Exhibit (h)
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
ADMINISTRATIVE SERVICES AGREEMENT
Dated July 2, 2001 (Approved by Board September 11, 2000)
Pearl Mutual Funds, a Massachusetts business trust registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end diversified
management investment company (the "Trust"), and Pearl Management Company, an
Iowa corporation registered under the Investment Advisers Act of 1940 as an
investment adviser (the "Manager"), agree that:
PART A. ENGAGEMENT.
1. Engagement of the Manager for Administrative Services, Including
Transfer Agent Services.
(a) The Trust appoints the Manager to provide administrative services
as provided in Part B of this agreement, including transfer agent services as
provided in Part C of this agreement, to the Trust for its series designated
Pearl Total Return Fund and Pearl Aggressive Growth Fund (each, a "Fund"), and
the Manager accepts that appointment and agrees to perform the duties stated in
this agreement, for the period and on the terms set forth in this agreement.
(b) If the Trust establishes one or more series in addition to the
Funds named above with respect to which it desires to retain the Manager to
furnish administrative services (including transfer agent services) hereunder,
and if the Manager is willing to provide such services under this agreement, the
Trust and the Manager may add the new series to this agreement, by written
supplement (which may be in any form of amendment as defined in Section 32) to
this agreement. The supplement shall include a schedule of compensation to be
paid to the Manager by the Trust with respect to the new series and any other
mutually agreed modifications of the terms of this agreement with respect to
that series. On the effective date stated in the supplement executed by the
Trust and the Manager, that series shall become a Fund hereunder and shall be
subject to the provisions of this agreement to the same extent as the Funds
named above, except as modified by the supplement.
2. Other Services under Other Agreement. The Manager also provides
investment management services to the Trust under a separate agreement.
PART B. ADMINISTRATIVE SERVICES.
3. Scope. This Part B applies to all administrative services to be
provided by the Manager for and with respect to the Trust, except transfer agent
services described in Part C. If a particular service is or appears to be
included in both Parts B and C, it shall
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
be deemed to be an administrative service subject to Part B and not a transfer
agent service subject to Part C.
4. Administrative Services of the Manager. Subject to the overall
supervision and control of the Board, the Manager shall provide these services
for and with respect to the Trust:
(a) Maintain and retain all Trust charter documents, and file all
documents required to maintain the Trust's status as a Massachusetts business
trust and as a registered open-end investment company.
(b) Prepare and maintain the Trust's registration statement with the
Securities and Exchange Commission ("SEC").
(c) Prepare and periodically update the Prospectus and statement of
additional information for the Funds.
(d) Prepare, file with the appropriate regulatory authorities, and
disseminate various reports for the Funds, including but not limited to
semiannual reports to Shareholders under Section 30(e) of the 1940 Act, annual
and semiannual reports on Form N-SAR, and notices pursuant to Rule 24f-2 under
the 1940 Act.
(e) Arrange for all meetings of Shareholders, including: collect all
information required for preparation of proxy statements; supervise solicitation
of Shareholders and Shareholder nominees; tabulate (or supervise the tabulation)
of votes; respond to all inquiries regarding these meetings from Shareholders,
the public and the media; and prepare and retain all minutes and all other
records required to be kept in connection with these meetings.
(f) Arrange for, prepare, disseminate, and retain all materials for
meetings of the Board and its Committees and all of their minutes and other
records.
(g) Prepare and file the Trust's federal, state, and local income tax
returns and calculate any tax required to be paid.
(h) Calculate all the Trust and Fund expenses and arrange for payment.
(i) Calculate and arrange for payment of all income, capital gains, and
other distributions to Shareholders of each Fund.
(j) Determine, after consultation with Officers of the Trust, the
jurisdictions in which shares of beneficial interest of each Fund ("Shares")
shall by registered or qualified for sale, or may be sold pursuant to an
exemption from registration or
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
qualification; and prepare and maintain the registration or qualification of
the Shares for sale under the securities laws of each such jurisdiction.
(k) Provide the services of all persons designated as Officers of the
Trust by the Board and who are also Directors, Officers, or employees of
Manager.
(l) Prepare and, subject to the approval of the Trust's Chief Financial
Officer, disseminate the Trust's and each Fund's quarterly financial information
to the Board; and prepare other reports relating to the business and affairs of
the Trust and each Fund as the Trust's Officers or Board may from time to time
reasonably request.
(m) Administer the Trust's Code of Ethics and periodically report to
the Board on compliance.
(n) Provide internal legal, accounting, compliance, audit, and risk
management services and periodically report to the Board with respect to these
services.
(o) Negotiate, administer, and oversee any third party services to the
Trust which the Board or Manager deems necessary or advisable. Third party
services may include but are not limited to custody, tax, transfer agency,
disaster recovery, audit, and legal services.
(p) Negotiate and arrange for insurance desired or required of the
Trust, and administer all claims thereunder.
(q) Respond appropriately to all inquiries by regulatory agencies, and
respond when and as appropriate to inquiries by the press and the general
public, concerning the business and affairs of the Trust; respond appropriately
to any subpoena or tax levy; and oversee all periodic inspections of the
operations of the Trust and its agents by regulatory authorities.
(r) Handle and seek to resolve any complaints received by the Trust
from Shareholders, regulatory authorities, and the general public.
(s) Monitor legal, tax, regulatory, and industry developments related
to the business affairs of the Trust and communicate these developments to the
Officers and Board as they may reasonably request or as deemed appropriate.
(t) Administer the operating policies of the Trust and recommend to the
Officers and the Board any appropriate modifications to these policies to
facilitate the protection of Shareholders or market competitiveness of the Trust
and the Funds, or to comply with new legal or regulatory requirements.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
(u) When and as appropriate, respond to surveys conducted by third
parties and report each Fund's performance and other portfolio information.
(v) When and as appropriate, file claims (which may include class
actions) involving portfolio securities, and handle administrative matters in
connection with the litigation or settlement of these claims.
5. Standard of Care. To the extent permitted by applicable law, neither the
Manager nor any of its Directors, Officers, agents, or employees shall be liable
directly or indirectly to the Trust or its Shareholders for any loss suffered by
the Trust or its Shareholders as a result of any error of judgment, or as a
consequence of any other act or omission of the Manager in the performance of
its duties under this agreement, except for liability resulting from willful
misfeasance, bad faith, or gross negligence on the part of the Manager or by
reason of reckless disregard by the Manager of its obligations and duties under
this agreement. This Section 5 does not apply to Part C of this agreement but
applies to all other provisions of this agreement.
PART C. TRANSFER AGENT SERVICES.
6. Transfer Agent Services of the Manager. Subject to the overall
supervision and control of the Trust's Board of Trustees (the "Board"), the
Manager shall provide the services described in this Part C for and with respect
to the Trust. The Manager's appointment and duties include service as transfer
agent for all of the Shares and as Shareholder servicing agent for the Trust.
7. Representation of Manager. The Manager represents and warrants to the
Trust that it is duly registered as a transfer agent as provided in section
17A(c) of the Securities Exchange Act of 1934.
8. Representations of the Trust. The Trust represents and warrants to the
Manager that it is and will continue to be authorized to issue an unlimited
number of Shares. When Shares are hereafter issued in accordance with the terms
of sale in the Prospectus, all such Shares shall be validly issued, fully paid,
and nonassessable by the Trust.
9. General Transfer Agent Duties of the Manager.
(a) The Manager shall be responsible for administering and performing
the functions required for the Shares, for acting as service agent in connection
with dividends and distributions on the Shares, and for performing Shareholder
account administrative agent functions in connection with the issuance,
transfer, and redemption or repurchase (including coordination with the
Custodian) of the Shares. The details of the operating standards and procedures
to be followed shall be determined from time to
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
time by agreement between the Manager and the Trust (and, where appropriate, the
Custodian).
(b) The Manager shall maintain records of the name of each registered
owner of Shares, the number of Shares (to the nearest one-thousandth of a Share)
owned by such registered owner and in the aggregate by all registered owners,
and, to the extent it is able to do so, the address and tax identification
number of each registered owner. The Manager shall maintain a stop transfer
record when necessary.
(c) The Manager shall address and mail all communications by the Trust
to its Shareholders, including reports to Shareholders, dividend and
distribution notices, and notices of and proxy materials for meetings of
Shareholders.
(d) The Manager shall investigate all Shareholder inquiries relating
to accounts of the respective Shareholders; and shall answer all correspondence
from Shareholders, and to the extent appropriate, from securities brokers and
others, relating to its duties hereunder, and any other correspondence that may
be agreed upon from time to time between the Trust and the Manager.
(e) The Manager shall furnish the Trust with reports of registration
of ownership of Shares; all periodic and special reports that the Trust may
reasonably request and the Manager can reasonably provide; and any other
information, including Shareholder lists and statistical information concerning
Shareholder accounts, that may be agreed upon from time to time between the
Trust and the Manager.
(f) In connection with all meetings of Shareholders, the Manager shall
prepare lists of Shareholders, shall mail to the Shareholders notices of the
meetings and proxy materials, shall furnish to the Trust affidavits of mailings,
shall process and tabulate the voting instructions of the proxies returned by or
for Shareholders, shall report to the Trust on such returns and tabulations,
shall report at each meeting on the number of Shares represented at the meeting
by proxy and (separately) by Shareholders in person, shall act as teller at the
meeting, and shall certify the voting of holders of Shares.
10. Sales of Fund Shares.
(b) The Manager shall, upon receipt by it of a check or other medium
of payment identified by it as funds or a claim of funds in payment of the
purchase price for sales of Shares (and, if necessary, payable or endorsed to
the Manager as agent for, or identified as being for the account of, the Fund),
promptly deposit the check or other payment to the appropriate account postings
necessary to reflect the sale according to arrangements to be made between it
and the Custodian. The Manager shall notify the Fund or its designee and the
Custodian of all purchases and related account adjustments.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
(c) Upon receipt of the notification required under Paragraph 10(a),
the Manager shall issue to the purchaser a confirmation of the information
received under Paragraph 10(a) (including, if needed, a request for additional
information needed for the account records).
(d) Upon the issuance of any Shares in accordance with the foregoing
provisions of this Section, the Manager shall not be responsible for the payment
of any original issue or other taxes required to be paid by a Fund in connection
with such issuance.
(e) The Manager may establish any additional rules and regulations
governing the transfer or registration of certificates for Shares that it may
deem advisable and that are consistent with rules and regulations generally
adopted by bank transfer agents, except as it may be instructed otherwise by an
Officer.
11. Failure of Payment. In the event that any check or other order for the
payment of the price of Shares sold by a Fund is for any reason not paid upon
demand for payment, the Manager shall (1) give prompt notice to the Trust or its
designee of the failure of payment; (2) place a stop transfer order against all
Shares that were to have been issued in consideration for the failed payment;
and (3) take any other steps that the Manager may, in its discretion, deem
appropriate or that the Trust or its designee may instruct.
12. Redemptions. The Manager shall duly process demands by Shareholders
for redemption of Shares, but only in accordance with the requirements and
procedures stated in the Prospectus, except as and to the extent waived or
otherwise specified by an Officer for any specific redemption.
13. Transfers and Exchanges. The Manager shall duly process transfers of
registered ownership of Shares, but only in accordance with the requirements and
procedures stated in the Prospectus applicable to redemptions (modified, if
necessary, to accommodate any difference between a transfer and a redemption),
except as and to the extent waived or otherwise specified by an Officer for any
specific transaction.
14. Right to Seek Assurances. The Manager reserves the right not to
process a transfer or redemption of Shares until it is satisfied that the
requested transfer or redemption is legally authorized. It shall incur no
liability for the refusal, in good faith, to make transfers or redemptions which
the Manager, in its judgment, deems improper or unauthorized, or until it is
satisfied that there is no basis for any claim adverse to the transfer or
redemption. The Manager may, in effecting transfers, rely upon the provisions of
applicable law (including but not limited to the Uniform Commercial Code of
Iowa) which in the opinion oflegal counsel for the Trust or of its own legal
counsel protect it in not requiring certain documents in connection with the
transfer or
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
redemption of Shares; and the Trust shall indemnify the Manager for any act done
or omitted by it in reliance upon any such law or opinion of counsel of the
Trust or of its own counsel.
15. Distributions.
(a) Each Fund shall promptly notify the Manager of the declaration of
any dividend or other distribution on Shares. The Fund shall furnish to the
Manager a resolution of the Board certified by the Secretary declaring a
dividend or distribution of a specified amount per Share or in the aggregate (or
specifying the formula or method for determining the amount), the medium of
payment if payable other than in United States dollars, and the record date and
the payable date of the distribution if the declaration is in an aggregate
amount. In the event that the amount of the dividend or distribution is declared
in the aggregate, then promptly after the record date the Trust shall furnish to
the Manager a Certificate or Written Instruction stating the per-share
equivalent of the aggregate amount as of the record date.
(b) The Manager shall, on or before the payable date of any dividend
or distribution, notify the Custodian of the estimated amount of cash required
to pay the dividend or distribution. On or before the mailing date of the
dividend or distribution, the Trust shall instruct the Custodian to place in a
dividend disbursing account (or to hold available in another appropriate manner)
funds equal to the cash amount to be paid. As of the reinvestment date
designated by the Board, the Manager shall record in the Share accounts of those
registered Shareholders whose dividends or distributions are to be reinvested in
Shares the number and price of the Shares so acquired priced at the applicable
net asset value. The Manager shall calculate, prepare (or arrange for the
Custodian to prepare), and mail checks to Shareholders whose dividends and other
distributions are to be received by them in money.
(c) The Manager shall replace lost checks upon receipt of properly
executed affidavits, and shall maintain stop payment orders against replaced
checks.
(d) The Manager shall not be liable for the propriety of payments made
in accordance with resolutions of the Board.
(e) If the Custodian does not make available sufficient cash to make
payment to all Shareholders as of the record date, the Manager shall, upon
notifying the Trust, withhold payment to all Shareholders of record as of the
record date until sufficient cash is made available.
16. Taxes. The Manager shall file appropriate information returns with the
proper federal, state, and local authorities as required by applicable law to be
filed by the Trust concerning the payment of dividends and capital gains
distributions, and shall withhold any amounts required to be withheld by
applicable law.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
17. Records of Shareholder Accounts. The Manager shall maintain records
showing for each Shareholder's account: (a) names, addresses, and tax
identification numbers; (b) numbers of Shares held; (c) historical information
regarding the account each Shareholder, including dividends and distributions
paid and date and price of all transactions in a Shareholder's account; (d) any
stop or restraining order placed against a Shareholder's account; (e)
information on withholdings; (f) any instruction regarding cash payment or
reinvestment of dividends or capital gains distributions; (g) any plan
application, dividend address, and correspondence relating to the current
maintenance of a Shareholder's account; (h) any information required in order
for the Manager to perform the calculations contemplated or required by this
agreement; and (i) any other information and data required by applicable law.
See Section 29.
18. Reliance by Manager; Instructions.
(a) The Manager shall be protected in acting upon any paper or
document believed by it to be genuine and to have been signed by an Authorized
Person, and shall not be held to have any notice of any change of authority of
any person until receipt of a Certificate from the Trust. The Manager shall also
be protected in processing Share certificates that it reasonably believes to
bear the proper manual or facsimile signatures of the Officers of the Trust, but
shall be responsible for the proper countersignature of the Manager as transfer
agent.
(b) At any time the Manager may apply to any Authorized Person of the
Trust for Written Instructions and, at the Trust's expense, may seek advice from
legal counsel for the Trust or its own legal counsel, with respect to any matter
arising in connection with this agreement. The Manager shall not be liable for
any action taken or not taken or permitted by it in good faith in accordance
with Written Instructions or with the opinion of such counsel and, apart from
that, in the exercise of reasonable care. In addition, the Manager and its
Officers, agents, or employees shall accept instructions or requests given to
them by any person representing or acting on behalf of the Trust only if that
representative is known by the Manager (or one of its Officers, agents, or
employees) to be an Authorized Person. The Manager shall have no duty or
obligation to inquire into, nor shall the Manager be responsible for, the
legality of any act done by it upon the request or direction of any Authorized
Person of the Trust.
(c) Notwithstanding any other provisions of this agreement, the
Manager shall be under no duty or obligation to inquire into, and shall not be
liable for: (1) the legality of the issue or sale of any Shares of a Fund, or
the sufficiency of the amount to be received therefor; (2) the legality of the
redemption of any Shares of a Fund, or the propriety of the amount to be paid
therefor; (3) the legality of the declaration or issue of any dividend or
distribution by a Fund; (4) the legality of the issue of any Shares of a Fund in
payment or reinvestment of any dividend or distribution; or (5) the legality of
any recapitalization or readjustment of the Shares of a Fund.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
19. Standard of Care and Indemnification under this Part C.
(a) The Manager may, in connection with Part C of this agreement,
employ agents or attorneys in fact or both, and shall not be liable for any
loss arising out of or in connection with its actions (which includes the
actions of its agents and attorneys in fact) under Part C of this agreement so
long as it (which includes its agents and attorneys in fact) acts in good faith
and with due diligence and is not negligent or guilty of any willful
misconduct.
(b) The Trust shall indemnify and hold harmless the Manager from and
against any and all claims, demands, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature which the Manager may
sustain or incur or which may be asserted against the Manager by any person by
reason of, or as a result of: (1) any action taken or omitted to be taken by
the Manager in good faith in reliance upon any Certificate, instrument, order,
or stock certificate believed by it to be genuine and to be signed,
countersigned, or executed by any duly authorized person, or upon the Oral
Instructions or Written Instructions of an Authorized Person of the Trust, or
upon the opinion of legal counsel for the Trust or its own counsel; or (2) any
action taken or omitted to be taken by the Manager in good faith in reliance
upon any law, act, regulation, or interpretation even though the same may
thereafter have been altered, changed, amended, or repealed. However,
indemnification hereunder shall not apply to actions or omissions of the
Manager or its Directors, Officers, employees, or agents in case of its own
negligence, willful misconduct, bad faith, or reckless disregard of its or
their own duties under Part C of this agreement.
(c) The Manager shall indemnify and hold harmless the Trust from and
against any and all claims, demands, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature which the Trust may
sustain or incur or which may be asserted against the Trust by any person by
reason of, or as a result of, the negligence or misconduct of the Manager or
its agents or contractors. However, indemnification hereunder shall not apply
to actions or omissions of the Trust or its Trustees, Officers, employees, or
agents in case of its own negligence, willful misconduct, bad faith, or
reckless disregard of its own or their own duties under Part C of this
agreement.
20. Security. The Manager represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Manager has implemented
with regard to safeguarding from loss or damage attributable to fire, theft, or
any other cause (including provision for twenty-four hours a day restricted
access) the Trust's blank checks (if in the Manager's possession), records, and
other data and the Manager's records, data, equipment, facilities, and other
property used in the performance of its obligations under Part C of this
agreement are adequate and that it will make any changes therein from time to
time that in its judgment are required for the
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
secure performance of its obligations under Part C of this agreement. The
parties shall review such procedures and systems on a periodic basis.
PART D. GENERAL PROVISIONS.
21. Manager's General Responsibilities. The Manager shall comply with the
1940 Act, 1933 Act, and all applicable rules and regulations of the Securities
and Exchange Commission; the provisions of the Internal Revenue Code applicable
to the Funds as regulated investment companies; the policies, restrictions, and
other statements concerning the Funds in the Trust's Declaration of Trust,
Bylaws, and registration statements under the 1940 Act and 1933 Act; and policy
decisions and procedures adopted by the Board from time to time.
22. Compensation of the Manager. For the services to be rendered and the
expenses to be assumed and to be paid by the Manager under this agreement, the
Trust shall pay to the Manager monthly fees based on each Fund's net assets at
the beginning of the month. The fees attributable to each Fund shall be a
separate charge to that Fund and shall be the several (and not joint or joint
and several) obligation of that Fund. The monthly fee rates shall be one-twelfth
of these annual rates:
Pearl Total Return Fund:
Net Assets Fee (Annual Rate)
---------- ----------------
First $30 million 0.21%
In excess of $30 million to $100 million 0.19%
In excess of $100 million 0.13%
Pearl Aggressive Growth Fund:
Net Assets Fee (Annual Rate)
---------- ----------------
First $30 million 0.21%
In excess of $30 million to $100 million 0.19%
In excess of $100 million 0.13%
23. Status of the Manager. For all purposes the Manager is and shall be
deemed to be an independent contractor and not an agent of the Trust and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Trust in any way.
24. Services of the Manager Not Exclusive. The services of the Manager to
the Trust under this agreement are not exclusive. The Manager shall be free to
render similar services to others so long as its services under this agreement
are not impaired.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
25. Provision of Services through Manager's Personnel or Third Parties.
(a) The services to be provided under this agreement by the Manager
may be provided through the Manager's Directors, Officers, and employees,
subject to compliance with applicable law. The Manager shall supervise and
remain fully responsible for the services of all such persons in accordance
with and to the extent provided by this Agreement.
(b) To the extent deemed appropriate by the Manager, some of the
services to be provided under this agreement by the Manager may be provided
through third parties selected by the Manager, subject to the Board's approval
and subject to compliance with applicable law. The Manager shall supervise and
remain fully responsible for the services of all such third parties in
accordance with and to the extent provided by this Agreement. All costs and
expenses associated with services provided by any such third parties shall be
borne by them or by the Manager.
26. Relationships of Trust, Manager, and Their Personnel. It is understood
and expected that some or all of Manager's Directors, Officers, and employees
may be interested in the Trust as Trustees, Officers, employees, agents,
Shareholders, or otherwise. The existence of any such relationships, and the
fact that any one or more of the Trust's Trustees, Officers, employees, agents,
or Shareholders is or may be an affiliated person of the Manager (as defined in
the 1940 Act), shall not affect the validity of this agreement. The Trust, the
Manager, and all persons referred to in this Section shall comply fully with
applicable law.
27. Customers of Financial Institutions. The Manager may, but shall not be
obligated to, make payments from its own resources to financial institutions
(which may include banks, broker-dealers, record keepers, administrators, and
others) that provide, either directly or through agents, administrative and
other services with respect to Shareholders who are customers of those
institutions, including but not limited to establishing Shareholder accounts;
assisting with respect to recording purchase and redemption transactions;
advising Shareholders about the status of their accounts, current total return
or yield, and dividends declared; and related services that the Shareholders or
the Funds may reasonably request.
28. Confidentiality. The Manager shall treat confidentially and as
proprietary information of the Trust all records and other information relating
to the Trust or to prior, present, or potential Shareholders of the Trust, and
shall not use such records or information for any purpose other than in the
performance of its responsibilities and duties under this agreement and any
other agreement between the Trust and the Manager, except (a) after prior
notification to and approval by the Trust, (b) when so requested by the Trust,
or (c) as required by applicable law. In the case of any disclosure pursuant to
applicable law, the Manager shall, to the extent it is reasonably
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
able to do so, provide the Trust with prior notice in order to allow the Trust
to decide whether to contest the request, requirement, or order.
29. Records. In compliance with applicable law (including but not limited
to Section 31(a) of the 1940 Act and Rule 31a-3 under the 1940 Act), the
Manager shall create and maintain all necessary records (including but not
limited to those specified in Section 17 of this agreement) relating to its
services under this agreement and any other agreement between the Trust and the
Manager. "Records" includes but is not limited to data. All records that the
Manager creates and maintains pursuant to this agreement are the property of
the Trust, and the Manager shall make them available during regular business
hours for reasonable audit, inspection, and use by the Trust and any person
designated by the Trust. In addition, upon reasonable notice by the Trust, the
Manager shall make available during regular business hours its facilities and
premises employed in connection with its performance of this agreement for
reasonable visitation by the Trust and any person retained by the Trust. The
Manager shall deliver promptly to the Trust any of such records upon the
Trust's request, and the Manager at its option and at any time may deliver to
the Trust any of such records, but the Manager may make and keep copies. The
Manager shall preserve for the periods and in the places prescribed by
applicable law (including but not limited to Rule 31a-2 under the 0000 Xxx) the
records required to be maintained by applicable law (including but not limited
to Rules 31a-1 and 31a-2 under the 1940 Act). The Trust's rights and the
Manager's duties under this Section shall continue after termination of this
agreement.
30. Effective Date, Duration, and Continuance.
(a) This agreement shall become effective as of the date on which the
Trust's registration of its Shares under the 1933 Act on Form N-1A becomes
effective under that Act (the "Effective Date").
(b) For the calendar month in which the Effective Date occurs, the
Manager's monthly fee shall be determined on a prorated basis.
(c) Unless terminated as provided in Section 31, this agreement shall
continue in effect as to each Fund through the First Continuance Date. If the
Effective Date is on or before January 30, 2001, the First Continuance Date is
October 31, 2002. If the Effective Date is after January 30, 2001, the First
Continuance Date is January 31, 2003. This agreement shall continue in effect
thereafter from year to year, but only so long as its continuance is
specifically approved at least annually, either (1) by the Board, including by a
majority of those Trustees who are not interested persons of the Trust or of the
Manager, voting in person at a meeting called for the purpose of voting on such
approval, or (2) by vote of the holders of a majority of the outstanding Shares
of that Fund.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
31. Termination. This agreement may be terminated as to a Fund at any
time, without payment of any penalty, either (a) by the Board or (b) by vote of
the holders of a majority of the outstanding Shares of that Fund, upon 60 days'
written notice to the Manager. This agreement may be terminated by the Manager
at any time, without payment of any penalty, upon one year's written notice to
the Trust. This agreement shall terminate automatically in the event of its
assignment as defined in Section 2(a)(4) of the 1940 Act. Upon termination of
this agreement in any manner, including but not limited to failure to obtain
the required approval of its continuance, the obligations of both parties shall
continue to the close of the effective date of termination, and the Manager's
fees and any other appropriate amounts shall be prorated to the close of the
effective date of termination.
32. Amendment. This agreement shall not be amended in any manner except by
a written agreement executed by both parties to this agreement. (In this
agreement, "amendment" and "amended" include modification, revision,
restatement, addendum, and supplement.) In addition, this agreement shall not
be amended in any manner without approval by the Board, including by a majority
of those Trustees who are not interested persons of the Trust or of the
Manager, voting in person at a meeting called for the purpose of voting on such
approval.
33. Non-Liability of Trustees and Shareholders. All obligations of the
Trust hereunder shall be binding only upon the assets of the Trust (or the
appropriate Fund) and shall not be binding upon any Trustee, Officer, employee,
agent, or Shareholder of the Trust. Neither the authorization of any action by
the Trustees or Shareholders of the Trust nor the execution of this agreement
on behalf of the Trust shall impose any liability upon any Trustee, Officer, or
Shareholder of the Trust.
34. Use of the Manager's Name. The Manager consents to the use by the
Trust and each Fund of the name "Pearl" so long as this agreement remains in
effect. If and when this agreement is no longer in effect, the Trust and each
Fund shall cease to use that name or any name indicating that it is managed by,
advised by, or otherwise associated with the Manager. The Manager reserves the
right to use that name and to permit other persons, firms, corporations, and
investment companies to use that name.
35. Documents. The Trust shall, on or before the Effective Date, file with
the Manager a copy of each of these documents, as then in effect:
(a) The Declaration of Trust.
(b) The By-Laws of the Trust.
(c) The Board's resolution authorizing this agreement.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
(d) All account application forms and other documents relating to
Shareholder accounts or relating to any plan, program, or service offered by
the Trust relating to the sale, holding, or redemption of Shares.
36. Additional Documents. The Trust shall also furnish promptly to the
Manager from time to time a copy of each of these documents:
(a) Each registration statement filed with the SEC, and all related
amendments and orders relating to the sale of Shares.
(b) Each amendment to the Declaration of Trust and to the By-Laws of
the Trust.
(c) Each resolution of the Trustees designating Authorized Persons to
give instructions to the Manager.
(d) A Certificate of any change in any Trustee or Officer of the
Trust.
(e) Each change in, addition to, or replacement for any of the
documents referred to in Section 35.
(f) All other Certificates, documents, and opinions that may mutually
be deemed necessary or appropriate for the proper performance of the Manager's
duties.
37. Notices.
(a) Any notice (including but not limited to any demand, change of
name or address, or other communication) to be given in connection with this
agreement shall be given in writing and shall be given by personal delivery, by
registered or certified mail, or by transmittal by facsimile or other electronic
medium addressed to the recipient as follows (modified to reflect any applicable
notice of change given in accordance with this Section):
If to the Manager: Pearl Management Company
Attention: President
0000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 2001
If to the Trust: Pearl Mutual Funds
Attention: President
0000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxx, Xxxx & Xxxxx LLC
Attention: Xxxxx X. Xxxxxx
Three First Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
(b) All notices shall be conclusively deemed to have been given on
(1) the day of actual physical delivery, (2) if given by registered or
certified mail, on the fifth business day following deposit in the mail, or (3)
if given by facsimile or other electronic medium, on the day of transmittal.
38. Governing Law. This agreement shall be construed and interpreted in
accordance with the laws of the State of Iowa and the laws of the United States
of America applicable to contracts executed and to be performed therein. This
agreement shall be construed to comply with the 1940 Act, the 1933 Act, and the
Investment Advisers Act of 1940.
39. Definitions. Wherever used in this agreement, these words and phrases
have these meanings unless the context otherwise requires:
(a) "1940 Act" means the Investment Company Act of 1940 and the rules
and regulations of the SEC thereunder.
(b) "1933 Act" means the Securities Act of 1933 and the rules and
regulations of the SEC thereunder.
(c) "Applicable law" includes all appropriate sources of applicable
law, including but not limited to applicable statutes, regulations, rules,
judicial decisions, and administrative decisions, orders, and rulings.
(d) "Authorized Person" includes any one of the Chairman, the
President, any Vice President, the Secretary or any Assistant Secretary, and the
Treasurer or any Assistant Treasurer of the Trust, or any other person, whether
or not person is an
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
Officer or employee of the Trust, duly authorized to give Oral Instructions and
Written Instructions on behalf of the Trust as indicated in a Certificate.
(e) "Board" or "Board of Trustees" means the Board of Trustees of the
Trust. "Trustees" means all Trustees holding that office at the pertinent time,
in accordance with the Declaration of Trust.
(f) "Certificate" means any notice, instruction, or other written
instrument, authorized or required by this agreement to be given to the
Manager, which is actually received by the Manager and signed on behalf of the
Trust by any two of its Officers.
(g) "Custodian" means the custodian of the securities and money owned
by the Trust, which shall be First National Bank of Muscatine unless and until
the Manager shall receive a Certificate otherwise.
(h) "Declaration of Trust" means the Declaration of Trust of the Trust
as it may be amended from time to time.
(i) "Fund" means any one or more of Pearl Total Return Fund (a series
of the Trust), Pearl Aggressive Growth Fund (a series of the Trust), and any
other series of the Trust added to this agreement by written supplement in
accordance with Paragraph 1(b).
(j) "Interested persons" means interested persons as defined in Section
2(a)(19) of the 1940 Act.
(k) "Majority of the outstanding Shares" of a Fund means, with respect
to that Fund, the same as "vote of a majority of the outstanding voting
securities of a company" as defined in Section 2(a)(42) of the 1940 Act.
(I) "Manager" means Pearl Management Company, an Iowa corporation.
(m) "Officer" means the Chairman, the President, any Vice President,
the Secretary, and the Treasurer of the Trust. However, this definition of
"Officer" applies only in Part C of this agreement and in the definition of
"Certificate".
(n) "Oral Instructions" means instructions orally communicated and
actually received by the Manager from an Authorized Person or from a person
reasonably believed by the Manager to be an Authorized Person.
(o) "Prospectus" means the prospectus of the Trust relating to the
Trust's Shares that became effective most recently under the 1933 Act, and as
it may subsequently have been supplemented.
ADMINISTRATIVE SERVICES AGREEMENT Pearl Mutual Funds July 2, 200l
(p) "SEC" means the Securities and Exchange Commission.
(q) "Shares" means shares of beneficial interest, of no par value, of
each Fund.
(r) "Shareholder" means a registered owner of Shares.
(s) "Trust" means Pearl Mutual Funds, a Massachusetts business trust.
(t) "Written Instruction" means a written communication actually
received by the Manager from an Authorized Person or from a person reasonably
believed by the Manager to be an Authorized Person, by any system or method
through which the receiver of the communication is able to verify (through
codes or otherwise) with a reasonable degree of certainty the authenticity of
the sender of the communication.
(u) All references in this agreement to any law, statute, regulation,
or rule include all amendments from time to time and any successor provision
adopted from time to time.
(v) Other words and phrases used in this agreement which are defined in
the 1940 Act shall have the same meaning as defined in the 1940 Act.
Executed at Muscatine, Iowa, as of the date first stated above. This agreement
is executed in multiple counterparts, each of which shall be deemed to be an
original; but all counterparts together shall constitute only one instrument.
PEARL MUTUAL FUNDS
By /s/ Xxxxx X. Xxxxxxx
---------------------
Xxxxx X. Xxxxxxx
President
PEARL MANAGEMENT COMPANY
By /s/ Xxxxxx X. Xxxx
---------------------
Xxxxxx X. Xxxx
Executive Vice President
