TEMPORARY INVESTMENT SERVICES AGREEMENT BY AND AMONG [IRIDIUM ADVISORS, INC.] AND [MARS INVESTMENT MANAGEMENT, INC.]
TEMPORARY INVESTMENT SERVICES AGREEMENT BY AND AMONG
[IRIDIUM ADVISORS, INC.]
AND
[MARS INVESTMENT MANAGEMENT, INC.]
[IRIDIUM ADVISORS, INC.]
AND
[MARS INVESTMENT MANAGEMENT, INC.]
THIS AGREEMENT is made as of this ___day of ___, 2009 by and among [Iridium Advisors, Inc.]
(“Advisor”), a Delaware corporation, advisor, or affiliate of the advisor or sponsor of various
Trusts (the “Trust”) and series funds of each Trust identified on Schedule A (the “Funds”) and
[Mars Investment Management, Inc.] (the “Temporary Investment Advisor”), a Delaware corporation.
All capitalized terms used but not defined herein have the respective meanings ascribed to them in
the Transaction Agreement (defined below). (Funds not to be a party unless otherwise required by
Law.)
WHEREAS, Advisor acts as investment adviser to the Trust and each of the Funds;
WHEREAS, Buyer and Seller have entered into a Transaction Agreement dated as of ___, 2009
(the “Transaction Agreement”) whereby Buyer has agreed to acquire the Venus Business including in
respect of its provision of investment advisory services to the ’40 Act Management Funds that are
open-end companies within the meaning of the Investment Company Act (each, a “Venus Business
Fund”), which services Buyer intends to be provided by Advisor following the Closing;
WHEREAS, in order to implement Advisor’s provision of investment advisory services to the
Venus Business Funds, Buyer and Seller will cooperate to undertake the respective actions
contemplated by the conversion plan attached as Exhibit [___] to the Transaction Agreement (the
“Conversion Plan”) as promptly as practicable;
WHEREAS, the Conversion Plan contemplates that the Venus Business Funds will be reorganized
into the Funds (with respect to each Fund, its “Reorganization”);
WHEREAS, as further contemplated by the Conversion Plan, it is intended that, with respect to
each Venus Business Fund whose investment team is part of the transactions contemplated by the
Transaction Agreement, such investment team will (i) upon the Closing and the closing of the
Reorganization of such Venus Business Fund into its respective Fund, manage such Fund as employees
of Advisor and (ii) in order to facilitate its management of such Fund as employees of Advisor, be
converted onto Advisor’s front-office and middle-office platform (i.e., the Xxxxxxx River system
and similar portfolio management or trading systems) on, or shortly following, the Closing (with
respect to such Fund, its “Investment Team Conversion”);
WHEREAS, it may not be possible to effect the Investment Team Conversion for each Fund prior
to the closing of the Reorganization of the respective Venus Business Fund into such Fund;
WHEREAS, with respect to any Fund whose Investment Team Conversion is not effected prior to
its Reorganization, it is intended that the Venus Business investment team for such Fund (the
“Investment Team”) shall provide investment advisory services to such Fund through the Temporary
Investment Advisor pursuant to this Agreement;
WHEREAS, the Temporary Investment Advisor is an investment adviser registered as such with the
U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as
amended (the “Advisers Act”), and is willing to provide Advisor and the Funds with investment
management services on the terms and conditions set forth herein; and
WHEREAS, Advisor and the Temporary Investment Advisor desire to enter into an agreement for
the Temporary Investment Advisor to provide temporary investment management services to the Trust
with respect to the investment of the assets of each of the Funds.
NOW THEREFORE it is mutually agreed:
1. Investment Management Services.
(a) Investment Management
(i) With respect to each Fund, commencing upon the Effective Date (defined below) in
respect of such Fund, and subject to the overall policies, control, direction and review of
the Trust’s Board of Trustees (“Board”) and Advisor, the Temporary Investment Advisor shall
manage the investment and reinvestment of the assets of such Fund, determine in its
discretion the securities to be purchased or sold and the portion of such Fund’s assets to
be held uninvested, to provide the Trust with records concerning the Temporary Investment
Advisor’s activities which the Trust is required to maintain, and to render regular reports
to the Trust’s officers and the Board concerning the Temporary Investment Advisor’s
discharge of the foregoing responsibilities. The Temporary Investment Advisor and its
affiliates shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to act for or
represent the Funds in any way or otherwise be deemed an agent of the Funds.
(ii) The Temporary Investment Advisor shall have full discretion, power and authority
on the Funds’ behalf to buy, sell, retain, exchange or otherwise deal in investments and
other assets, make deposits, subscribe to issues and offers for sale and accept placements
of any investments, enter into foreign currency transactions on a spot or forward basis,
effect transactions on any markets, take all day to day decisions and otherwise act as the
Temporary Investment Advisor judges appropriate in relation to the investment and
reinvestment of the portfolio of assets of the Funds. This includes performing all acts and
executing all documents which the Temporary Investment Advisor reasonably considers
incidental thereto, including (without limitation) power to execute and deliver all
applications, requests, or claims for refund, reduction, repayment or credit of, or
exemption or relief from, any withholding tax or similar taxes in any jurisdiction in which
such applications, requests or claims may be made. Subject to guidelines adopted by the
Funds, the Temporary Investment Advisor shall also make recommendations or take action as to
the manner in which voting rights, rights to consent to corporate action and any other
rights pertaining to the portfolio of assets of each Fund shall be exercised.
(iii) In performing these services, the Temporary Investment Advisor shall always
adhere to the restrictions of the Trust’s Declaration of Trust and By-Laws, as they may be
amended and/or restated from time to time to the extent provided to
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the Temporary Investment Advisor by Advisor or the Trust, any and all policies,
procedures and guidelines adopted by the Board on behalf of the Funds and provided to the
Temporary Investment Advisor by Advisor or the Trust, such reasonable internal policies,
procedures or guidelines of Advisor as notified by Advisor in writing to be applicable to
the Temporary Investment Advisor, the provisions of the Investment Company Act and the
statements relating to each Fund’s respective investment objective(s), investment policies
and investment restrictions as set forth in the currently effective prospectus and statement
of additional information relating to the shares of each Fund under the Securities Act of
1933 (the “Prospectus” and “Statement of Additional Information,” respectively) and provided
to the Temporary Investment Advisor by Advisor or the Trust, as well as to the supervision
of Advisor and the Board.
(iv) Unless otherwise instructed by Advisor or the Board, and subject to the provisions
of this Agreement and to any guidelines or limitations specified from time to time by
Advisor or by the Board and provided thereby to the Temporary Investment Advisor, the
Temporary Investment Advisor shall have executed and performed on behalf of and at the
expense of the respective Funds:
(1) Purchases, sales, exchanges, conversions, and placement or orders for
execution; and
(2) Reporting of all transactions to Advisor and to other entities as directed
by Advisor or by the Board.
(v) The Temporary Investment Advisor may, where reasonable, employ agents (including
affiliates) to perform any administrative, dealing or ancillary services required to enable
the Temporary Investment Advisor to perform its services under this Agreement,
provided that (i) in selecting such an agent, (i) the Temporary Investment Advisor
shall be subject to the duty of care required of the Temporary Investment Advisor hereunder
and (ii) in the case of the delegation of any advisory services, the Temporary Investment
Advisory shall only delegate to an affiliate that is also an investment adviser registered
under the Adviser Act.
(b) Restriction of the Temporary Investment Advisor’s Powers
(i) In carrying out its duties hereunder, the Temporary Investment Advisor shall comply
with all reasonable instructions of the Trust or Advisor in connection therewith. Such
instructions may be given by letter, telex, telefax, electronic mail (“e-mail”) (so long as
a receipt for such e-mail is requested and received) or telephone confirmed by telex or
e-mail (in the manner described above), by the Board or by any other person authorized by a
resolution of the Board provided a certified copy of such resolution has been supplied to
the Temporary Investment Advisor.
(ii) All securities, cash and other assets of the Funds shall be placed and maintained
in the care of a member bank of the Federal Reserve System of the United States approved by
the Board as custodian and/or one or more “Eligible Foreign Custodians” (as defined in Rule
17f-5 under the Investment Company Act).
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(iii) Persons authorized by resolution of the Board shall have the right to inspect and
copy contracts, notes, vouchers, and copies of entries in books or electronic recording
media relating to the Trust’s transactions at the registered office of the Temporary
Investment Advisor at any time during normal business hours following reasonable notice to
the Temporary Investment Advisor. Such records, in relation to each transaction effected
by the Temporary Investment Advisor on behalf of the Trust, shall be maintained by the
Temporary Investment Advisor for a period of seven years from the date of each respective
transaction or such longer period as specified by applicable law.
(c) Purchase and Sale of Securities
In performing the services described above, the Temporary Investment Advisor may place orders
for the purchase or sale of securities either directly with the issuer or with any broker or dealer
(including any affiliate of the Temporary Investment Advisory, to the extent permitted by law),
provided that the Temporary Investment Advisory shall seek to obtain for the Funds the most
favorable price and execution available. The Temporary Investment Advisor may, to the extent
authorized by law, cause the Funds to pay a broker or dealer (including an affiliate of the
Temporary Investment Advisor, to the extent permitted by law) who provides brokerage and research
services an amount of commission for effecting the Funds’ investment transactions in excess of the
amount of commission another broker or dealer would have charged for effecting such transactions,
in recognition of the brokerage and research services provided by the broker or dealer. To the
extent authorized by law, the Temporary Investment Advisor shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of
such action.
2. Duties of Advisor.
(a) Provision of Information
Advisor shall advise the Temporary Investment Advisor from time to time, with respect to each
Fund, of the Fund’s investment objective, investment policies and investment restrictions and of
any changes or modifications thereto, by sending to the Temporary Investment Advisor a copy of each
registration statement and amendment thereto of the Trust relating to the Funds as filed with the
SEC and marked to show changes from the previously effective version thereof. As requested by the
Temporary Investment Advisor, Advisor shall furnish or shall cause the custodian of the Funds to
furnish, such information that it has in its possession and that is not otherwise available to the
Temporary Investment Advisor or its affiliates such information to the Temporary Investment Advisor
as to holdings, purchases, and sales of the securities under its management as will reasonably
enable the Temporary Investment Advisor to furnish its investment advice under this Agreement.
(b) Compensation to the Temporary Investment Advisor
For the services rendered, the facilities furnished and expenses assumed by the Temporary
Investment Advisor, Advisor shall pay to the Temporary Investment Advisor a fee as set forth in
Schedule B in respect of each Fund.
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3. Provision of Certain Information by Temporary Investment Advisor.
The Temporary Investment Advisor will promptly notify, and in the case of Section 3(c) provide
reasonable advance notice to, Advisor and the Funds in writing of the occurrence of any of the
following events:
(a) the Temporary Investment Advisor fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which the Temporary Investment Advisor is
required to be registered as an investment adviser in order to perform its obligations under this
Agreement;
(b) the Temporary Investment Advisor is served or otherwise receives written notice of any
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Trust; and
(c) any change in the portfolio manager of the Funds.
The Temporary Investment Advisor will keep the Funds and Advisor promptly informed of changes
at the Temporary Investment Advisor relating to its duties hereunder of which the Temporary
Investment Advisor knows would materially affect its management of the Funds, including but not
limited to any changes in the senior investment personnel assigned to the Funds’ accounts.
4. Miscellaneous.
(a) Limitation of Liability of the Temporary Investment Advisor
No warranty is given by the Temporary Investment Advisor as to the performance or
profitability of the Funds or any part of them.
The Temporary Investment Advisor will not be responsible to Advisor or the Funds or otherwise
for the solvency, actions or omissions of any counterparty, broker, dealer, market-maker, bank,
custodian or sub-custodian (each a “Fund Agent”) with whom it transacts business on Advisor’s or
the Fund’s behalf, unless Temporary Investment Advisor was grossly negligent in its selection of
such Fund Agent. The Temporary Investment Advisor shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or omission in the
performance of investment management services rendered with respect to the Funds, except for
willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder. Certain federal and state laws may
impose liabilities under certain circumstances on persons who act in good faith, and nothing herein
shall in any way constitute a waiver or limitation of any rights which the Trust or Funds may have
under any such applicable law.
(b) Indemnification.
(i) With respect to each Fund, the Advisor agrees to indemnify and hold harmless the
Temporary Investment Advisor, its employees, agents, officers, directors, affiliates, and
nominees (collectively, the “Temporary Investment Advisor Indemnified Parties”) from and
against any and all claims, demands, actions and suits and from and against any and all
judgments, liabilities, losses, damages, costs,
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charges, reasonable counsel fees and other expenses of every nature and character which
may be asserted against or incurred by any Temporary Investment Advisor Indemnified Party or
for which any Temporary Investment Advisory Indemnified Party may be held liable (a “Claim”)
arising out of or in any way relating to (i) the Temporary Investment Advisor’s performance
of it duties hereunder with respect to such Fund, except to the extent such Claim resulted
from an action or omission for which the Temporary Investment Advisor would not be entitled
to exculpation pursuant to Section 4(a) hereof or (ii) actions or omissions of the Trust,
Advisor, the Funds or any of their other agents or service providers.
(ii) With respect to each Fund, the Temporary Investment Advisor agrees to indemnify
and hold harmless the Trust, Advisor, the Funds and each of their and its employees, agents,
officers, directors, affiliates, and nominees (collectively, the “Advisor Indemnified
Parties”) from and against any Claim arising out of or in any way relating to (i) any breach
of the Temporary Investment Advisor’s obligations hereunder; (ii) actions or omissions of
the Temporary Investment Advisor for which the Temporary Investment Advisor would not be
entitled to exculpation pursuant to Section 4(a) hereof; or (iii) any material
misrepresentation under this Agreement.
(iii) This Section 4(b) shall survive the termination of this Agreement indefinitely or
until the latest date permitted by law.
(c) Compliance with Applicable Laws and Regulations
The Temporary Investment Advisor shall obtain and at all times maintain and comply with the
terms of all relevant material authorizations, licenses, consents, approvals and registrations and
comply with all relevant laws and regulations, necessary for the purpose of performing any of its
duties and obligations under this Agreement. The Temporary Investment Advisor shall promptly
inform Advisor and the Board if the Temporary Investment Advisor becomes unable to comply with the
terms of or maintain any such authorizations, licenses, consents, approvals or registrations.
(d) Compliance Program of the Temporary Investment Advisor
The Temporary Investment Advisor hereby represents and warrants that:
| (i) | in accordance with Rule 206(4)-7 under the Advisers Act, the Temporary Investment Advisor has adopted and implemented and will maintain written policies and procedures reasonably designed to prevent violation by the Temporary Investment Advisor and its supervised persons (as such term is defined in the Advisers Act) of the Advisers Act and the rules the SEC has adopted under the Advisers Act; and | ||
| (ii) | to the extent that Temporary Investment Advisor’s activities or services could affect the Funds, the Temporary Investment Advisor has adopted and implemented and will maintain written policies and procedures that are reasonably designed to prevent violation of the “federal securities laws” (as such term is defined in Rule 38a-1 under the Investment Company Act) by the Funds and the Temporary Investment Advisor (the policies and procedures referred to in this |
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Paragraph 4(d)(ii), along with the policies and procedures referred to in
Paragraph 4(d)(i), referred to herein as the Temporary Investment Advisor’s
“Compliance Program”).
(e) Records and Reports
| (iii) | The Temporary Investment Advisor will keep accurate and detailed records with respect to all receipts, investments, sales, disbursements and other transactions carried out by the Temporary Investment Advisor for a Fund. | ||
| (iv) | All records held pursuant to this clause by the Temporary Investment Advisor shall be open to inspection by Advisor or the Funds, and the Temporary Investment Advisor will provide Advisor and the Funds with such access as it itself has to records held by any relevant third party, in each case at reasonable times during business hours and upon the giving of reasonable notice by Advisor or a Fund. | ||
| (v) | The Temporary Investment Advisor will not provide Advisor with an individual trade confirmation of each portfolio transaction unless Advisor has specifically requested the Temporary Investment Advisor to do so. Any records, reports which are required to be maintained or furnished by the Temporary Investment Advisor may be maintained and delivered exclusively in electronic form. Any such record (including a scanned copy of any paper document) shall be deemed an original for all purposes and may be admitted in evidence in any action, proceeding or counterclaim related to the subject matter of this Agreement, even though the paper source document is unavailable. | ||
| (vi) | The Temporary Investment Advisor will, upon receipt of reasonable notice, provide Advisor with the transaction books and records of the Funds that are required to be maintained by the Temporary Investment Advisor relating to each fund’s transactions from the Effective Date through such Fund’s Investment Team Conversion. |
(f) Confidentiality and Disclosure
The Temporary Investment Advisor and Advisor undertake to keep private and confidential all
information acquired in connection with this Agreement, and not to disclose such information
to any person except to the extent that:
(i) the other party gives prior consent; or
(ii) disclosure is required by law, regulation, regulatory authority or court order;
(iii) disclosure to a counterparty to a transaction effected for a Fund is required as
a condition to such transaction;
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(iv) disclosure is necessary to enable the Temporary Investment Advisor to perform its
obligations under this Agreement; or
(v) the information now is or hereafter comes into the public domain without fault on
the part of the Temporary Investment Advisor.
(g) Services Not Exclusive
Nothing in this Agreement shall prevent the Temporary Investment Advisor or any officer,
employee or affiliate thereof from acting as investment advisor for any other person, firm or
corporation, or from engaging in any other lawful activity, and shall not in any way limit or
restrict the Temporary Investment Advisor or any of its officers, employees or agents from buying,
selling or trading any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting.
(h) Duration of Agreement
(i) With respect to each Fund, this Agreement shall become effective upon the later of
(a) the Closing and (b) the Reorganization of the respective Venus Business Fund into
such Fund, if, in either case, such Fund’s Investment Team Conversion has not yet been
effected (with respect to such Fund, the “Effective Date”). Following the Effective
Date in respect of a Fund, this Agreement, unless terminated pursuant to paragraph
(ii), (iii), (iv) or (v) below, shall continue in effect with respect to such Fund for
two years from such Effective Date, and thereafter shall continue in effect from year
to year, provided that its continued applicability is specifically approved at least
annually by the Board or by a vote of the holders of a majority of the outstanding
shares of such Fund. In addition, such continuation shall be approved by vote of a
majority of the Trustees who are not parties to this Agreement or interested persons
of any such party, cast in person at a meeting called for the purpose of voting on
such approval. As used in this paragraph, the term “interested person” shall have the
same meaning as set forth in the Investment Company Act.
(ii) This Agreement shall terminate with respect to any Fund upon the occurrence of
such Fund’s Investment Team Conversion and the commencement of the employment of such
Investment Team with the Adviser.
(iii) This Agreement may be terminated with respect to any or all of the Funds by
thirty (30) days’ written notice by either Advisor or the Temporary Investment Advisor
to the other party, provided that the Temporary Investment Advisor may not terminate
this Agreement with respect to any Fund prior to the end of the True-Up Period (as
defined in the Transaction Agreement). The Agreement may also be terminated at any
time, without the payment of any penalty, with respect to one or more Funds (by vote
of the Trustees or, by the vote of a majority of the outstanding voting securities of
such Fund(s)), on thirty (30) days’ written notice to both Advisor and the Temporary
Investment Advisor. This Agreement shall automatically terminate in the event of the
termination of the investment advisory agreement between Advisor and the Trust.
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(iv) This Agreement shall terminate in the event of its assignment. The term
“assignment” for this purpose shall have the same meaning set forth in Section 2(a)(4)
of the Investment Company Act.
(v) This Agreement shall terminate forthwith by notice in writing on the happening of
any of the following events:
| (1) | If Advisor or the Temporary Investment Advisor shall go into liquidation (except a voluntary liquidation for the purpose of and followed by a bona fide reconstruction or amalgamation upon terms previously approved in writing by the party not in liquidation) or if a receiver or both receiver and manager of any of the assets of either of them is appointed; or | ||
| (2) | If either of the parties hereto shall commit any breach of the provisions hereof and shall not have remedied such breach within 30 days after the service of notice by the party not in breach on the other requiring the same to be remedied. |
(v) Termination shall be without prejudice to the completion of any transactions which
the Temporary Investment Advisor shall have committed to on behalf of the Funds prior
to the time of termination. The Temporary Investment Advisor shall not effect, and the
Trust shall not be entitled to instruct the Temporary Investment Advisor to effect,
any further transactions on behalf of the Funds subsequent to the time termination
takes effect.
(vii) On the termination of this Agreement and completion of all matters referred to
in the foregoing paragraph (vi), the Temporary Investment Advisor shall deliver or
cause to be delivered to the Trust copies of all documents, records and books of the
Trust required to be maintained pursuant to Rules 31a-1 or 31a-2 under the Investment
Company Act which are in the Temporary Investment Advisor’s possession, power or
control and which are valid and in force at the date of termination.
(i) Notices
Any notice, request, instruction, or other document to be given under this Agreement by any
party hereto to the other parties shall be in writing and, if other than routine business
correspondence, delivered by (1) confirmed facsimile, (2) registered or certified mail or United
States Postal Service Express Mail®, (3) a nationally recognized overnight courier, (4)
hand, or (5) e-mail (so long as a receipt for such e-mail is requested and received). Such writing
shall be addressed to a party as set forth below, or to such other address as a party may from time
to time designate in any notice. Any notice given hereunder shall be effective upon receipt.
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[___]
If to the Temporary Investment Advisor, to:
[___]
If to Advisor, to:
[___]
(j) Choice of Law
This Agreement shall be construed according to, and the rights and liabilities of the parties
hereto shall be governed by, the laws of the United States and the State of New York, without
regard to the conflicts of laws principles thereof.
(k) Miscellaneous
This Agreement may be executed in any number of counterparts, each of which shall be deemed to
be an original and all of which together shall constitute one and the same document. Each party to
this Agreement may execute and deliver this Agreement by an executed signature page transmitted by
facsimile or electronic mail, and the same shall constitute an original for all purposes. To the
extent that any provision of this Agreement is prohibited or ineffective under applicable law, this
Agreement shall be considered amended to the minimum extent possible in order to make the Agreement
effective under applicable law (and, if the applicable law is subsequently amended or interpreted
in such manner as to make effective any provision of this Agreement that was formerly rendered
invalid, such provision shall automatically be considered to be valid from the effective date of
such amendment or interpretation. Each party hereby irrevocably consents and submits to the
exclusive personal jurisdiction of the state and federal courts located in the County of New York,
State of New York in the event of any dispute with respect to the subject matter of this Agreement
or the validity or interpretation hereof. Trial by jury in any action, proceeding or counterclaim
arising hereunder or with respect hereto is hereby waived. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof. This Agreement may not be
modified, nor any term or condition hereof waived, except in a writing signed by the party sought
to be charged therewith.
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IN WITNESS WHEREOF, the Agreement has been executed as of the date first above given.
| [IRIDIUM ADVISORS, INC.] | [MARS INVESTMENT MANAGEMENT, INC.] | |||||||
By:
|
By: | |||||||
| Title: | Title: | |||||||
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Schedule A
Funds
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Schedule B
Compensation
| Fund | Fee Rate | |
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