ADMINISTRATION AGREEMENT
This Agreement, dated as of the 5th day of March,
1997, made by and between The Bjurman Funds, (the "Trust") a business trust
operating an open-end, management investment company registered under
the Investment Company Act of 1940, as amended (the "Act"), duly organized
and existing under the laws of the State of Delaware and FPS Services, Inc.
("FPS"), a corporation duly organized and existing under the laws of the
State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue
separate series of shares representing interests in separate investment
portfolios (the "Series"), which Series are identified on Schedule "C"
attached hereto, and which Schedule "C" may be amended from time to time by
mutual agreement of the Trust and FPS; and
WHEREAS, the Parties desire to enter into an agreement whereby FPS will
provide certain administration services to the Trust on the terms and
conditions setforth in this Agreement; and
WHEREAS, FPS is willing to serve in such capacity and perform such
administrative services under the terms and conditions set forth below; and
WHEREAS, the Trust will provide all necessary information to FPS
concerning the Series so that FPS may appropriately execute its
responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. Appointment The Trust hereby appoints FPS as
administrator and FPS hereby accepts such appointment. The Trust further
agrees to appoint FPS as administrator to any additional Series which, from
time to time, may be added to the Trust.
Section 2. Duties and Obligations of FPS
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of the Trust,
FPS shall provide to each of the Series all administrative services set forth
in Schedule "A" attached hereto, which Schedule is incorporated by reference
in its entirety into this Agreement. In addition to the obligations set
forth in Schedule "A", FPS shall (I) provide its own office space,
facilities, equipment and personnel for the performance of its duties under
this Agreement; and (ii) take all actions it deems necessary to
properly execute the administrative responsibilities of the Trust.
(b) So that FPS may perform its duties under the terms of this
Agreement, the Board of Trustees of the Trust shall direct the officers,
investment advisor, distributor, legal counsel, independent accountants and
custodian of the Trust to cooperate fully with FPS and to provide such
information, documents and advice relating to the Trust as is within the
possession or knowledge of such persons provided that no such person need
provide any information to FPS if to do so would, in the reasoned opinion of
counsel to the Trust, result in the loss of any privilege or confidential
treatment with respect to such information. In connection with its duties,
FPS shall be entitled to rely, and shall be held harmless by the Trust when
acting in reasonable reliance upon the instruction, advice or any documents
provided by the Trust to FPS by any of the aforementioned persons. All fees
charged by any such persons shall be deemed an expense of the Trust.
(c) Any activities performed by FPS under this Agreement shall conform
to the requirements of:
(1) the provisions of the Act and the Securities Act of 1933, as
amended, and of any rules or regulations in force thereunder;
(2) any other applicable provision of state and federal law;
(3) the provisions of the Trust Instrument of the Trust, as
amended from time to time;
(4) any policies and determinations of the Board of Trustees of
the Trust; and
(5) the fundamental policies of the Trust as reflected in its
registration statement filed pursuant to the Act.
FPS acknowledges that all records that it maintains for the Trust are the
property of the Trust and will be surrendered promptly to the Trust upon
written request. FPS will preserve, for the periods prescribed under Rule
31a-2 under the Act, all such records required to be maintained under Rule
31a-1 of the Act.
(d) Nothing in this Agreement shall prevent FPS or any officer thereof
from acting as administrator for any other person, firm or corporation. While
the administrative services supplied to the Trust may be different than those
supplied to other persons, firms or corporations, FPS shall provide the Trust
equitable treatment in supplying services. The Trust recognizes that it will
not receive preferential treatment from FPS as compared with the treatment
provided to other FPS clients. FPS agrees to maintain the records and all
other information of the Trust in a confidential manner and shall not use such
information for any purpose other than the performance of FPS's duties under
this Agreement.
Section 3. Allocation of Expenses All costs and expenses of the
Trust shall be paid by the Trust including, but not limited to:
(a) fees paid to an investment adviser (the "Adviser");
(b) interest and taxes;
(c) brokerage fees and commissions;
(d) insurance premiums;
(e) compensation and expenses of its Trustees who are not
affiliated persons of the Adviser;
(f) legal, accounting and audit expenses;
(g) custodian and transfer agent, or shareholder servicing agent,
fees and expenses;
(h) fees and expenses incident to the registration of the shares of
the Trust under Federal or state securities laws;
(i) expenses related to preparing, setting in type, printing and
mailing prospectuses, statements of additional information,
reports and notices and proxy material to shareholders of the
Trust;
(j) all expenses incidental to holding meetings of shareholders and
Trustees of the Trust;
(k) such extraordinary expenses as may arise, including litigation,
affecting the Trust and the legal obligations which the Trust
may have regarding indemnification of its officers and
directors; and
(l) fees and out-of-pocket expenses paid on behalf of the Trust by
FPS.
Section 4. Compensation of FPS The Trust agrees to pay FPS
compensation for its services and to reimburse it for expenses, at the rates
and amounts as set forth in Schedule "B" attached hereto, and as shall be set
forth in any amendments to such Schedule "B" approved by the Trust and FPS.
The Trust agrees and understands that FPS's compensation be comprised of two
components and payable on a monthly basis as follows:
(i) an asset based fee calculated on the Trust's total assets subject to
a minimum fee calculated on the number of series and classes within each
series, which the Trust hereby authorizes FPS to collect by debiting the
Trust's custody account for invoices which are rendered for the services
performed for the applicable function. The invoices for the services
performed will be sent to the Trust after such debiting with the indication
that payment has been made; and
(ii) reimbursement of any out-of-pocket expenses paid by FPS on behalf
of the Trust, which out-of-pocket expenses will be billed to the Trust within
the first ten calendar days of the month following the month in which such
out-of-pocket expenses were incurred. The Trust agrees to reimburse FPS for
such expenses within ten calendar days of receipt of such xxxx.
For the purpose of determining fees payable to FPS, the value of the
Trust's net assets shall be computed at the times and in the manner specified
in the Trust's Prospectus and Statement of Additional Information then in
effect.
During the term of this Agreement, should the Trust seek services or
functions in addition to those outlined above or in Schedule "A" attached, a
written amendment to this Agreement specifying the additional services and
corresponding compensation shall be executed by both FPS and the Trust.
Section 5. Duration
(a) The term of this Agreement shall be for a period of two (2) years,
commencing on the date which the Trust's registration statement is declared
effective by the U.S. Securities and Exchange Commission ("Effective Date")
and shall continue thereafter on a year to year term subject to termination by
either Party set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed
for two (2) years commencing on the Effective Date of this Agreement and shall
continue thereafter subject to review and adjustment as determined by the
Parties.
(c) After the initial term of this Agreement, the Trust or FPS may give
written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice, which date
shall not be less than one hundred eighty (180) days after the date of receipt
of such notice. Upon the effective termination date, the Trust shall pay to
FPS such compensation as may be due as of the date of termination and shall
likewise reimburse FPS for any out-of-pocket expenses and disbursements
reasonably incurred by FPS to such date.
(d) If a successor to any of FPS's duties or responsibilities under
this Agreement is designated by the Trust by written notice to FPS in
connection with the termination of this Agreement, FPS shall promptly, upon
such termination and at the expense of the Trust, transfer all records which
are the property of the Trust and shall cooperate in the transfer of such
records and its duties and responsibilities under the Agreement.
Section 6. Amendment No provision of this Agreement may be
amended or modified, in any manner except by a written agreement properly
authorized and executed by FPS and the Trust.
Section 7. Applicable Law This Agreement shall be governed by the
laws of the State of California and the exclusive venue of any action
arising under this Agreement shall be Xxxxxxxxxx County, Commonwealth of
Pennsylvania.
Section 8. Authority of Signatories The Parties represent and
warrant to each other that the execution and delivery of this Agreement by
the undersigned officer of each Party has been duly and validly authorized;
and, when duly executed, this Agreement will constitute a valid and legally
binding enforceable obligation of each Party. The obligations under this
Agreement shall be binding upon the assets and property of the Trust and
shall not be binding upon any officer or shareholder of the Series
individually.
Section 9. Limitation of Liability
(a) FPS, its directors, officers, employees, shareholders and agents
shall only be liable for any error of judgment or mistake of law or for any
loss suffered by the Trust in connection with the performance of this
Agreement that result from willful misfeasance, bad faith, negligence
or reckless disregard on the part of FPS in the performance of its obligations
and duties under this Agreement.
(b) Any person, even though a director, officer, employee, shareholder
or agent of FPS, who may be or become an officer, director, employee or agent
of the Trust, shall be deemed when rendering services to such entity or
acting on any business of such entity (other than services or business in
connection with FPS's duties under the Agreement), to be rendering such
services to or acting solely for the Trust and not as a director, officer,
employee,shareholder or agent of, or under the control or direction of FPS
even though such person may receive compensation from FPS.
(c) Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless FPS, its directors, officers, employees,
shareholders and agents 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 FPS may sustain or incur or which may be asserted against
FPS by any person by reason of, or as a result of (i) any action taken or
omitted to be taken by FPS in good faith, (ii) any action taken or omitted to
be taken by FPS in good faith in reliance upon any certificate, instrument,
order or stock certificate or other document reasonably believed by FPS to be
genuine and signed, countersigned or executed by any duly authorized person,
upon the oral or written instruction of an authorized person of the Trust or
upon the opinion of legal counsel to the Trust; or (iii) any action taken in
good faith or omitted to be taken by FPS in connection with its appointment
in reliance upon any law, act, regulation or interpretation of the same even
though the same may thereafter have been altered, changed, amended or
repealed. Indemnification under this subparagraph shall not apply, however,
to actions or omissions of FPS or its directors, officers, employees,
shareholders or agents in cases of its or their willful misfeasance, bad
faith, negligence or reckless disregard of its or their duties
hereunder.
If a claim is made against FPS as to which FPS may seek indemnity under
this Section, FPS shall notify the Trust promptly after any written assertion
of such claim threatening to institute an action or proceeding with respect
thereto and shallnotify the Trust promptly of any action commenced against
FPS within ten (10) days after FPS shall have been served with a summons or
other legal process, giving information as to the nature and basis of the
claim. Failure to notify the Trust shall not, however, relieve the Trust from
any liability which it may have on account of the indemnity under this Section
9(c) if the Trust has not been prejudiced in any material respect by such
failure.
The Trust and FPS shall cooperate in the control of the defense of any
action, suit or proceeding in which FPS is involved and for which indemnity
is being provided by the Trust to FPS. The Trust may negotiate the settlement
of any action, suit or proceeding subject to FPS's approval, which shall not
be unreasonably withheld. FPS shall have the right, but not the obligation,
to participate in the defense or settlement of a claim or action, with its
own counsel, but any costs or expenses incurred by FPS in connection with,
or as a result of, such participation will be borne solely by FPS.
FPS shall have the right to participate in the defense of an action or
proceeding and to retain its own counsel, and the reasonable fees and
expenses of such counsel shall be borne by the Trust (which shall pay such
fees, costs and expenses at least quarterly) if:
(i) FPS has received an opinion of counsel stating that the
use of counsel chosen by the Trust to represent FPS would
present such counsel with a conflict of interest;
(ii) the defendants in, or targets of, any such action or
proceeding include both FPS and the Trust, and legal counsel
to FPS shall have reasonably concluded that there are legal
defenses available to it which are different from or additional
to those available to the Trust or which may be adverse to or
inconsistent with defenses available to the Trust (in which
case the Trust shall not have the right to direct the defense
of such action on behalf of FPS); or
(iii) the Trust shall authorize FPS to employ separate counsel
at the expense of the Trust. Notwithstanding anything to the
contrary herein, it is understood that the Trust shall not,
in connection with any action, suit or proceeding or related
action, suit or proceeding, be liable under this Agreement for
the fees and expenses of more than one firm.
(d) The terms of this Section 9 shall survive the termination of this
Agreement.
Section 10. Notices Except as otherwise provided in this Agreement,
any notice or other communication required by or permitted to be given in
connection with this Agreement shall be in writing, and shall be delivered in
person or sent by first class mail or by overnight delivery, postage prepaid
to the respective parties as follows:
If to The Bjurman Funds: If to FPS:
Xxxxxx X. Xxxxxxx and Associates FPS Services, Inc.
10100 Santa Xxxxxx Boulevard 3200 Horizon Drive, X.X. Xxx 00000
Xxx Xxxxxxx, XX 00000-0000 King of Xxxxxxx, XX 00000-0000
Attention: G. Xxxxxx Xxxxxxx Attn: Xxxxxxx X. Xxxxx, President
Section 11. If any part, term or provision of this Agreement is held by
any court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be construed
and enforced as if the Agreement did not contain the particular part, term
or provision held to be illegal or invalid, provided that the basic agreement
is not thereby substantially impaired.
Section 12. This Agreement shall extend to and shall be binding upon
theParties and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust
without the written consent of FPS or by FPS without the written consent
of the Trust, authorized or approved by a resolution of their respective
Boards of Directors or Trustees.
Section 13. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 14. This Agreement shall be governed by the laws of the State
of California and the exclusive venue of any action arising under this
Agreement shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 15. Section Headings Section and paragraph headings are for
convenience only and shall not be construed as part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of eight typewritten pages, together with Schedules "A", "B" and
"C," to be signed by their duly authorized officers as of the day and year
first above written.
The Bjurman Funds FPS Services, Inc.
/s/ G. Xxxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxx
____________________________________ ______________________________
By: G. Xxxxxx Xxxxxxx, Co-President By: Xxxxxxx X. Xxxxx, President
/s/ O. Xxxxxx Xxxxx, III
______________________________________
By: O. Xxxxxx Xxxxx, III, Co-President
Schedule "A"
Fund Administration Services
for
The Bjurman Funds
Additional Tasks
for Multiple Classes
I. Regulatory Compliance
A. Compliance - Federal Investment Company
Act of 1940
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts. . . . . additional liability
d. distribution (12b-1) plans. . . separate on certain
classes only
e administration contracts
f. accounting contracts
g. custody administration contracts
h. transfer agent and shareholder
services
2. Filings
a. N-SAR (semi-annual report) . . additional
reporting required
b. N-1A (prospectus), post- requires some
effective amendments and additional
suppliments ("stickers"). . . . reporting for cap
stock and financial
information
c. 24f-2 indefinate registration
of shares
d. filing fidelity bond under 17g-1
e. filing shareholder reports
under 30(b)2-1
3. Annual up-dates of biographical
information and questionnaires for
Directors/Trustees and Officers
B. Compliance - Other
1. applicable stock exchange rules
2. applicable state tax laws
Additional
Tasks for
Multiple
Classes
II. Corporate Business and Shareholder/Public Information
A. Directors/Trustees/Management
1. Preparation of meetings
a. agendas - all necessary items separate special
of compliance reports on 12b-1
and expenditures
b. arrange and conduct meetings
c. prepare minutes of meetings
d. keep attendance records
e. maintain corporate records/
minute book
B. Coordinate Proposals
1. Printers
2. Auditors
3. Literature fulfillment
4. Insurance
C. Maintain Corporate Calendars and Files separate by class
D. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications additional
questionnaires
and/or announcements
some pertinent to
only 1 class
a. distributions (dividends and
capital gains) separate
calculation for
each class
b. tax information
c. changes to prospectus
d. letters from management
e. funds' performance separate
performance
by class
4. Respond to:
a. financial press
b. miscellaneous shareholders
inquiries
c. industry questionnaires
Additional Tasks
for Multiple
Classes
E. Communications to Shareholders separate class
information for
financial highlights
table and notes
1. Coordinate printing and distribution
of annual, semi-annual reports,
and prospectus
III. Financial and Management Reporting
A. Income and Expenses
1. Expense figures calculated and
accrual levels set separate by class
2. Monitoring of expenses and expense
caps (monthly) separate by class
3. Approve and coordinate payment of
expenses
4. Checking Account Reconciliation
(monthly) and establish Fund operating
expense checking account
5. Calculation of advisory fee, 12b-1 fee
and reimbursements to fund,
(if applicable)
6. Authorize the recording and amortization
of organizational costs and pre-paid
expenses (supplied by adviser), for
start-up funds and reorganizations
7. Calculation of average net assets separate by class
8. Expense ratios calculated separate by class
B. Distributions to Shareholders
1. Projections of distribution amounts
2. Calculations of dividends and capital separate dividend
gain distributions (in conjunction with calculations
the Fund and their auditors)
a. compliance with income tax requires additional
provisions calculations
b. compliance with excise tax
provisions
c. compliance with Investment Company
Act of 1940, as amended
Additional Tasks
for Multiple
Classes
3. Book/Tax identification and adjustments
at required distribution periods
(in conjunction with the Fund and their
auditors)
C. Financial Reporting
1. Liaison between fund management,
independent auditors and printers
for shareholder reports requires additional
formatting and
review
2. Prepare of semi-annual
and annual reports to shareholders requires additional
disclosure and
reporting by class
3. 60 day delivery to shareholders
4. Preparation of semi-annual and
annual N-SAR's (Financial Data) requires additional
disclosure and
reporting by class
5. Preparation of Financial Statements
for required SEC Post-Effective
Amendments (if applicable) requires additional
disclosure and
reporting by class
6. Preparation of required performance
graph (annually)(based on management
supplied indicies) separate by class
D. Subchapter M Compliance (monthly)
1. Asset diversification test
2. Short/short test
3. Income qualification test
E. Other Financial Analysis
1. Upon request from fund management, requires additional
other budgeting and analyses can be disclosure and
constructed to meet a fund's specific reporting by class
needs (additional fees may apply)
2. Sales information, portfolio turnover
(monthly)
3. Work closely with independent requires additional
auditors on return of capital disclosure and
presentation, excise tax calculation reporting by class
Additional Tasks
for Multiple
Classes
4. Performance (total return)
calculation (monthly) separate by class
5. 1099 Miscellaneous - prepared and filed
for Directors/Trustees (annual)
6. Analysis of interest derived from various
Government obligations (annual) (if
interest income was distributed in a calendar
year)
7. Review and characterize 1099- Dividend
Forms separate by class
8. Prepare and coordinate with printer and
Account Management with printing and
mailing of 1099 Dividend Insert cards separate by class
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification
entries to ensure proper update requires additional
disclosure and
reporting by class
2. Perform various reviews to ensure
accuracy of subscription/liquidation
schedules, Accounting (the monthly
expense analysis), and Custody
(review of daily bank statements to require additional
ensure accurate expense movements) review by class
3. Review accruals and expenditures
(where applicable) separate by class
G. Preparation and distribution of monthly
operational reports to management by
10th Business Day requires additional
disclosure and
reporting by class
1. Management Statistics (Recap) separate by class
a. portfolio summary
b. book gains/losses/per share
c. net income, book income/per share
d. capital stock activity
e. distributions
2. Performance Analysis separate by class
a. total return
b. monthly, quarterly,
year to date, average annual returns
Additional Tasks
for Multiple
Classes
3. Expense Analysis separate by class
a. schedule
b. summary of due to/from adviser
c. expenses paid
d. expense cap
e. accrual monitoring
f. advisory fee
4. Short-Short Analysis
a. short-short income
x. xxxxx income (components)
5. Portfolio Turnover
a. market value
b. cost of purchases
c. net proceeds of sales
d. average market value
6. Asset Diversification Test
x. xxxxx assets
b. non-qualifying assets
7. Activity Summary separate by class
a. shares sold, redeemed and
reinvested
b. change in investment
H. Provide rating agencies statistical data as requires additional
requested (monthly/quarterly) reporting by class
I. Standard schedules for Board Package
(Quarterly) separate by class
1. Activity Summary
(III-G-7 from above)
2. Expense analysis
3. Other schedules can be provided
(additional fees may apply)
Schedule "B"
Administration Services Fee Schedule
for
The Bjurman Funds
This Fee Schedule is fixed for a period of two (2) years from the Effective
Date as that term is defined in the Agreement.
I. Subject to a minimum annual fee of $55,000 for the initial Series' first
class of shares and $12,000 for each additional separate series or class
thereof, the Trust agrees to pay FPS each month an asset based fee calculated
at the annual rate of:
.0015 On the First $ 50 Million of the Average Net Assets of the
Trust;
.0010 On the Next $ 50 Million of the Average Net Assets of the
Trust; and
.0005 Over $100 Million of the Average Net Assets of the
Trust
II. Out-of-Pocket Expenses:
The Trust will reimburse FPS Services monthly for all out-of-pocket
expenses, including postage, telecommunications (telephone and fax),
special reports, cost of XXXXX filings, Board Meeting materials, approved
record retention, transportation costs as incurred and copying and sending
materials to independent accountants for off-site audits.
III. Additional Services
Activities of a non-recurring nature including but not limited to fund
consolidations, mergers, acquisitions, reorganizations, the addition or
deletion of a series, and shareholder meetings/proxies, are not included
herein, and may be quoted separately upon request. To the extent the
Trust should decide to issue additional multiple/separate classes of
shares, additional fees will apply. Any additional/enhanced services or
reports will be quoted upon request.
IV. Blue Sky Administration
$150 per permit/per state/per year (This fee will be waived in the first
year from effective date)
NOTE: The above fee will cover normal business filings described in our
outline. An additional fee of $25 per filing will be charged for
non-standard filings such as secondary post-effective amendments,
additional classes of shares or mergers and acquisitions.
Schedule "C"
Identification of Series
Below are listed the Series and Classes of Shares to which services under
this Agreement are to be performed as of the Effective Date of this Agreement:
"The Bjurman Funds"
1. Bjurman Micro-Cap Fund
This Schedule "C" may be amended from time to time by agreement of the
Parties.
