ADMINISTRATIVE AGREEMENT
AGREEMENT made this 11th day of June 1999, between ACTIVA MUTUAL FUND
TRUST, a Delaware business trust (the "Trust") and each series of the Trust (the
"Funds") and ACTIVA ASSET MANAGEMENT, LLC, a Michigan LLC (the "Administrator").
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree with respect to each Fund:
1. DUTIES OF THE ADMINISTRATOR.
The Trust hereby employs the Administrator to act as
administrator of the Fund and to administer its affairs,
subject to the supervision of the Trustees of the Trust, for
the period and on the terms set forth in this Agreement.
The Administrator hereby accepts such employment, and
undertakes to afford to the Trust the advice and assistance of
the Administrator's organization in the administration of the
Fund as identified on Schedule A; to furnish for the use of
the Fund office space and office facilities, equipment and
personnel for providing the services specified in Schedule A
and to pay the salaries and fees of all Trustees of the Trust.
The Administrator shall for all purposes herein be deemed to
be an independent contractor and shall, except as otherwise
expressly provided or authorized, have no authority to act for
or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
Notwithstanding the foregoing, the Administrator
shall not be deemed to have assumed any duties with respect
to, and shall not be responsible for, the management of the
Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares
of the Fund, nor shall the Administrator be deemed to have
assumed or have any responsibility with respect to functions
specifically assumed by any transfer agent, custodian or
shareholder servicing agent of the Trust or the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES.
The Administrator shall pay the entire salaries and
fees of all of the Trust's Trustees and officers who devote
part or all of their time to the affairs of the Administrator,
and the salaries and fees of such persons shall not be deemed
to be expenses incurred by the Trust for purposes of this
Section 2. Except as provided in the foregoing sentence, the
Administrator shall not pay any expenses relating to the Trust
or the Fund including, without implied limitation,
(i) expenses of maintaining the Fund and continuing its
existence,
(ii) registration of the Trust under the Investment
Company Act of 1940,
(iii) commissions, fees and other expenses connected with
the acquisition, disposition and valuation of
securities and other investments,
(iv) auditing, accounting and legal expenses,
(v) taxes and interest,
(vi) governmental fees,
(vii) expenses of issue, sale, repurchase and redemption
of shares,
(viii) expenses of registering and qualifying the
Trust, the Fund and its shares under federal
and state securities laws and of preparing and
printing prospectuses for such purposes and for
distributing the same to shareholders and investors,
expenses of reports and notices to shareholders and
of meetings of shareholders and proxy solicitations
therefore,
(ix) expenses of reports to governmental officers and
commissions,
(x) insurance expenses,
(xi) association membership dues,
(xii) fees, expenses and disbursements of
custodians and subcustodians for all
services to the Fund (including without
limitation safekeeping al funds, securities
and other investments, keeping of books and
accounts and determination of net asset values),
(xiii) fees, expenses and disbursements of transfer
agents, dividend disbursing agents,
shareholder servicing agents and registrars
for all services to the Fund,
(xiv) expenses for servicing shareholder accounts,
(xv) any direct charges to shareholders approved by the
Trustees of the Trust, and
(xvi) such nonrecurring items as may arise,
including expenses incurred in connection
with litigation, proceedings and claims and
the obligation of the Trust to indemnify its
Trustees and officers with respect thereto.
3. COMPENSATION OF THE ADMINISTRATOR.
For services to be rendered by the Administrator
provided herein, each series of the Trust shall pay to the
Administrator a fee, payable quarterly, at the annual rate of
.15% of average daily net assets. The fee for the Value series
shall be effective beginning September 1, 1999.
4. OTHER INTERESTS.
It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become
interested in the Administrator as trustees, officers,
employees, shareholders or otherwise and that trustees,
officers, employees and shareholders of the Administrator are
or may be or become similarly interested in the Fund, and that
the Administrator may be or become interested in the Fund as
shareholder or otherwise. It is also understood that trustees,
officers, employees and shareholders of the Administrator may
be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or
entities (including, without limitation, other investment
companies) which the Administrator may organize, sponsor or
acquire, or with which it may merge or consolidate or any
combination thereof as part of their name, and that the
Administrator or its subsidiaries or affiliates may enter into
advisory or management or administration agreements or other
contracts or relationships with such other companies or
entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR.
The services of the Administrator to the Trust and
the Fund are not to be deemed to be exclusive, the
Administrator being free to render services to others and
engage in other business activities. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard
of obligations or duties hereunder on the part of the
Administrator, the Administrator shall not be subject to
liability to the Trust or the Fund or to any shareholder of
the Fund for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses
which may be sustained in the acquisition, holding or
disposition of any security or other investment.
6. SUB-ADMINISTRATORS.
The Administrator may employ one or more
sub-administrators from time to time to perform such of the
acts and services of the Administrator and upon such terms and
conditions as may be agreed upon between the Administrator and
such sub-administrators and approved by the Trustees of the
Trust.
7. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon the date
of its execution, and, unless terminated as herein provided,
shall remain in full force and effect through and including
March 31, 2000 and shall continue in full force and effect
indefinitely thereafter, but only so long as such continuance
after March 31, 2000 is specifically approved at least
annually (i) by the Board of Trustees of the Trust and (ii) by
the vote of a majority of those Trustees of the Trust who are
not interested persons of the Administrator or the Trust.
Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Agreement without
the payment of any penalty, by action of Trustees of the Trust
or the trustee of the Administrator, as the case may be, and
the Trust may, at any time upon such written notice to the
Administrator, terminate this Agreement by vote of a majority
of the outstanding voting securities of the Fund. This
Agreement shall terminate automatically in the event of its
assignment.
8. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of
the Fund is on file with the Secretary of State of the
Commonwealth of Delaware and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Fund
as Trustees and not individually and that the obligations of
or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Fund.
9. AMENDMENTS OF THE AGREEMENT.
This Agreement may be amended by a writing signed by
both parties hereto, provided that no amendment to this
Agreement shall be effective until approved:
(i) by the vote of a majority of those Trustees of the
Trust who are not interested persons of the
Administrator or the Trust, and
(ii) by vote of the Board of Trustees of the Trust.
Additional series of the Trust, however, will become
a Fund hereunder upon approval by the Trustees of the
Trust and amendment of Schedule A.
10. LIMITATION OF LIABILITY.
The Fund shall not be responsible for the obligations
of any other series of the Trust. The Administrator expressly
acknowledges the provision in the Declaration of Trust of the
Trust limiting the personal liability of shareholders of the
Fund and of the officers and Trustees of the Trust, and the
Administrator hereby agrees that it shall have recourse to the
Trust or the Fund for payment of claims or obligations as
between the Trust or the Fund and the Administrator arising
out of this Agreement and shall not seek satisfaction from the
shareholders or any shareholder of the Fund or from the
officers or Trustees of the Trust.
11. CERTAIN DEFINITIONS.
The terms "assignment" and "interested persons" when
used herein shall have the respective meanings specified in
the Investment Company Act of 1940 s now in effect or as
hereafter amended subject, however, to such exemption as may
be granted by the Securities and Exchange Commission by any
rule, regulation or order. the term "vote of a majority of the
outstanding voting securities" shall mean the vote of the
lesser of (a) 67 per centum or more of the shares of the Fund
present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the
Fund are present or represented by proxy at the meeting, or
(b) more than 50 per centum of the outstanding shares of the
Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.
ACTIVA MUTUAL FUND TRUST
By ______________________________
Xxxxx X. Xxxxxxxxx, President
ACTIVA ASSET MANAGEMENT, LLC
By ______________________________
Xxxxx X. Xxxxx, President
SCHEDULE A
ADMINISTRATIVE AGREEMENT SERVICES
The following services will be provided to the Trust and each series of the
Trust:
COMPLIANCE
o Maintain and manage annual regulatory filing and compliance calendar.
o Obtain tax identification numbers from the IRS for each Fund portfolio.
o Maintain books and records on behalf of the Fund, as agreed upon by the
parties.
o Notify appropriate Fund officers of xxxx-to-market issues pursuant to
Board-approved procedures and of any security pricing issues.
o Provide appropriate assistance with respect to SEC inspections including
(i) rendering advice regarding proposed responses (ii) compiling data and
other information in response to SEC requests for information and (iii)
communicating with SEC staff members, as necessary.
o Provide appropriate assistance with respect to audits conducted by the
Fund's independent accountants including (i) compiling data and other
information and (ii) communicating with independent accountants, as
necessary.
o Consult with and advise, on a proactive basis, Fund portfolio managers with
respect to compliance matters.
o Prepare brokerage allocations and supporting documentation for use by
Trustees.
o Monitor compliance with Trust Code of Ethics policies.
o Prepare and file Form N-SAR.
TAX AND FINANCIAL SERVICES
o Assist Fund's Independent Accountants with 17f-2 audit process.
o Obtain Fund CUSIPs.
o Prepare and coordinate production of semi-annual/annual financial
statements.
o Validate/approve Fund expenses to be paid.
o Register Fund portfolios with NASDAQ.
o Prepare financial materials for Board of Trustees.
o Calculate declaration of income/capital gain distributions in compliance
with income/excise tax distribution requirements.
o Review all dividend declarations to ensure that such distributions are not
preferential under the Internal Revenue Code.
o Review and file federal and state income tax returns and federal excise tax
returns within statutory deadlines.
o Provide expense budgeting consulting to review expense ratios.
LEGAL SERVICES
o Maintain files and coordinate with independent legal counsel the
preparation and review of registration statements, Fund contracts, Fund
proxies and other Fund legal documentation.
o Provide consultation with respect to product development issues.
o Provide assistance concerning matters pertaining to Federal securities
laws, bank regulatory issues, tax-related issues and ERISA issues.
o Provide information concerning current legal and regulatory development.
o Provide comments, as appropriate, concerning regulatory agency proposals.
o Maintain appropriate insurance coverage on behalf of the Fund in the form
of (i) a Directors & Officers/Errors & Omissions professional liability and
(ii) a Fidelity Bond.
BOARD & SHAREHOLDER MEETING MATTERS
o Prepare for and conduct shareholder meetings.
o Assist in the completion of trustee/officer questionnaires.
o Make available persons to serve as officers of the Fund.
o Maintain calendar and files for all Board of Trustees meetings, including
the maintenance of Fund minute books and corporate records (e.g.,
Declaration of Trust, Bylaws).
o Prepare quarterly Board of Trustees meeting responsibility chart.
o Provide appropriate personnel to attend Board of Trustees meetings.
o Prepare Board of Trustees agendas and relevant sections of Board of
Trustees materials.
o Produce and distribute Board of Trustees books.
o Record minutes of Board of Trustees meetings.
Registration Statements
o Manage the process of updating and filing registration statements by (i)
reviewing or recommending proposed disclosure changes, (ii) compiling data
for purposes of updating information, (iii) receiving disclosure comments
and communicating them to counsel to the Fund and the financial printer and
(iv) overseeing and approving revisions that are made by the financial
printer.
o Prepare periodic supplements to Fund prospectuses or, if the parties agree,
review such supplements that are prepared by counsel to the Fund.
