ADMINISTRATION AGREEMENT
AGREEMENT made effective as of the 1st day of March, 2012, by and between
Northeast Investors Growth Fund, a Massachusetts business trust (the "Fund"),
and Northeast Management & Research Company, Inc., a Massachusetts corporation
(in its capacity as the Fund's administrator, the "Administrator").
WHEREAS, the Fund is an open-end, management investment company, registered
under the Investment Company Act of 1940, as amended (the "1940 Act").
WHEREAS, the Fund is a party to a Fund Accounting and Services Agreement, dated
as of August 29, 2011 (the "Accounting Agreement"), with ALPS Fund Services,
Inc. ("ALPS").
WHEREAS, the Fund desires the Administrator to render and/or arrange for the
provision of certain administrative and fund accounting services (including
those being performed under the Accounting Agreement) to the Fund, and the
Administrator is willing to render and arrange such services upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the parties hereto agree as
follows:
1. Services.
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(a) The Fund hereby retains the Administrator to act as its
administrator, subject to the general supervision and
directions of the Board of Trustees of the Trust as herein set
forth. The Administrator shall perform or arrange for the
performance of the administrative, fund accounting and
clerical services set forth on Schedule A hereto, as Schedule
A may from time to time be amended by the mutual consent of
the parties (the "Services").
(b) It being understood and agreed that the Fund has previously
engaged ALPS to perform certain fund accounting services on
the terms and conditions set forth in the Accounting
Agreement. The Administrator hereby assumes the Fund's
responsibility to pay the fee to ALPS as set forth in
Appendix C to the Accounting Agreement, without any change in
the amount of such fee unless agreed to in writing by the
Administrator. The Fund shall remain responsible for, and the
Administrator does not hereby or otherwise assume the Fund's
responsibility for, paying any and all other amounts to ALPS
under the Accounting Agreement or otherwise, including without
limitation the Fund's obligation to reimburse ALPS for
out-of-pocket expenses and the Fund's indemnification
obligations to ALPS.
2. Allocation of Charges and Expenses.
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(a) Allocable to the Fund. Except as otherwise provided in
Sections 2(b) and 2(c) below, the Fund assumes and shall pay
all charges and expenses (including initial costs and charges
of the Fund incurred in connection with its organization and
the commencement of its operations) which may be properly
payable by it including, without limitation:
(i) the charges and expenses of any custodian or depository
appointed by the Fund for safekeeping of its cash, portfolio
securities and other property; (ii) the charges and expenses
of its auditors; (iii) the charges and expenses of any stock
transfer or dividend disbursing functions or of any stock
transfer or dividend disbursing agent or agents appointed by
the Fund; (iv) broker' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the
Fund is a party; (v) all taxes, including issuance and
transfer taxes, and corporate fees payable by the Fund to
federal, state or other governmental agencies; (vi) the cost
of share certificates representing shares of the Fund; (vii)
the costs of issue, sales, repurchase and redemption of the
Fund's shares; (viii) all fees and other governmental charges
involved in registering and maintaining registrations of the
Fund and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions; (ix)
costs and expenses involved in complying with the laws and
regulations of all governmental bodies regulating the Fund and
the issue and sale of its securities; (x) all costs and
expenses involved in preparing, printing and distributing
prospectuses, except those used in soliciting new accounts;
(xi) all expenses of shareholders' and trustees' meetings and
of preparing, printing and mailing proxy statements, notices
and reports to shareholders; (xii) fees and travel expenses of
trustees of the fund who are not affiliated with the Adviser
(as defined below); (xiii) charges and expenses of legal
counsel in connection with matters relating to the Fund; (xiv)
association dues; (xv) postage; (xvi) the cost of premiums on
the bonds of the Fund's officers, employees and others
engaged, directly or indirectly, in activities relating to the
business of the Fund; and (xvii) the salaries of employees of
the Fund engaged in the foregoing activities.
(b) Allocable to the Adviser. Pursuant to the Advisory and Service Contract
(the "Advisory Contract") between the Fund and Northeast
Management & Research Company, Inc. (in its capacity as the
Fund's investment adviser, the "Adviser"), the Adviser is
responsible for:
(i) furnishing without expense to Fund the services of such
members of its organization as may be duly elected officers or
trustees of Fund; (ii) paying all executive officers'
salaries, if any, and executive expenses and office rent of
the Fund required in the management of the affairs of the
Fund; (iii) paying all expenses in performing the investment
advisory duties specified in the Advisory Contract; and (iv)
providing bookkeeping services and calculating the net asset
value of the Fund's shares.
(c) Allocable to the Administrator. Administrator will pay all
costs it incurs in connection with the performance of the
Services except as set forth on Schedule B hereto. The
Administrator will not be required to pay any expenses of the
Fund other than those specifically allocated to the
Administrator in Section 1(b) and this Section 2.
3. Compensation of the Administrator.
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(a) In consideration for performing the Services, the Fund shall
pay the Administrator on the last day of each month a fee in
accordance with Schedule B hereto, as Schedule B may from time
to time be amended by the mutual consent of the parties.
(b) The Administrator may from time to time agree not to impose
all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or portion thereof would
otherwise accrue) and/or undertake to pay or reimburse the
Fund for all or a portion of its expenses not otherwise
required to be borne or reimbursed by the Administrator. Any
such fee reduction or undertaking may be discontinued or
modified by the Administrator at any time.
4. Other Interests. It is understood that the Trustees, officers, agents
and shareholders of the Fund are or may be or become
interested in the Administrator as directors, officers,
employees, stockholders or otherwise, and that directors,
officers, employees and stockholders of the Administrator are
or may be or become similarly interested in the Fund as
trustees, officers, agents, shareholders or otherwise, and
that the Administrator may be or become interested in the Fund
as a shareholder or otherwise. It is also understood that
directors, officers, employees and stockholders of the
Administrator may be or become interested (as directors,
trustees, officers, employees, stockholders or otherwise) in
other companies or entities (including, without limitation,
other investment companies) controlling, controlled by or
under common control with the Administrator or which the
Administrator may in the future organize, sponsor or acquire,
or with which it may merge or consolidate, and which may
include the words "Northeast" or any combination or derivation
thereof as part of their name, and that the Administrator or
its affiliates may enter into advisory or management or
administration agreements or other contracts or relationships
with such other companies or entities.
5. Other Administrators; Sub-Administrators; Non-Exclusivity.
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(a) The Fund does, and may from time to time, employ one or more
other persons or entities to provide administrative, fund
accounting, transfer agency and other services on its behalf.
The Administrator shall have no responsibility with respect to
any such other Fund service provider, including without
limitation ALPS under the Accounting Agreement (other than the
Administrator's responsibility to pay the fee to ALPS
thereunder in accordance with Section 1(b) of this Agreement).
(b) The Administrator may employ, at its own expense, one or more
sub-administrators from time to time to perform such of the
acts and services of the Administrator and upon such terms and
conditions as may be agreed upon between the Administrator and
such sub-administrators and approved by the Board of Trustees
of the Fund.
(c) The services of the Administrator hereunder are not exclusive
and nothing in this Agreement shall limit or restrict the
right of the Administrator to engage in any other business or
to render services of any kind to any other corporation, firm,
individual or association. The Administrator shall be deemed
to be an independent contractor.
6. Standard of Care; Indemnification; Limitation of Liability.
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(a) Standard of Care and Indemnification. The Administrator shall not be
liable to the Fund, its trustees or shareholders for any
action taken or omitted to be taken by the Administrator in
connection with the performance of any of its duties or
obligations under this Agreement, and Fund shall indemnify the
Administrator and hold it harmless from and against all
damages, liabilities, costs and expenses (including reasonable
attorneys' fees and amounts reasonably paid in settlement)
incurred by the Administrator in or by reason of any pending,
threatened or contemplated action, suit, investigation or
other proceeding (including an action or suit by or in the
right of the Fund or its shareholders) arising out of or
otherwise based upon any action actually or allegedly taken or
omitted to be taken by the Administrator in connection with
the performance of any of its duties or obligations under this
Agreement; provided, however, that
nothing contained herein shall protect or be deemed to protect
the Administrator against or entitle or be deemed to entitle
the Administrator to indemnification in respect of any
liability to the Fund or its shareholders to which the
Administrator would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its
duties and obligations under this Agreement. Such expenses
shall be paid by the Fund in advance of the final disposition
of such matter upon invoice by the Administrator and receipt
by the Fund of an undertaking from the Administrator to repay
such amounts if it shall ultimately be established that the
Administrator is not entitled to payment of such expenses
hereunder.
(b) The indemnity obligations of the Fund under this Section 6
shall: (i) be paid from, and only to the extent of, assets of
the Fund and no shareholder or trustee shall have any personal
liability on account thereof; and (ii) be in addition to any
liability which the Fund may otherwise have.
(c) As used in this Section 6, the term "Administrator" shall
include any affiliates of the Administrator performing
services for the Fund contemplated hereby, and directors,
officers, agents and employees of the Administrator or such
affiliates.
(d) The Administrator may consult with counsel, accountants and
other experts in respect of the Fund's affairs and shall be
fully protected and justified in, and shall have no liability
with respect to, any action or inaction which is taken or not
taken in good faith reliance in accordance with the advice or
opinion of such counsel, accountants or other experts so long
as such counsel, accountants or other experts were selected
with reasonable care.
(e) Force Majeure. No breach of any obligation of the
Administrator shall constitute a breach or event of default to
the extent it arises out of a cause, existing or future, that
is beyond its reasonable control, including without limitation
act of terrorism, earthquake, flood, natural disaster, riot,
theft or war.
(f) No Non-Direct Damages. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE
ADMINISTRATOR BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, PUNITIVE OR SPECIAL, OR OTHER NON-DIRECT DAMAGES OF
ANY KIND WHETHER LIABILITY IS PREDICATED ON CONTRACT, STRICT
LIABILITY, OR ANY OTHER THEORY AND REGARDLESS OF WHETHER THE
ADMINISTRATOR IS ADVISED OF THE POSSIBILITY OF ANY SUCH
DAMAGES.
(g) Savings Clause. Notwithstanding any of the foregoing to the
contrary, the provisions of this Section 6 shall not be
construed so as to relieve (or attempt to relieve) the
Administrator of any liability (including liability under U.S.
Federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith), to
the extent (but only to the extent) that such liability may
not be waived, modified or limited under applicable law, but
shall be construed so as to effectuate the provisions of this
Section 6 to the fullest extent permitted by law.
(h) Survival. The provisions of this Section 6 shall survive the
termination of this Agreement.
7. Duration and Termination of this Agreement. This Agreement shall become
effective on the date hereof and shall thereafter continue in effect
unless terminated as herein provided. This Agreement may, on 60 days'
written notice to the other party, be terminated at any time without
the payment of any penalty by the Fund or by the Administrator.
8. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the
Commonwealth of Massachusetts without reference to choice of law
principles thereof and in accordance with the Investment Company Act of
1940. In the case of any conflict, the Investment Company Act of
1940 shall control.
10. Name of the Fund. The Fund hereby agrees that in the event that neither
NMR nor any of its affiliates acts as the administrator or investment
adviser to the Fund, the name of the Fund will be changed to one that
does not contain the name "Northeast" or otherwise suggest an
affiliation with NMR.
11. No Assignment. This Agreement shall not be assigned by either party
without the prior written consent of the other, except that the
Administrator may assign the agreement to another party if such
assignment is to a party controlling, controlled by or under common
control with the Administrator.
12. Entire Agreement. This Agreement (including the Schedules attached
hereto) represents the entire agreement between the Fund and the
Administrator with respect to the subject matter hereof and supersedes
any prior agreements or understandings among the parties with respect
to the subject matter hereof (including the Reimbursement Agreement,
dated September 1, 2011).
13. Miscellaneous. 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 may be executed simultaneously 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.
14. Massachusetts business trust. The Fund is a Massachusetts business
trust. It is understood and expressly stipulated that none of the
trustees or shareholders of the Fund shall be personally liable
hereunder. None of the trustees, officers, agents or shareholders of
the Fund assume any personal liability for obligations entered into on
behalf of the Fund. All persons dealing with the Fund must look solely
to the property of the Fund for the enforcement of any claims against
the Fund.
[End of Text]
A-1
[Signature Page to Administration Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Northeast Investors Growth Fund
By:_____________________________
Name: Xxxx X. Xxxxxxxx, Xx.
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Title: Vice-President
Northeast Management & Research Company, Inc.
By:_____________________________
Name: Xxxxxxx X. Xxxxx, Xx.
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Title: President
A-1
Schedule A
Services
Subject to the general supervision of the Board of Trustees of the Fund, the
Administrator shall provide certain administrative services to the Fund.
Specifically, the Administrator shall, to the extent such services are not
required to be performed by other service providers to the Fund (including
without limitation pursuant to the Accounting Agreement with ALPS, the Fund's
Transfer Agency and Services Agreement with ALPS, the Fund's Custody Agreement
with State Street Bank & Trust Company, and the Fund's Advisory and Service
Contract with Northeast Management & Research Company, Inc.):
1. Prepare the Fund's annual and semi-annual financial statements
2. Host and coordinate the annual audit of the Fund's financial statements
by the Fund's independent public accountants
3. Prepare and/or coordinate the preparation by other Fund services
providers (at the Fund's expense) of materials for meetings of the
Fund's board of trustees and, as reasonably requested, host such
meetings at its principal offices and/or telephonically
4. Manage the Fund's invoice approval process and monitor expenses
5. Maintain the Fund's budget and establish daily accruals
6. Coordinate the Fund's Blue Sky compliance process
7. Assist with obtaining the Fund's fidelity bond and errors &
omissions/trustees & officers insurance
8. In coordination with the Fund's counsel and other service providers
(and at the Fund's expense): (i) review and periodically update the
Fund's registration statement, including its summary prospectus,
prospectus and statement of additional information and (ii) coordinate
the Fund's SEC and other regulatory filings
9. Coordinate the services performed by the Fund's other service providers
10. Provide the services of a qualified person, who shall be acceptable to
the Fund and its Trustees who are not "interested persons" (as defined
in the 1940 Act), to serve as the Fund's chief compliance officer and
anti-money laundering officer and to manage the Fund's compliance
program
11. Arrange for (at the Fund's expense): (i) the preparation for the Fund
of all required tax returns and (ii) the preparation and submission of
reports to existing shareholders
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Schedule B
Administration Fee
In consideration for performing the Services, the Fund shall pay the
Administrator a fee equal on an annual basis to $185,000 ($15,416.67 monthly).
The fee shall be paid monthly in arrears on the last business day of each month.
For the month in which this Agreement commences or terminates, there shall be an
appropriate proration of the fee on the basis of the number of days that this
Agreement is in effect during such month.
In addition, the Fund shall reimburse the Administrator for its reasonable
out-of-pocket expenses incurred by it in performing the Services.
