INTERIM INVESTMENT MANAGEMENT AND
ADMINISTRATION AGREEMENT
INTERIM INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT ("Agreement")
made as of the 30th day of November, 2009, by and between THE XXX XXXXXXX TRUST,
a Delaware business trust (the "Trust"), on behalf of its series, the Xxx
Xxxxxxx Growth Fund (the "Fund"), and HOLLAND CAPITAL MANAGEMENT LLC, a Delaware
limited liability company (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company of the series type and registered 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 Investment Manager served as investment adviser to the Fund under
that certain Investment Management and Administration Agreement dated as of
March 19, 2008, as the same has been renewed (the "Prior Agreement"), until the
Prior Agreement's automatic termination in accordance with its terms as of the
date hereof.
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. All payment of
compensation shall be subject to Section 3.5 hereof.
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.
3.5. SPECIAL PROVISIONS OF INTERIM AGREEMENT.
3.5.1. ESCROW ACCOUNT. All amounts earned by the Investment Manager under this
Agreement shall be held in an interest-bearing escrow account established by the
Trust at U.S. Bank, N.A., the Fund's Custodian, or another bank independent from
the Investment Manager.
3.5.2. PAYMENT UPON APPROVAL OF FINAL AGREEMENT. In the event that a final
Investment Management and Administration Agreement between the Trust and the
Investment Manager regarding the management of the Fund's assets (a "Final
Agreement") is approved by a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the Fund on or before the 150th day following the
date hereof, then the full amount earned by the Investment Manager hereunder,
plus interest, will be paid to the Investment Manager.
3.5.3. PAYMENT IF THE FINAL AGREEMENT IS NOT APPROVED. In the event that a
Final Agreement is not approved by a majority of the outstanding voting
securities of the
Fund on or before the 150th day following the date hereof, than the Investment
Manager will be paid out of the escrow account the lesser of: (a) any costs
incurred by the Investment Manager in performing this Agreement (plus interest
earned on such amount), or (b) the total amount in the escrow account (plus
interest earned).
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.
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
until the earlier of: (i) the 151st day following the date hereof, or (ii) the
date on which a Final Agreement has been approved by a majority of the Fund's
outstanding voting securities, and upon the occurrence of either of the
foregoing, this Agreement shall automatically terminate. 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 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 the Investment Manager, without the payment
of any penalty, upon sixty (60) days' prior written notice to the Trust. This
Agreement may be terminated by either the Trust's Board of Trustees or by a
majority of the outstanding voting securities of the Fund, without the payment
of any penalty, upon ten (10) days' prior written notice to the Investment
Manager. 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. This agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
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 LLC, Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxxxx X. Xxxxxx, and (ii) if to the Trust, to
The Xxx Xxxxxxx Trust, Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx
00000, Attention: Xx. Xxxxxx X. Xxxxxx.
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, or the rules thereunder, shall be resolved by
reference to such term or provision of the 1940 Act or the rules thereunder 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.
ATTEST: THE XXX XXXXXXX TRUST
/S/ By: /S/ XXXXXX X. XXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxx
Title: President
HOLLAND CAPITAL MANAGEMENT LLC
ATTEST: By: /S/ XXXXXX X. XXXXXX
-----------------------
/S/ Name: Xxxxxx X. Xxxxxx
Title: President
SCHEDULE A
SCHEDULE OF FEES
The Xxx Xxxxxxx 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
