EXHIBIT H.2
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of April 24, 2002, by and among
Private Asset Management Funds, an Ohio business trust (hereinafter referred to
as the "Trust") and Premier Fund Solutions, Inc., a corporation organized under
the laws of the State of California (hereinafter referred to as "PFS").
WHEREAS, the Trust is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each with its
own separate investment portfolio (each a "Fund");
WHEREAS, PFS is, among other things, in the business of providing fund
administration services for the benefit of its customers; and
WHEREAS, the Trust desires to retain PFS to act as Administrator for each
Fund of the Trust listed on Exhibit A attached hereto, as it may be amended from
time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Trust and PFS agree as follows:
1. Appointment of Administrator
The Trust hereby appoints PFS as Administrator of the Trust on the terms
and conditions set forth in this Agreement, and PFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. Duties and Responsibilities of PFS For Each Fund
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in PFS's or its affiliate's own
offices)
c. Non-investment-related statistical and research data as needed
3. Coordinate board communication by:
a. Establishing meeting agendas
b. Preparing board reports based on financial and administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary SEC filings relating
thereto
e. Assist in preparation of minutes of meetings of the board and
shareholders
f. Recommend dividend declarations to the Board, prepare and distribute
to appropriate parties notices announcing declaration of dividends and
other distributions to shareholders
g. Provide personnel to serve as officers of the Trust if so elected by
the Board and attend Board meetings to present materials for Board
review
4. Audits
a. Monitor appropriate schedules and assist independent auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Monitor arrangements under shareholder services or similar plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements, including:
1) Asset diversification tests 2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of Ethics for the disinterested trustees of the Fund
b. Monitor Fund's compliance with the policies and investment limitations
of the Trust as set forth in its Prospectus and Statement of
Additional Information
c. Maintain awareness of applicable regulatory and operational service
issues and recommend dispositions
2. Blue Sky Compliance
a. Monitor and file with the appropriate state securities authorities any
and all required compliance filings relating to the registration of
the securities of the Trust so as to enable the Trust to make a
continuous offering of its shares in all states
b. Monitor status and maintain registrations in each state
c. Provide information regarding material developments in state
securities regulation
3. SEC Registration and Reporting
a. Assist Trust counsel in updating Prospectus and Statement of
Additional Information and in preparing proxy statements and Rule
24f-2 notices
b. Prepare annual and semiannual reports, Form N-SAR filings and Rule
24f-2 notices
c. Coordinate the printing, filing and mailing of publicly disseminated
Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure that such shares are
properly registered with the SEC and the appropriate state authorities
g. File Rule 24f-2 notices
h. File Forms N-1A, Rule 497 filings and proxy statements as directed
4. IRS Compliance
a. Monitor Company's status as a regulated investment company under
Subchapter M, including without limitation, review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor required distributions (including excise tax distributions)
C. Financial Reporting
1. Provide financial data required by each Fund's Prospectus and
Statement of Additional Information;
2. Monitor financial reports for officers, shareholders, tax authorities,
performance reporting companies, the board, the SEC, and independent
auditors;
3. Supervise each Fund's Custodian and Accountants in the maintenance of
each Fund's general ledger and in the preparation of each Fund's
financial statements, including oversight of expense accruals and
payments, of the determination of net asset value of each Fund's net
assets and of each Fund's shares, and of the declaration and payment
of dividends and other distributions to shareholders;
4. Monitor the yield, total return and expense ratio of each class of
each Fund, and each Fund's portfolio turnover rate; and
5. Monitor the expense accruals and notify Trust management of any
proposed adjustments.
6. Monitor monthly financial statements, which will include without
limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses
7. Monitor quarterly broker security transaction summaries.
D. Tax Reporting
1. Monitor filings of appropriate federal and state tax returns
including, without limitation, Forms 1120/8610 with any necessary
schedules
2. Monitor state income breakdowns where relevant
3. Monitor Form 1099 Miscellaneous for payments to trustees and other
service providers
4. Monitor wash losses
5. Monitor calculations of eligible dividend income for corporate
shareholders
3. Compensation
The Trust, on behalf of each Fund, agrees to pay PFS for the performance of
the duties listed in this Agreement, the fees and out-of-pocket expenses as set
forth in the attached Exhibit A.
These fees may be changed from time to time, subject to mutual written
Agreement of the parties.
The Trust agrees to pay all fees and reimbursable expenses within ten (10)
business days following the receipt of the billing notice.
4. Performance of Service; Limitation of Liability
A. PFS shall exercise reasonable care in the performance of its duties
under this Agreement. PFS shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with matters
to which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond PFS's
control, except a loss arising out of or relating to PFS's refusal or failure to
comply with the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if PFS has
exercised reasonable care in the performance of its duties under this Agreement,
the Trust shall indemnify and hold harmless PFS from and against any and all
claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable attorneys'
fees) which PFS may sustain or incur or which may be asserted against PFS by any
person arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims, demands,
losses, expenses, and liabilities arising out of or relating to PFS's refusal or
failure to comply with the terms of this Agreement or from bad faith, negligence
or from willful misconduct on its part in performance of its duties under this
Agreement, (i) in accordance with the foregoing standards, or (ii) in reliance
upon any written or oral instruction provided to PFS by any duly authorized
officer of the Trust, such duly authorized officer to be included in a list of
authorized officers furnished to PFS and as amended from time to time in writing
by resolution of the Board of Trustees of the Trust.
PFS shall indemnify and hold the Trust harmless from and against any and
all claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable attorneys'
fees) which the Trust may sustain or incur or which may be asserted against the
Trust by any person arising out of any action taken or omitted to be taken by
PFS as a result of PFS's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, PFS shall take all reasonable steps to minimize
service interruptions for any period that such interruption continues beyond
PFS's control. PFS will make every reasonable effort to restore any lost or
damaged data and correct any errors resulting from such a breakdown at the
expense of PFS. PFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled to
inspect PFS's premises and operating capabilities at any time during regular
business hours of PFS, upon reasonable notice to PFS.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all reasonable care to
notify the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for indemnification. The
indemnitor shall have the option to defend the indemnitee against any claim
which may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the indemnitor
will be asked to indemnify the indemnitee except with the indemnitor's prior
written consent.
C. PFS is hereby expressly put on notice of the limitation of shareholder,
Trustee, officer, employee or agent liability as set forth in the Declaration of
Trust of the Trust and agrees that obligations assumed by the Trust pursuant to
this Agreement shall be limited in all cases to the Trust and its assets, and if
the liability relates to one or more Funds, the obligations hereunder shall be
limited to the respective assets of such Fund. PFS further agrees that it shall
not seek satisfaction of any such obligation from any shareholder of a Fund, nor
from any Trustee, officer, employee or agent of the Trust.
5. Proprietary and Confidential Information
PFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Trust all records
and other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval may not be withheld where PFS
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Trust.
6. Term of Agreement
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of one year. During the initial one year term of
this Agreement, if the Trust terminates any services with PFS, the Trust agrees
to compensate PFS an amount equal to the fees remaining under the initial one
year Agreement. Subsequent to the initial one year term, this Agreement may be
terminated by either party upon giving ninety (90) days prior written notice to
the other party or such shorter period as is mutually agreed upon by the
parties. However, this Agreement may be amended by mutual written consent of the
parties.
7. Records
PFS shall keep records relating to the services to be performed hereunder,
in the form and manner, and for such period as it may deem advisable and is
agreeable to the Trust but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act
and the rules thereunder. PFS agrees that all such records prepared or
maintained by PFS relating to the services to be performed by PFS hereunder are
the property of the Trust and will be preserved, maintained, and made available
in accordance with such section and rules of the 1940 Act and will be promptly
surrendered to the Trust on and in accordance with its request.
8. Governing Law
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of California. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
9. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
PFS's duties or responsibilities hereunder is designated by the Trust by written
notice to PFS, PFS will promptly, upon such termination and at the expense of
the Trust, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by PFS under this
Agreement in a form reasonably acceptable to the Trust (if such form differs
from the form in which PFS has maintained, the Trust shall pay any expenses
associated with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from PFS's personnel in the establishment of books, records, and other data by
such successor.
10. No Agency Relationship
Nothing herein contained shall be deemed to authorize or empower PFS to act
as agent for the Trust, or to conduct business in the name of, or for the
account of theTrust.
11. Data Necessary to Perform Services
The Trust or its agent, which may be PFS, shall furnish to PFS the data
necessary to perform the services described herein at times and in such form as
mutually agreed upon if PFS is also acting in another capacity for the Trust,
nothing herein shall be deemed to relieve PFS of any of its obligations in such
capacity.
12. Notices
Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered as follows:
Notice to PFS shall be sent to:
Premier Fund Solutions, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
and notice to the Trust shall be sent to:
Private Asset Management Funds
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
PREMIER FUND SOLUTIONS, INC
By: /s/ Xxxxxxx X. Xxxxxxxx
Its: President
PRIVATE ASSET MANAGEMENT FUNDS
By: /s/ Xxxxxxx X. Xxxxx
Its: President
Fund Administration
Fee Schedule
Exhibit A
Name Of Series Date Added
Private Asset Management Fund April 24, 2002
Annual fee based upon average assets:
7 basis points on first $200 million 5 basis points on next $500
million 3 basis points on the balance
Minimum monthly fee: $2,000
Plus out-of pocket expense reimbursements, including but not limited to:
Proxies
Special reports
Printing of Annual Prospectus, SAI, Annual and Semi-Annual Reports
Federal and state regulatory filing fees Certain insurance
premiums Expenses from board of trustees meetings Auditing
expenses Legal expenses
Fees and out-of-pocket expense reimbursements are billed monthly
