INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT
INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT ("Agreement") made
as of the 27 day of March, 1996, by and between THE XXX XXXXXXX TRUST, a
Delaware business trust (the "Trust"), on behalf of its series, the Growth
Fund (the "Fund"), and HOLLAND CAPITAL MANAGEMENT, L.P., a Delaware limited
partnership (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust intends to engage in business as an open-end
management investment company of the series type and register as such under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Investment Manager is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Investment Manager to
provide investment management and administrative services to the Trust and the
Fund in the manner and on the terms and conditions hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending
to be legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE INVESTMENT MANAGER.
1.1. INVESTMENT MANAGEMENT SERVICES. The Investment Manager
shall, subject to the supervision of the Board of Trustees of the Trust, act
as investment manager of the Fund and, as such, shall:
1.1.1. INVESTMENT OF ASSETS. Supervise and direct the
investment of the Fund's assets in accordance with applicable law, and
the investment objectives, investment program, policies, and restrictions set
forth in the Fund's current prospectus ("Prospectus") and Statement of
Additional Information ("SAI") contained in the Trust's Registration Statement
under the 1940 Act and the Securities Act of 1933, as amended ("1933 Act"),
and subject to such further limitations as the Board of Trustees of the Trust
may from time to time impose by written notice to the Investment Manager.
1.1.2. INVESTMENT PROGRAM. The Investment Manager shall operate a
continuing program for the management of the Fund's assets and resources. In
furtherance of these duties and responsibilities, the Investment Manager is
authorized, in its discretion and without prior consultation with the Trust
to: (i) buy, sell, exchange, convert, lend, and otherwise trade in any stocks,
bonds, and other securities or assets for the Fund; and (ii) place orders and
negotiate the commissions (if any) for the execution of transactions in
securities with or through such brokers, dealers, underwriters, or issuers as
the Investment Manager may select for the Fund.
1.2. ADMINISTRATIVE SERVICES. The Investment Manager shall
oversee the administration of the Trust's and the Fund's business and
affairs as set forth herein and shall provide or arrange for the provision of
certain services required for effective administration of the Trust and the
Fund. In connection therewith, the Investment Manager shall:
1.2.1. OFFICE AND OTHER FACILITIES. Furnish, without cost to
the Trust, or provide and pay the cost of, such office facilities,
furnishings, and office equipment as are necessary for the performance of the
Investment Manager's duties to the Trust under this Agreement.
1.2.2. PERSONNEL. Provide, without additional remuneration
from or other cost to the Trust, the services of individuals competent to
perform all of the Investment Manager's duties under this Agreement.
1.2.3. AGENTS. Assist the Trust in selecting, coordinating
the activities of, supervising and acting as liaison with, any other person or
agent engaged by the Trust, including the Trust's administrative or accounting
service providers, depository agent, custodian, consultants, transfer agent,
dividend disbursing agent, independent accountants, and independent legal
counsel. The Investment Manager shall also monitor the functions of such
persons and agents to ensure that their activities adhere to the provisions of
the Trust's current Prospectus(es) and SAI(s), and to ensure compliance with
applicable laws, including without limitation compliance of the Trust and the
Trust's custodian(s) with Rule 17f-5 under the 1940 Act, if appropriate.
1.2.4. TRUSTEES AND OFFICERS. Authorize and permit those
partners and employees of the Investment Manager who are natural persons
and who may be elected or appointed as trustees or officers of the Trust to
serve in such capacities, without remuneration from or additional cost to the
Trust.
1.2.5. BOOKS AND RECORDS. Maintain customary records, on
behalf of the Trust, in connection with the performance of the Investment
Manager's duties under this Agreement. The Investment Manager also shall
monitor and oversee the performance of the agents specified in Subparagraph
1.2.3. above, to ensure that all financial, accounting, corporate, and other
records required to be maintained and preserved by the Fund or on its behalf
shall be maintained in accordance with applicable laws and regulations.
1.2.6. COST OVERSIGHT. Monitor and review activities and
procedures of the Trust and its agents identified in Subparagraph 1.2.3.
above, in order to identify and seek to obtain possible service improvements
and cost reductions.
1.2.7. ACCOUNTING AND COMPLIANCE POLICIES AND PROCEDURES.
Assist in developing, reviewing, maintaining, and monitoring the effectiveness
of, accounting and compliance policies and procedures, including valuation
procedures of each Fund's portfolio, expense allocation procedures, personal
trading procedures and the Trust's Code of Ethics. The Investment Manager also
shall assist and coordinate participation by the Trust and its agents in any
audit by its outside auditors or any examination by federal or state
regulatory authorities or any self-regulatory organization. The Investment
Manager also shall oversee and coordinate the activities of the Trust's
accountants, outside counsel, and other experts in these audits or
examinations.
1.2.8. SYSTEMS. Assist in developing, implementing, and
monitoring the Trust's use of automated systems for the purchase, sale,
redemption and transfer of shares and for recording and tracking such
transactions. The Investment Manager also shall assist in developing,
implementing, and monitoring the Trust's use of automated communications
systems with brokers, dealers, custodians, and other service providers,
including without limitation trade clearance systems.
1.2.9. REPORTS TO THE TRUST. Furnish to or place at the
disposal of the Trust such information, reports, evaluations, analyses, and
opinions relating to its administrative functions as the Trust may, at any
time or from time to time, reasonably request or as the Investment Manager may
deem helpful to the Trust. The Investment Manager also shall assist in the
preparation of agendas and other materials for meetings of the Trust's Board
of Trustees and shall attend such meetings.
1.2.10. REPORTS AND FILINGS. Provide appropriate assistance in
the development and/or preparation of all reports and communications by
the Trust to shareholders of the Trust and all reports and filings necessary
to maintain the registrations and qualifications of the Trust's shares under
federal securities law.
1.2.11. SHAREHOLDER INQUIRIES. Respond to all inquiries from
shareholders of the Trust or otherwise answer communications from
shareholders if such inquiries or communications are directed to the
Investment Manager. If any such inquiry or communication would be more
properly answered by one of the agents listed in Subparagraph 1.2.3. above,
the Investment Manager shall coordinate, as needed, the provision of their
response.
2. ALLOCATION OF EXPENSES.
2.1. EXPENSES PAID BY THE INVESTMENT MANAGER.
2.1.1. IN GENERAL. The Investment Manager shall bear all of
its own expenses in connection with the performance of its duties under this
Agreement.
2.1.2. SALARIES AND FEES OF PARTNERS. The Investment Manager
shall pay all salaries, expenses, and fees, if any, of the partners and
employees of the Investment Manager who are trustees, officers or employees
of the Trust.
2.1.3. WAIVER OR ASSUMPTION AND REIMBURSEMENT OF TRUST
EXPENSES BY THE INVESTMENT MANAGER. The waiver or assumption and
reimbursement by the Investment Manager of any expense of the Trust that the
Investment Manager is not required by this Agreement to waive, or assume or
reimburse, shall not obligate the Investment Manager to waive, assume, or
reimburse the same or any similar expense of the Trust on any subsequent
occasion, unless so required pursuant to a separate agreement between the
Trust and the Investment Manager.
2.2. EXPENSES PAID BY THE TRUST. The Trust shall bear all
expenses of its organization, operation, and business not specifically
waived, assumed, or agreed to be paid by the Investment Manager as provided in
this Agreement or any other agreement between the Trust and the Investment
Manager, and as described in the Trust's current Prospectus(es) and SAI(s).
3. FEES.
3.1. COMPENSATION RATE. The Trust on behalf of the Fund shall
pay the Investment Manager, as compensation for all services rendered,
facilities provided, and expenses waived or assumed and reimbursed by the
Investment Manager pursuant to this Agreement, annual fees as specified on
Schedule A hereto.
3.2. METHOD OF COMPUTATION. The fees shall accrue on each
calendar day and the sum of the daily fee accruals for the Fund shall be
paid monthly to the Investment Manager on the first business day of the next
calendar month. The daily fee accruals shall be computed by multiplying the
fraction of one over the number of calendar days in the year by the applicable
annual rates for the applicable Fund, described in Subparagraph 3.1. above,
and multiplying the product by the net assets of the Fund in accordance with
the Trust's current Prospectus as of the close of business on the last
preceding business day on which the Fund was open for business.
3.3. PRORATION OF FEE. If this Agreement becomes effective
or terminates before the end of any month, the fee for the period from
the effective date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs.
3.4. LIMITATION OF FEE. In the event the expenses of the
Fund (including the fees of the Investment Manager and amortization of
organization expenses but excluding interest, taxes, brokerage commissions,
extraordinary expenses and sales charges and distribution fees) for any fiscal
year exceed the limits set by applicable regulations of state securities
commissions, the Investment Manager shall reduce its fee by the amount of such
excess. Any such reductions are subject to readjustment during the year. The
payment of the investment management fee at the end of any month shall be
reduced or postponed or, if necessary, a refund shall be made to the Fund so
that at no time shall there be any accrued but unpaid liability under this
expense limitation.
4. BROKERAGE.
4.1. USE OF BROKERAGE COMMISSIONS. Subject to seeking best
execution, and subject to any policies or procedures as then approved by the
Board of Trustees of the Trust, the Investment Manager, in carrying out its
duties under Subparagraph 1.1. above, may cause the Fund to pay a
broker-dealer that furnishes brokerage or research services (as such services
are defined under Section 28(e) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) a higher commission than that which might be charged
by another broker-dealer that does not furnish brokerage or research services
or that furnishes brokerage or research services deemed to be of lesser value,
if the Investment Manager determines in good faith that the amount of such
commission is reasonable in relation to the value of the brokerage and
research services provided by the broker-dealer viewed in terms of either that
particular transaction or the overall responsibilities of the Investment
Manager with respect to other accounts, if any, as to which it exercises
investment discretion (as such term is defined under Section 3(a)(35) of the
1934 Act). To demonstrate that such determinations were in good faith, and to
show the overall reasonableness of commissions paid, the Investment Manager
shall be prepared to show that commissions paid: (i) were for purposes
contemplated by this Agreement; (ii) provide lawful and appropriate assistance
to the Investment Manager in the performance of its decision-making
responsibilities; and (iii) were within a reasonable range as compared to the
rates charged by qualified brokers to other institutional investors as such
rates may become known from available information. The Trust recognizes that,
on any particular transaction, a higher than usual commission may be paid due
to the difficulty of the transaction in question. The Investment Manager is
also authorized to consider sales of shares as a factor in the selection of
brokers to execute brokerage and principal transactions, subject to the
requirements of "best execution."
4.2. USE OF AFFILIATED PERSONS AS BROKER. Subject to seeking
best execution, and subject to any policies or procedures as then approved by
the Board of Trustees of the Trust, the Investment Manager, in carrying out
its duties under Subparagraph 1.1. above, may select, and place orders for the
purchase and sale of portfolio securities with, brokers who are affiliated
persons of the Investment Manager or the Trust.
5. INVESTMENT MANAGER'S USE OF THE SERVICES OF OTHERS.
The Investment Manager may at its own cost (except as contemplated by
Paragraph 4 above) employ, retain, or otherwise avail itself of the services
or facilities of other persons or organizations for the purpose of providing
the Investment Manager or the Trust with such (i) statistical and other
factual information, (ii) advice regarding economic factors and trends, (iii)
advice as to occasional transactions in specific securities, or (iv) other
information, advice, or assistance as the Investment Manager may deem
necessary, appropriate, or convenient for the discharge of its obligations
hereunder or otherwise helpful to the Investment Manager or the Trust, or in
the discharge of the Investment Manager's overall responsibilities with
respect to any accounts, if any, for which it serves as investment manager.
6. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Trust,
pursuant to the provisions of rules or regulations of the Securities and
Exchange Commission under Section 31(a) of the 1940 Act and maintained and
preserved by the Investment Manager on behalf of the Trust are the property of
the Trust and shall be surrendered by the Investment Manager promptly on
request by the Trust. The Investment Manager shall not disclose or use any
records or information obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized by this Agreement and applicable
law. The Investment Manager shall keep confidential any information obtained
in connection with their duties hereunder and shall disclose such information
only if the Trust has authorized such disclosure or if such disclosure is
expressly required by applicable law or federal or state regulatory
authorities.
7. REPORTS TO THE INVESTMENT MANAGER.
The Trust shall furnish or otherwise make available to the Investment
Manager such Prospectuses, Statements of Additional Information, financial
statements, proxy statements, reports, and other information relating to the
business and affairs of the Trust, as the Investment Manager may, at any time
or from time to time, reasonably require in order to discharge its obligations
under this Agreement.
8. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Investment
Manager or any affiliated person of the Investment Manager to render
investment management and/or administrative services to other investment
companies (including but not limited to one or more series of the Trust), to
act as investment adviser or investment counselor to other persons, firms, or
corporations, or to engage in other business activities; however, so long as
this Agreement or any extension, renewal, or amendment hereof shall remain in
effect or until the Investment Manager shall otherwise consent, the Investment
Manager shall be the only investment manager to the Trust.
9. LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER AND
INDEMNIFICATION BY THE TRUST.
9.1. LIMITATION OF LIABILITY.
9.1.1. Neither the Investment Manager nor any of its partners,
employees or agents performing services for the Trust, at the direction
or request of the Investment Manager in connection with the Investment
Manager's discharge of its obligations undertaken or reasonably assumed with
respect to this Agreement, shall be liable for any act or omission in the
course of or in connection with the Investment Manager's services hereunder,
including any error of judgment or mistake of law or for any loss suffered by
the Trust, in connection with the matters to which this Agreement relates;
provided, that nothing herein contained shall be construed to protect the
Investment Manager or any such person against any liability to the Trust or
its shareholders to which the Investment Manager or such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its or their duties on behalf of the Trust.
9.1.2. The Investment Manager may apply to the Board of
Trustees of the Trust at any time for instructions and may consult
counsel for the Trust or its own counsel and consult with accountants and
other experts with respect to any matter arising in connection with the
Investment Manager's duties, and the Investment Manager shall not be liable or
accountable for any action taken or omitted by it in good faith in accordance
with such instruction or with the opinion of such counsel, accountants, or
other experts.
9.2. INDEMNIFICATION BY THE TRUST.
9.2.1. As long as the Investment Manager acts in good faith
and with due diligence and without gross negligence, the Trust shall
indemnify the Investment Manager and hold it harmless from and
against any and all actions, suits, and claims, whether groundless or
otherwise, and from and against any and all losses, damages, costs,
charges, reasonable counsel fees and disbursements, payments,
expenses, and liabilities (including reasonable investigation
expenses) arising directly or indirectly out of the services rendered
to the Trust hereunder. The indemnity and defense provisions set
forth herein shall indefinitely survive the termination of this
Agreement.
9.2.2. The rights hereunder shall include the right to
reasonable advances of defense expenses in the event of any pending
or threatened litigation with respect to which indemnification
hereunder may ultimately be merited. In order that the
indemnification provision contained herein shall apply, however, it
is understood that if in any case the Trust may be asked to indemnify
or hold the Investment Manager harmless, the Board of Trustees of the
Trust shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood
that the Investment Manager shall use all reasonable care to identify
and notify the Board of Trustees of the Trust promptly concerning any
situation which presents or appears likely to present the probability
of such a claim for indemnification against the Trust, but failure to
do so in good faith shall not affect the rights hereunder.
10. INDEMNIFICATION BY THE INVESTMENT MANAGER.
10.1. The Investment Manager shall indemnify the Trust and its
officers and trustees, and hold them harmless from and against any and all
actions, suits, and claims, whether groundless or otherwise, and from and
against any and all losses, damages, costs, charges, reasonable counsel fees
and disbursements, payments, expenses, and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of any service
rendered to the Trust hereunder and arising or based upon the willful
misfeasance, bad faith, or gross negligence of the Investment Manager, its
partners, employees, and agents in the performance of its or their duties on
behalf of the Trust. The indemnity and defense provisions set forth herein
shall indefinitely survive the termination of this Agreement.
10.2. The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Investment Manager
may be asked to indemnify or hold the Trust and its officers and trustees
harmless, the Investment Manager shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Trust shall use all reasonable care to identify and notify
the Investment Manager promptly concerning any situation which presents or
appears likely to present the probability of such a claim for indemnification
against the Investment Manager, but failure to do so in good faith shall not
affect the rights hereunder.
11. TERM OF AGREEMENT.
The term of this Agreement shall begin on the day and year first
above written, and unless sooner terminated as hereinafter provided, shall
continue in effect for a period of one year. Thereafter, this Agreement shall
continue in effect from year to year, subject to the termination provisions
and all other terms and conditions hereof; provided, that such continuance is
specifically approved at least annually by the Board of Trustees of the Trust
or by vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act; and provided further, that
in either event such continuance also is approved annually by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Board of Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party (hereinafter "non-interested
Trustees"). Any approval of this Agreement by the holders of a majority of the
outstanding voting securities of the Fund shall be effective to continue this
Agreement, notwithstanding the fact that (i) a comparable agreement has not
been approved by the holders of a majority of the outstanding shares of any
other series of the Trust and (ii) this Agreement has not been approved by the
vote of a majority of the outstanding shares of the Trust, unless such
approval shall be required by any other applicable law or otherwise. The
Investment Manager shall furnish to the Trust, promptly upon its request, such
information as may be reasonably necessary to evaluate the terms of this
Agreement or any extension, renewal or amendment thereof.
12. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; provided, that no material amendment shall be effective unless
authorized by resolution of the Board of Trustees of the Trust or by a
majority of the outstanding voting securities of the Fund, or, in the case of
an amendment to this Agreement with respect to the Fund, by a resolution of
the Board of Trustees of the Trust and/or a vote of a majority of the
outstanding voting securities of the Fund, as required by applicable law.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) days' prior written notice to the
other party; provided, that in the case of termination by the Trust such
action shall have been authorized by (i) resolution of the Board of Trustees
of the Trust, including a majority of the non-interested Trustees, or (ii) a
majority of the outstanding voting securities of the Fund. In the case of
termination by the Investment Manager, such termination shall not be effective
until the Trust shall have contracted with one or more persons to serve as
successor investment manager for the Trust and such person(s) shall have
assumed such position.
14. MISCELLANEOUS.
14.1. NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (i) if to the
Investment Manager, to Holland Capital Management, L.P., Suite 3260, 00 Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxxxx, and
(ii) if to the Trust, to The Xxx Xxxxxxx Trust, Suite 3260, 00 Xxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxxxx.
14.2. CAPTIONS. The captions contained in this Agreement are included
for convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
14.3. INTERPRETATION. Nothing herein contained shall be deemed to
require the Trust to take any action contrary to its Declaration of Trust or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of
Trustees of the Trust of its responsibility for and control of the conduct of
the affairs of the Trust.
14.4. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any, by
the United States courts or, in the absence of any controlling decision of any
such court by rules, regulations, or orders of the Securities and Exchange
Commission validly issued pursuant to the 1940 Act. In addition, where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is relaxed by a rule, regulation, or order of the Securities and
Exchange Commission, whether of special or of general application, such
provision shall be deemed to incorporate the effect of such rule, regulation,
or order.
14.5. SEVERABILITY. 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.
14.6. GOVERNING LAW. Except insofar as the 1940 Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Illinois.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year
first above written.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year
first above written.
ATTEST: THE XXX XXXXXXX TRUST
/S/ XXXXXX X.XXXXXX By: /S/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: President and Chairman of the Board of
Trustees
ATTEST: HOLLAND CAPITAL MANAGEMENT, L.P.
/S/ XXXXXX X.XXXXXX By: /S/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: Managing Partner and Chief Investment
Officer
SCHEDULE A
SCHEDULE OF FEES
The Growth Fund
.85% of the average daily net assets up to $500 million
.75% of the average daily net assets up to the next $500 million
.65% of the average daily net assets in excess of $1 billion
