fund's declaration
under Rule 24(f)-2 of the 1940 Act. The Transfer Agent shall provide the Fund
with the necessary information to prepare Form 24f-2 under the 1940 Act.
7. Dividends and Distributions. The Fund shall furnish the Transfer Agent
with appropriate evidence of action by the Fund's Board of Directors
authorizing the declaration and payment of dividends and distributions.
The Transfer Agent shall notify the Custodian of the amount of cash
necessary to pay such dividend or distribution and, after deducting any
amount required to be withheld by any applicable tax laws, rules and
regulations or other applicable laws, rules and regulations, the Transfer
Agent shall in accordance with the instructions in proper form from a
Shareholder and the provisions of the Fund's Charter, issue and credit
the account of the Shareholder with an appropriate number of Shares, or,
if the Shareholder so elects, request the Custodian to pay such dividends or
distribution in cash to Shareholders.
The Transfer Agent shall prepare, file with the Internal Revenue Service
and other appropriate taxing authorities, and address and mail to
Shareholders such returns and information relating to dividends and
distributions paid by the Fund as are required to be so prepared, filed
and mailed by applicable laws, rules and regulations, or such substitute
form of notice as may from time to time be permitted or required by the
Internal Revenue Service. On behalf of the Fund, the Transfer Agent shall
process and confirm shareholder addresschanges, recording new addresses and
shall mail certain requests for Shareholders' certifications under penalties
of perjury and insrtuct the Custodian to pay on a timely basis to the
appropriate Federal authorities any taxes to be withheld on dividends and
distributions paid by the Fund, all as required by applicable Federal tax
laws and regulations.
8.Communications with Shareholders.
(a)Communications to Shareholders. The Transfer Agent will address and
mail all communications by the Fund to its Shareholders, with copies to
such persons as may be designated in Written Instructions from the Fund.
Without limiting the foregoing, the Transfer Agent will prepare, address
and mail confirmations of purchases, redemptions and transfers of Fund
Shares, account changes, dividends and distributions, 1099's and other
tax information, and account statements, and will address and mail
dividend and distribution notices, reports to Shareholders and proxy
material for its meetings of Shareholders. The Transfer Agent will receive
and tabulate the proxy cards forthe meetings of the Fund's Shareholders and
notify the Fund of the results of such tabulations.
(b) Correspondence. The Transfer Agent will answer such correspondence
from Shareholders, securities brokers and others relating to its duties
hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Fund.
9. Records. The Transfer Agent shall maintain records of the accounts for
each Shareholder showing the following information:
(a) name, address and tax identification or Social Security number;
(b) number and class of Shares held and number and class of Shares for
which certificates, if any, have been issued, including certificate numbers
and denominations;
(c) historical information regarding the account of each Shareholder,
including dividends and distributions paid and the date and price for all
transactions on a Shareholder's account;
(d) any stop or restraining order placed against a Shareholder's account;
(e) any correspondence relating to the current maintenance of a
Shareholder's account;
(f) information with respect to withholdings; and
(g) any information required in order for the Transfer Agent to perform
any calculations contemplated or required by this Agreement.
The books and records pertaining to the Fund which are in the possession
of the Transfer Agent shall be the property of the Fund and shall be
returned to the Fund or its designee upon request. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable laws and rules and regulations. The Fund, or the Fund's
authorized representatives, shall have access to such books and records
at all times during the Transfer Agent's normal business hours. Upon the
request of the Fund, copies of any such books and records shall be
provided by the Transfer Agent to the Fund or the Fund's authorized
representitive or designee at the Funds expense.
10. Ongoing Functions. The Transfer Agent will perform the following
functions on an ongoing basis:
(a) furnish state-by-state registration reports to the Fund;
(b) provide toll-free lines for direct Shareholder use, plus customer
liaison staff with on-line inquiry capacity;
(c) provide the Fund with duplicate confirmations of stockholder activity,
whether executed through a dealer or directly with the Transfer Agent;
(d) provide Shareholder lists and statistical information concerning
accounts to the Fund; and
(e) provide timely notification of Fund activity and such other
information as may be agreed upon from time to time between the Transfer
Agent and the Fund's Custodian, to the Fund or the Custodian and such
reports to the Fund as may be reasonably requested by the Fund.
11. Cooperation with Accountants. The Transfer Agent shall cooperate with
the Fund's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such
accountants for the expression of their opinion as such may be required
by the Fund from time to time.
12. Confidentiality. The Transfer Agent agrees on behalf of itself and its
employees to treat confidentially all records and other information
relative to the Fund and its Shareholders, except, after prompt prior
notification to and approved in writing by the Fund, which approval may
not be withhold where the Transfer Agent reasonably believes that it may
be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities,
or when so requested by the Fund.
13. Equipment Failures. In the event of equipment failures beyond the
Transfer Agent's control, the Transfer Agent shall, at no additional
expense to the Fund, promptly notify the Fund and take prompt, reasonable
steps to minimize service interruptions but shall have no liability with
respect thereto except, at its own expense, to reconstruct any records of
the Fund that the Transfer Agent is required to prepare and maintain
hereunder.
14. Right to Receive Advice. The Transfer Agent shall be protected in any
action or inaction that the Transfer Agent takes in reliance on its legal
counsel. The Transfer Agent shall notify the Fund of the receipt of such
advice within a reasonable time.
15. Compliance with Governmental Rules and Regulations. The Transfer Agent
agrees to perform its duties hereunder in accordance with applicable law;
however, the Transfer Agent assumes no responsibility for ensuring that
the Fund complies with the requirements of the 1933 Act, the 1934 Act, the
1940 Act, the CEA and any laws, rules and regulations of governmental
authorities having jurisdiction.
16. Compensation. As compensation for the services rendered by the
Transfer Agent during the term of this Agreement, each Portfolio of the
Fund will pay to the Transfer Agent annual fees of $25 per shareholder
account, but not less than $20,000 per year. The minimum fee shall be
paid on a pro rata basis for any period of less than one year when this
agreement is in effect and may be paid on a monthly basis.
17.Indemnification.
(a) The Fund agrees to indemnify and hold harmless the Transfer Agent from
all taxes, charges, expenses (except expenses that are inherent to its
duties hereunder), assessments, claims and liabilities, including (without
limitation) reasonable attorneys' fees and disbursements, arising directly
or indirectly from any action or thing which the Transfer Agent takes or
does or omits to take or do upon Oral or Written Instructions provided by,
or on behalf of, the Fund, provided that the Transfer Agent shall not be
indemnified against any liability (or any expenses incident to such
liability) arising out of the Transfer Agent's own misfeasance, bad
faith or negligence or disregard of its duties in connection with the
performance of its duties and obligations specfically described in this
Agreement.
(b) he Transfer Agent shall not pay or settle any claim, demand, expense or
liability to which it may seek indemnity pursuant to paragraph (a) above
(an "Indemnifiable Claim") without the express written consent of the Fund.
The Transfer Agent shall notify the Fund promptly of receipt of
notification of an Indemnifiable Claim. Unless the Fund notifies the
Transfer Agent within 30 days of receipt of Written Notice of such
Indemnifiable Claim that the Fund does not intend to defend such
Indemnifiable Claim, the Fund shall defend the Transfer Agent for such
Indemnifiable Claim. The Fund shall have the right to defend any
Indemnifiable Cliam at its own expense, such defence to be conducted by
counsel selected by the Fund. Further, the Transfer Agent may join the Fund
in such defense at the Transfer Agent's own expense, but to the extent that
it shall so desire the Fund shall direct such defense. If the Fund shall
fail or refuse to defend, pay or settle an Idemnifiable Claim, the
Transfer Agent, at the Fund's Expense, Cinsistent with the limitation
concerning attorneys' fees expressed in Paragraph 17(a) hereof, may provide
its own defense.
18. Responsibility of the Transfer Agent. In the performance of its duties
hereunder, the Transfer Agent shall be obligated to exercise due care and
diligence and to act in a timely manner and in good faith to assure the
accuracy and completeness of all services performed under this Agreement.
The Transfer Agent shall be under no duty to take any action on behalf of
the Fund except as specifically set forth herein or as may be specifically
agreed to by the Transfer Agent in writing.
The Transfer Agent shall have no liability to the Fund for any losses or
damages the nature of which is or was remote, unforeseen, unforeseeable or
beyond the scope of reasonable anticipation at the time this Agreement was
executed.
19. Duration and Termination. This Agreement may be terminated by either
party upon not less than 180 days prior written notice. The foregoing
provisions notwithstanding, either party may terminate this Agreement in
the event of a material breach of the terms hereof after written notice to
the other party of such breach and a reasonable time for cure of such
breach, unless such breach is not curable and, in such circumstances, this
Agreement shall terminate, at the option of the injured party, three
months after the date such notice is given.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Amendments. This Agreement or any part hereof may be changed or waived
only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
22. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof,
provided that the parties hereto may embody in one or more separate
documents their agreement, if any, any agreements with respect to Written
or Oral Instructions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement shall be deemed to be a contract made in Pennsylvania and
governed by Pennsylvania law. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement
shall be binding and shall inure to the benefit of the parties hereto and
their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first
above written.
S.I.S. MERCATOR FUND, INC.
Attest: ______________________ By: __________________________
STRATEGIC INVESTMENT SERVICES, INC.
Attest: ______________________ By: __________________________
