ADMINISTRATION AGREEMENT
AGREEMENT dated as of September 28, 1998,
by and between HOLLAND SERIES FUND, INC., a
Maryland corporation ("Fund"), and INVESTORS
CAPITAL SERVICES INC., a Delaware corporation
("Investors Capital").
WHEREAS, the Fund is registered as an
open-end management investment company under the
Investment Company Act of 1940, as amended (the
"1940 Act"), and offers shares of one series of its
common stock, par value $.01 per share, which have
been registered under the Securities Act of 1933,
as amended;
WHEREAS, Investors Capital is a service
company which provides management, administrative
and other services to investment companies and
other entities; and
WHEREAS, the Fund desires to retain
Investors Capital to render certain management and
administrative services, including supervision of
certain third party vendors to the Fund.
NOW, THEREFORE, in consideration of the
above premises and of other good and valuable
consideration the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Appointment of Administrator
The Fund hereby appoints Investors Capital
to act as administrator to the Fund for the period
and on the terms set forth in this Agreement. This
appointment applies to the existing series of the
Fund, as well as any future series provided (i) the
Fund does not object to Investors Capital in
writing or (ii) Investors Capital does not object
to the Fund in writing on the basis of the
capabilities of Investors Capital. Investors
Capital accepts such appointment and agrees to
render the services and provide, at its own
expense, the office space, furnishings and
equipment, and the personnel required by it to
perform the services on the terms and for the
compensation herein provided.
As further delineated on Schedule A of
this Agreement, which may be amended by the parties
from time to time Investors Capital shall provide
for, or assist in managing and supervising all
aspects of, the general day-to-day business
activities and operations of the Fund except for
investment advisory services, including custodial,
transfer agency, dividend disbursing, accounting,
auditing and legal services. Investors Capital
shall discharge such responsibilities subject to
the supervision and direction of the Fund's
officers and Board of Directors, and in compliance
with the objectives, policies and limitations set
forth in the Fund's registration statement,
Articles of Incorporation, By-Laws and applicable
laws and regulations. All agreements with third
parties shall be subject to review and approval by
the Fund's executive officers or Board of Directors.
2. Representation and Warranties of Investors
Capital
Investors Capital represents and warrants
to the Fund that:
A. Investors Capital is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware
and has full power and authority, corporate and
otherwise, to consummate the transactions
contemplated by this Agreement. Investors Capital
is duly qualified to carry out its business, and is
in good standing, in the State of New York.
B. The Board of Directors and
stockholders of Investors Capital have taken all
action required by law and Investors Capital 's
Certificate of Incorporation and By-Laws to
authorize the execution and delivery of this
Agreement by Investors Capital and the consummation
on behalf of Investors Capital of the transactions
contemplated by this Agreement. This Agreement
constitutes a legal, valid and binding obligation
of Investors Capital enforceable in accordance with
its terms. Neither the execution and delivery of
this Agreement, nor the consummation of the
transactions contemplated hereby, will result in a
breach of, or constitute a default under, or with
lapse of time or giving of notice or both will
result in a breach of or constitute a default
under, or otherwise give any party thereto the
right to terminate (a) any mortgage, indenture,
loan or credit agreement or any other agreement or
instrument evidencing indebtedness for money
borrowed to which Investors Capital is a party or
by which Investors Capital or any of its
properties is bound or affected, or pursuant to
which Investors Capital has guaranteed the
indebtedness of any person, or (b) any lease,
license, contract or other agreement to which
Investors Capital is a party or by which Investors
Capital or any of its properties is bound or
affected. Neither the execution and delivery of
this Agreement, nor the consummation of the
transactions contemplated hereby, will result in,
or require, the creation or imposition of any
mortgage, deed or trust, pledge, lien, security
interest, or other charge or encumbrance of any
nature upon or with respect to any of the
properties now or hereafter owned by Investors
Capital.
C. Neither the execution and delivery of
this Agreement nor the consummation of the
transactions contemplated hereby will violate any
provision of the Certificate of Incorporation or
By-Laws of Investors Capital.
D. Except such as have been obtained and
as are in full force and effect and subject to no
dispute, claim or challenge, no permit, license,
franchise, approval, authorization, qualification
or consent of, registration or filing with, or
notice to, any governmental authority is required
in connection with the execution and delivery by
Investors Capital of this Agreement or in
connection with the consummation by Investors
Capital of any transactions contemplated by this
Agreement, and no such permit, license, franchise,
approval, authorization, qualification or consent
of, registration or filing with, or notice to any
federal, state or local governmental authority is
required in connection with Investors Capital 's
business or operations as currently conducted or as
currently contemplated to be conducted. Investors
Capital has conducted its business and operations
in compliance with all applicable laws and
regulations.
3. Duties of the Fund
A. The Fund will deliver to Investors
Capital copies of each of the following documents
and will deliver to Investors Capital all future
amendments and supplements, if any:
(1) A certified copy of the Articles
of Incorporation of the Fund as amended
and currently in effect;
(2) A certified copy of the Fund's
By-Laws as amended and currently in effect;
(3) A copy of the resolution of the
Fund's Board of Directors authorizing this
Agreement;
(4) The Fund's registration statement
on Form N-1A as filed with, and declared
effective by, the U.S. Securities and
Exchange Commission ("SEC"), and all
amendments thereto;
(5) Each resolution of the Board of
Directors of the Fund authorizing the
original issue of its shares;
(6) Certified copies of the
resolutions of the Fund's Board of
Directors authorizing: (i) certain
officers and employees of Investors
Capital to give instructions to the Fund's
custodian and transfer agent as required
by agreements with such parties, and
(ii)certain officers and employees of
Investors Capital to sign checks and pay
expenses on behalf of the Fund;
(7) A copy of the current Advisory
Agreement between the Fund and Holland &
Company L.L.C.;
(8) A copy of the Transfer Agency
Agreement relating to the Fund;
(9) A copy of the Custody Agreement
relating to the Fund; and
(10) Such other certificates, documents
or opinions which Investors Capital may in
its reasonable discretion, deem necessary
or appropriate in the proper performance
of its duties.
B. The Fund will cooperate in
providing Investors Capital with all necessary
information to permit Investors Capital to perform
its duties hereunder.
C. The Fund certifies to Investors
Capital that as of the close of business on the
date of this Agreement, it has authorized
capitalization of one billion shares of its common
stock, $.01 par value (the "shares"), divided among
its series, and agrees that Investors Capital will
be promptly notified from time to time when the
Fund takes corporate action to increase the number
of authorized shares, including restoring redeemed
shares held in its treasury to the status of
authorized and unissued shares.
4. Services To Be Obtained Independently By
the Fund
The Fund shall, at its own expense,
provide for any of its own:
A. Organizational expenses;
B. Services of an independent
accountant;
C. Services of outside legal counsel
(including such counsel's review of the Fund's
registration statement, proxy materials and other
reports and materials prepared by Investors Capital
under this Agreement);
D. Services contracted for by the
Fund directly from parties other than Investors
Capital acting as administrator (or subcontracted
for by Investors Capital on behalf of the Fund,
subject to review and approval by the Fund's
executive officers or Board of Directors);
E. Trading operations and brokerage
fees, commissions and transfer taxes in connection
with the purchase and sale of securities for its
investment portfolio;
F. Investment advisory services;
G. Taxes, insurance premiums and
other fees and expenses applicable to its operation;
H. Costs incidental to any meeting of
shareholders including, but not limited to, legal
and accounting fees, proxy filing fees and costs
incidental to the preparation, printing and mailing
of any proxy materials;
I. Costs incidental to Directors'
meetings, including fees and expenses of Directors;
J. The salary and expenses of any
officer or employee of the Fund who is not also an
officer or employee of Investors Capital;
K. Services of the Fund's custodian
and depository banks;
L. Costs incidental to the
preparation, printing and distribution of its
registration statement and any amendments thereto,
and shareholder reports, including printing setup,
printing and mailing costs;
M. All registration fees and filing
fees required under the securities laws of the
United States and state regulatory authorities;
N. Fidelity bond and Director's and
officers' liability insurance;
O. Record retention costs of third
parties;
P. Distribution fees pursuant to any
distribution plan, if and when adopted pursuant to
Rule 12b-1 under the 1940 Act; and
Q. Litigation and indemnification
expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund's
business.
5. Price, Charges and Instructions
In consideration of the services rendered
and expenses assumed by Investors Capital pursuant
to this Agreement, the Fund shall pay Investors
Capital a monthly fee at the annual rate of .15% of
its average daily net assets. Such sum shall be
paid in monthly installments by the tenth day of
each month for the previous month. This fee shall
be subject to an annual minimum of $25,000 for the
first year of operations and $50,000 annually
thereafter.
In addition, Investors Capital shall be
reimbursed for the reasonable cost of any and all
forms, including blank checks and proxies, used by
it in communicating with shareholders, Directors,
Fund management, or any regulatory agencies on
behalf of the Fund, or especially prepared for use
in connection with its obligations hereunder, as
well as the reasonable cost of postage, telephone,
telex and telecopy used in communicating with
shareholders, Directors, Fund management, or any
regulatory agencies on behalf of the Fund,
travel-related expenses when incurred on official
Fund business and microfilm used each year to
record the previous year's transactions in
shareholder accounts and computer tapes used for
reasonable permanent storage of records, permanent
storage costs for hard copy Fund records and
reasonable cost of insertion of materials in
mailing envelopes by outside firms. Prior to
ordering any forms in such supply as it estimates
will be adequate for more than two years' use,
Investors Capital shall obtain the written consent
of the Fund. All forms for which Investors Capital
has received reimbursement from the Fund shall be
and remain the property of the Fund until used.
At any time Investors Capital may apply to
any officer of the Fund or officer of the Fund's
investment adviser for instructions, and may
consult with legal counsel for the Fund, if
consented to by an officer of the Fund at the
expense of the Fund, with respect to any matter
arising in connection with the services to be
performed by Investors Capital under this Agreement
and Investors Capital shall not be liable and shall
be indemnified by the Fund for any action taken or
omitted by it in good faith in reliance upon such
instructions or upon the opinion of such counsel.
Investors Capital shall be protected and
indemnified in acting upon any paper or document of
the Fund reasonably believed by it to be genuine
and to have been signed by the proper person or
persons and shall not be held to have notice of any
change of authority of any person, until receipt of
written notice thereof from the Fund. Investors
Capital shall also be protected and indemnified,
except where a stop order is in effect, in
recognizing transfer documents which Investors
Capital reasonably believes to bear the proper
manual or facsimile signature of the officers of
the Fund, and the proper counter-signatures of any
present or former transfer agent.
6. Limitation of Liability and Indemnification
A. Investors Capital shall provide
its services in a professional manner customarily
provided by leading mutual fund administration
companies. Investors Capital shall be responsible
for the performance of only such duties as are set
forth or contemplated herein or contained in
instructions given to it by the Fund which are not
contrary to this Agreement or that are mutually
agreed upon by both parties to this agreement.
Investors Capital shall have no liability for any
loss or damage resulting from the performance or
non-performance of its duties hereunder unless
caused by or resulting from the negligence or
misconduct of Investors Capital, its officers or
employees or the violation by any of such persons
of this Agreement. In any event, Investors Capital
shall not be liable for any consequential damages,
except to the extent resulting from its gross
negligence, bad faith, or willful misconduct.
B. The Fund shall indemnify and hold
Investors Capital harmless from all loss, cost,
damage and expense, including reasonable expenses
for counsel, incurred by it resulting from any
claim, demand, action or suit in connection with
any action or omission by it in the performance of
its duties hereunder, or as a result of acting upon
any instructions reasonably believed by it to have
been executed by a duly authorized officer of the
Fund, provided that this indemnification shall not
apply to actions or omissions of Investors Capital
, its officers or employees in cases of its or
their own negligence, bad faith, or misconduct or
the violation by any of such persons of this
Agreement.
C. The Fund will be entitled to
participate at its own expense in the defense, or,
if it so elects, to assume the defense of any suit
brought to enforce any liability subject to the
indemnification provided above, and if the Fund
elects to assume the defense, such defense shall be
conducted by counsel chosen by the Fund. In the
event the Fund elects to assume the defense of any
such suit and retain such counsel, Investors
Capital or any of its affiliated persons, named as
defendant or defendants in the suit, may retain
additional counsel unless the Fund shall have
specifically authorized the retaining of such
counsel.
7. Confidentiality
Investors Capital agrees that, except as
otherwise required by law, Investors Capital will
keep confidential all records and information in
its possession relating to the Fund or its
shareholders or shareholder accounts and will not
disclose the same to any person except at the
request or with the written consent of the Fund.
8. Compliance With Governmental Rules and
Regulations
The Fund assumes full responsibility for
complying with all applicable requirements of the
Securities Act of 1933, the 1940 Act and the
Securities Exchange Act of 1934, all as amended,
and any laws, rules and regulations of governmental
authorities having jurisdiction, except to the
extent that Investors Capital specifically assumes
any such obligations under the terms of this
Agreement.
Investors Capital shall maintain and
preserve for the period prescribed, such records
relating to the services to be performed by
Investors Capital under this Agreement as are
required pursuant to the 1940 Act and the
Securities Exchange Act of 1934. All such records
shall at all times remain the respective properties
of the Fund, shall be readily accessible during
normal business hours and shall be promptly
surrendered upon the termination of this Agreement
or otherwise on written request. Records shall be
surrendered in usable machine readable form.
9. Status of Investors Capital
Investors Capital shall be deemed to be an
independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Fund
from time to time, have no authority to act or
represent the Fund in any way or otherwise be
deemed an agent of the Fund.
Nothing herein shall be deemed to limit or
restrict Investors Capital 's right or that of any
of its affiliates or employees, to engage in any
other business or to devote time and attention to
the administration or other related aspects of any
other registered investment company or to render
services of any kind to any other corporation,
firm, individual or association.
10. Printed Matter Concerning the Fund or
Investors Capital
Neither the Fund nor Investors Capital
shall publish and circulate any printed matter
which contains any reference to the other party
without its prior written approval, excepting such
printed matter as refers in accurate terms to
Investors Capital's appointment under this
Agreement and excepting as may be required by
applicable laws or regulations.
11. Term, Amendment and Termination
This Agreement may be modified or amended
from time to time by mutual agreement between the
parties hereto. The Agreement shall remain in
effect until September 28, 1999, and shall
automatically be renewed annually thereafter unless
terminated by either party at the end of such
period or thereafter subject to the terms for
termination provided in this Section 11. Upon
termination of the Agreement, the Fund shall pay to
Investors Capital such compensation as may be due
under the terms hereof on the date of such
termination. Either party may terminate the
Agreement with sixty (60) days written notice.
If, during the term of the Agreement,
either of the parties hereto shall be in default in
the performance of any of its duties and
obligations hereunder (the defaulting party), the
other party hereto may give written notice to the
defaulting party and if such default shall not have
been remedied within thirty (30) days after such
written notice is given, then the party giving such
notice may terminate this Agreement by thirty-(30)
days written notice of such termination to the
defaulting party, but such termination shall not
affect any rights or obligations of either party
arising from or relating to such default under the
terms hereof. In the case of Investors Capital,
default shall be defined as "in the reasonable
judgement of the Fund, that Investors Capital's
performance is consistently below the industry
standard for comparable performance of mutual funds
administrative service providers".
12. Notices
Any notice or other communication
authorized or required hereunder shall be in
writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be
addressed (a)-if to the Fund, to its adviser at 000
Xxxx Xxxxxx, Xxx Xxxx, XX, 00000, Attn: Xxxxxxx X.
Xxxxxxx, and (b)if to Investors Capital, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxxx. Either party may
designate a different address by notice to the
other party. Any such notice or other
communication shall be deemed given when actually
received.
13. Non-Assignability
This Agreement shall not be assigned by
either of the parties hereto without the prior
consent in writing of the other party. Any
purported assignment in violation of this agreement
shall be void and of no effect.
14. Successors
This Agreement shall be binding on and
shall insure to the benefit of the Fund and
Investors Capital, and their respective successors
and permitted assigns.
15. Governing Law
This Agreement shall be governed by and
construed in accordance with the laws of the State
of New York.
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed by their
officers designated below as of the day and year
above written.
ATTEST:
HOLLAND SERIES FUND, INC.
By:
ATTEST:
INVESTORS CAPITAL SERVICES, INC.
By:
SCHEDULE A
to
ADMINISTRATION AGREEMENT
between
HOLLAND SERIES FUND, INC.
and
INVESTORS CAPITAL SERVICES, INC.
Pursuant to the attached Administration Agreement,
Investors Capital Services, Inc. ("Investors
Capital ") will provide the following services to
Holland Series Fund, Inc.(the "Fund"):
1) Supervision of all third party
vendors to the Fund - Investors
Capital will supervise the quality
of service and competitiveness of
fees of all Fund vendors, except
the investment adviser and
sub-advisers. Investors Capital
will develop day-to-day working
relationships with existing
vendors as well as evaluate
alternative vendor candidates, as
reasonably requested by the Fund's
officers. The vendors that
Investors Capital will be
responsible for include:
a) Transfer and Dividend
Disbursing Agent, Fund
Accounting Agent and
Custodian - Investors
Capital will make
necessary efforts to
ensure that all legally
required functions are
performed at a high
quality level and at a
competitive fee.
Investors Capital will
strive to enhance the
service levels as well as
reporting capabilities.
b) Outside Counsel,
Independent Accountant
and Other Vendors -
Investors Capital will
coordinate communications
with all other Fund
vendors with a goal of
enhancing service levels
while controlling costs.
c) Insurance Providers -
Investors Capital will
identify potential
insurance providers and
evaluate the comparative
terms and costs of
fidelity bond and
Director's and Officer's
Errors and Omissions
coverage. Investors
Capital will continually
monitor the
appropriateness of the
chosen providers and
coverage.
d) Shareholder Servicing
Agent - Investors Capital
will oversee the
shareholder servicing of
the Fund.
2) Monitor and Report on Compliance -
Investors Capital will monitor the
Fund's compliance with the
regulations of Sub-Chapter M of
the Internal Revenue Code with
particular emphasis on the asset
diversification, income and
short-short tests. Investors
Capital will monitor the Fund's
compliance with the regulations of
the securities laws, particularly
the Investment Company Act of
1940, with particular emphasis on
the diversification, voting stock
and Rule 2a-7 tests. Investors
Capital will monitor all
Prospectus, Statement of
Additional Information and
Board-imposed compliance
limitations. Investors Capital
will report compliance status in
all required areas in a format and
at a frequency mutually agreed
upon between Fund officers and
Directors and Investors Capital,
including a quarterly review and
reporting pursuant to the Fund's
Code of Ethics policy.
3) Prepare and Monitor Annual
Compliance and Administrative
Calendar - Investors Capital will
prepare an annual calendar which
will include key dates in the
operations of the Fund, such as
Board and Audit Committee Meetings
and mailings, filing dates,
compliance monitoring and other
mutually agreed upon events.
Investors Capital will monitor the
calendar and report on status of
activity on a regular basis to
Fund officers.
4) Board of Directors' Meetings -
Investors Capital will prepare and
mail all necessary Resolutions,
Agenda, Powers of Attorney and
other material in advance of each
Board Meeting, and will prepare
and mail all Board written
consents. Investors Capital will
do a presentation to the Board of
the status of all administrative
and operations functions at each
meeting. Investors Capital will
coordinate other Vendor
presentations to the Board when
required. Investors Capital will
pay all required Directors' fees
and expenses, from the Fund's
accounts maintained with its
custodian, on a timely and
accurate basis.
5) Monthly Fund Management Reporting
- Investors Capital will collect,
review and summarize all Vendor
reports. Investors Capital will
prepare a monthly administrative
report which will include the
financial statements, a compliance
summary, expense ratio
calculations, portfolio turnover
ratio calculations and performance
calculations, and will prepare
other reasonably requested
activity reports.
6) Shareholder Reports - Investors
Capital will prepare the
semi-annual and annual financial
reports and footnotes required by
SEC regulation for reporting to
the shareholders of the Fund
("Shareholders") and the SEC.
Investors Capital will coordinate
with the Investment Adviser,
Sub-advisers, and Independent
Accountants to obtain the
appropriate letters to the
Shareholders. Investors Capital
will coordinate the printing of
the reports and mail to the
Shareholders as well as file
copies with the appropriate
regulatory authorities. Investors
Capital will respond to any
shareholder inquiries under the
direction of the Fund's officers.
8) SEC Filings - Investors Capital
will prepare for Fund officer
review all necessary filings and
make such filings on a timely
basis with the SEC. These will
include Form N-SAR, Rule 24e-2 and
24f-2 filings, proxy materials,
post-effective amendments to Form
N-1A and any other SEC filings.
9) Blue Sky Monitoring and Filings -
Investors Capital will monitor
Blue Sky compliance in each
jurisdiction and perform all
administrative functions,
including the making of necessary
filings on behalf of the Fund,
under the supervision of the
Fund's Distributor. Investors
Capital will report the status of
the Fund's registration of each
series of shares on a regular
basis to the Fund's Directors and
officers.
10) Other Filings - On behalf of the
Fund, Investors Capital will
prepare and file any other
documents required by federal,
state and other applicable laws
and regulations with the
appropriate jurisdiction,
including abandoned property
reports and state corporate law
filings.
11) Holdings Reconciliations -
Investors Capital will review
holdings reconciliations between
the Custodian and Fund Accounting
Agent and between the Investment
Adviser, Sub-advisers and the
Custodian/Fund Accounting Agent.
All discrepancies will be
researched and reported promptly
to the Fund's officers or
Directors.
12) Proxy Statement and Annual Meeting
- Investors Capital will prepare
all proxy materials, file them
with the SEC and mail them to the
Shareholders. Investors Capital
will set up the Annual Meeting,
prepare the agenda and script,
tabulate and solicit votes if
requested to do so by the Fund's
officers or Directors and perform
the duties of the inspector of the
elections.
13) Fund Expenses - Investors Capital
will review all Fund expenses and
strive to create efficiencies and
economies of scale wherever
possible. Investors Capital,
under supervision and direction of
Fund officers, will pay all Fund
bills in an accurate and timely
manner from the Fund's accounts
maintained with its custodian.
14) New Series Registration -
Investors Capital will assist
management in the preparation of
and filing with the SEC of all new
Series or other changes to the
Fund's prospectus and Statement of
Additional Information.
15) Office Facilities - Investors
Capital will maintain office
facilities and provide clerical
services and supplies in support
of the administration of the Fund
and will provide the Fund address
upon request.
16) Statistical Research Data -
Investors Capital will calculate
and disseminate all required
statistical research data required
to the relevant publications and
media.
17) Fund Officers - Investors Capital
will provide experienced
professionals to serve as Fund
officers (Secretary, Treasurer,
and/or Assistant Treasurer) and
perform the functions of these
offices.
18) Books and Records - Investors
Capital will oversee the
preparation and accuracy of,
maintain, and store the books and
records of the Fund.
19) Miscellaneous Regulatory Matters -
Investors Capital will provide
advice independently or with the
support of the Fund's counsel to
Fund management with respect to
regulatory matters affecting the
Fund.
20) General - Investors Capital will
make its staff available to
management to assist in or to
respond to any reasonable request
for Fund- or industry-related
information. If requested,
Investors Capital will make its
facilities available for a meeting
of the Fund's officers or
Directors. Investors Capital will
assist in any examination of the
Fund by the SEC, IRS or any other
regulatory agency.
