FUND ACCOUNTING AGREEMENT
AGREEMENT made this 9th day of July, 1999, between ACTIVA MUTUAL FUND
TRUST (the "Company"), a Delaware business trust having its principal place of
business at 0000 Xxxxxxx, Xxxxx Xxxxxx, Xxxxxxxx, 00000, and BISYS FUND SERVICES
OHIO, INC. ("Fund Accountant"), an Ohio corporation having its principal place
of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Company desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Company, all as now or
hereafter may be established from time to time (individually referred to herein
as the "Fund" and collectively as the "Funds"); and
WHEREAS, Fund Accountant is willing to perform such services on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Fund Accountant.
(a) Maintenance of Books and Records. Fund Accountant
will keep and maintain the following books and
records of each Fund pursuant to Rule 31a-1 under the
Investment Company Act of 1940 (the "Rule"):
(i) Journals containing an itemized daily record
in detail of all purchases and sales of
securities, all receipts and disbursements
of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all
asset, liability, reserve, capital, income
and expense accounts, including interest
accrued and interest received, as required
by subsection (b)(2)(i) of the Rule;
(iii) Separate ledger accounts required by
subsection (b)(2)(ii) and (iii) of the
Rule; and
(iv) A monthly trial balance of all ledger
accounts (except shareholder accounts) as
required by subsection (b)(8) of the Rule.
(b) Performance of Daily Accounting Services. In addition
to the maintenance of the books and records specified
above, Fund Accountant shall perform the following
accounting services daily for each Fund:
(i) Calculate the net asset value per share
utilizing prices obtained from the sources
described in subsection 1(b)(ii) below;
(ii) Obtain security prices from independent
pricing services, or if such quotes are
unavailable, then obtain such prices from
each Fund's investment adviser or its
designee, as approved by the Company's Board
of Trustees/Directors (hereafter referred to
as "Directors");
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(iii) Verify and reconcile with the Funds'
custodian all daily trade activity;
(iv) Compute, as appropriate, each Fund's net
income and capital gains, dividend payables,
dividend factors, 7-day yields, 7-day
effective yields, 30-day yields, total
return, expense ratios, portfolio turnover
rate and weighted average portfolio
maturity;
(v) Review daily the net asset value calculation
and dividend factor (if any) for each Fund
prior to release to shareholders, check and
confirm the net asset values and dividend
factors for reasonableness and deviations,
and distribute net asset values and yields
to NASDAQ;
(vi) In accordance with Rule 2a-7 under the
Investment Company Act of 1940, report to
the Company the daily market pricing of
securities in any money market Funds, with
the comparison to the amortized cost basis;
(vii) Determine unrealized appreciation and
depreciation on securities held in variable
net asset value Funds;
(viii) Amortize premiums and accrete discounts on
securities purchased at a price other than
face value, if requested by the Company;
(ix) Update fund accounting system to reflect
rate changes, as received from a Fund's
investment adviser, on variable interest
rate instruments;
(x) Post Fund transactions to appropriate
categories;
(xi) Accrue expenses of each Fund according to
instructions received from the Company's
Administrator;
(xii) Determine the outstanding receivables and
payables for all (1) security trades,
(2) Fund share transactions and (3) income
and expense accounts;
(xiii) Provide accounting reports in connection
with the Company's regular annual audit and
other audits and examinations by regulatory
agencies; and
(xiv) Provide such periodic reports as the parties
shall agree upon, as set forth in a separate
schedule.
(c) Special Reports and Services.
(i) Fund Accountant may provide additional
special reports upon the request of the
Company or a Fund's investment adviser,
which may result in an additional charge,
the amount of which shall be agreed upon
between the parties.
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(ii) Fund Accountant may provide such other
similar services with respect to a Fund as
may be reasonably requested by the Company,
which may result in an additional charge,
the amount of which shall be agreed upon
between the parties.
(d) Additional Accounting Services. Fund Accountant shall
also perform the following additional accounting
services for each Fund:
(i) Provide monthly a download (and hard copy
thereof) of the financial statements
described below, upon request of the
Company. The download will include the
following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the
following:
(A) federal and state income tax returns
and federal excise tax returns;
(B) the Company's semi-annual reports
with the Securities and Exchange
Commission ("SEC") on Form N-SAR;
(C) the Company's annual, semi-annual
and quarterly (if any) shareholder
reports;
(D) registration statements on Form N-1A
and other filings relating to the
registration of shares:
(E) the Administrator's monitoring of
the Company's status as a regulated
investment company under Subchapter
M of the Internal Revenue Code, as
amended;
(F) annual audit by the Company's
auditors; and
(G) examinations performed by the SEC.
2. Subcontracting.
Fund Accountant may, at its expense, upon receiving prior
written consent of the Company (which consent shall not be unreasonably
withheld), subcontract with any entity or person concerning the provision of the
services contemplated hereunder; provided, however, that Fund Accountant shall
not be relieved of any of its obligations under this Agreement by the
appointment of such subcontractor and provided further, that Fund Accountant
shall be responsible, to the extent provided in Section 7 hereof, for all acts
of such subcontractor as if such acts were its own.
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3. Compensation.
The Company shall pay Fund Accountant for the services to be provided by Fund
Accountant under this Agreement in accordance with, and in the manner set forth
in, Schedule A hereto, as such Schedule may be amended from time to time.
4. Reimbursement of Expenses.
In addition to paying Fund Accountant the fees described in Section 3
hereof, the Trust agrees to reimburse Fund Accountant for its reasonable
out-of-pocket expenses in providing services hereunder, including without
limitation the following:
(a) All freight and other delivery and bonding charges
incurred by Fund Accountant in delivering materials
to and from the Company;
(b) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred by Fund Accountant in communication with the
Company, the Company's investment adviser or
custodian, dealers or others as required for Fund
Accountant to perform the services to be provided
hereunder;
(c) The cost of obtaining security market quotes pursuant
to Section l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or
other materials;
(e) All systems-related expenses associated with the
provision of special reports and services pursuant to
Section 1(c) herein;
(f) Any expenses Fund Accountant shall incur at the
written direction of an officer of the Company
thereunto duly authorized; and
(g) Any additional expenses reasonably incurred by Fund
Accountant in the performance of its duties and
obligations under this Agreement.
5. Effective Date.
This Agreement shall become effective with respect to a Fund
as of the date first written above (or, if a particular Fund is not in existence
on that date, on the date such Fund commences operation) (the "Effective Date").
6. Term.
This Agreement shall continue in effect with respect to a
Fund, unless earlier terminated by either party hereto as provided hereunder,
until July 8, 2002 (the "Initial Term"). Thereafter, unless otherwise terminated
as provided herein, this Agreement shall be renewed automatically for successive
one-year periods ("Rollover Periods"). This Agreement may be terminated without
penalty (i) by provision of a notice of nonrenewal in the manner set forth
below, (ii) by mutual agreement of the parties, (iii) for "cause," as defined
below, upon the provision of 60 days advance written notice by the party
alleging cause or (iv) upon the provision of 90 days advance written notice
during a Rollover Period. Written notice of nonrenewal must be provided within
60 days of the end of the Initial Term or any Rollover Period, as the case may
be.
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For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been remedied for thirty (30)
days following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (c) financial difficulties on the
part of the party to be terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors.
After such termination for so long as Fund Accountant, with
the written consent of the Company, in fact continues to perform any one or more
of the services contemplated by this Agreement or any schedule or exhibit
hereto, the provisions of this Agreement, including without limitation the
provisions dealing with indemnification, shall continue in full force and
effect. Compensation due Fund Accountant and unpaid by the Company upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. Fund Accountant shall be entitled to collect from the Company, in
addition to the compensation described under Sections 3 and 4 hereof, the amount
of all of Fund Accountant's cash disbursements for services in connection with
Fund Accountant's activities in effecting such termination, including without
limitation, the delivery to the Company and/or its designees of the Company's
property, records, instruments and documents.
If, during the Initial Term, for any reason other than
nonrenewal, mutual agreement of the parties or "cause," as defined above, Fund
Accountant is replaced as fund accountant, or if a third party is added to
perform all or a part of the services provided by Fund Accountant under this
Agreement (excluding any sub-accountant appointed by Fund Accountant as provided
in Section 2 hereof), then the Company shall make a one-time cash payment, in
consideration of the fee structure and services to be provided under this
Agreement, and not as a penalty, to Fund Accountant equal to the balance due
Fund Accountant for the remainder of the then-current term of this Agreement,
assuming for purposes of calculation of the payment that such balance shall be
based upon the average amount of the Company's assets for the twelve months
prior to the date Fund Accountant is replaced or a third party is added.
In the event the Company is merged into another legal entity
in part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which Fund
Accountant is not retained to provide fund accounting services consistent with
this Agreement. The one-time cash payment referenced above shall be due and
payable on the day prior to the first day in which Fund Accountant is replaced
or a third party is added.
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The parties further acknowledge and agree that, in the event
Fund Accountant is replaced, or a third party is added, as set forth above, (i)
a determination of actual damages incurred by Fund Accountant would be extremely
difficult, and (ii) the liquidated damages provision contained herein is
intended to adequately compensate Fund Accountant for damages incurred and is
not intended to constitute any form of penalty.
7. Standard of Care; Reliance on Records and Instructions;
Indemnification.
Fund Accountant shall use its best efforts to insure the
accuracy of all services performed under this Agreement, but shall not be liable
to the Company for any action taken or omitted by Fund Accountant in the absence
of bad faith, willful misfeasance, negligence or from reckless disregard by it
of its obligations and duties.
A Fund agrees to indemnify and hold harmless Fund Accountant,
its employees, agents, directors, officers and nominees from and against any and
all claims, demands, actions and suits, whether groundless or otherwise, and
from and against any and all judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character arising
out of or in any way relating to Fund Accountant's actions taken or nonactions
with respect to the performance of services under this Agreement with respect to
such Fund or based, if applicable, upon reasonable reliance on information,
records, instructions or requests with respect to such Fund given or made to
Fund Accountant by a duly authorized representative of the Company; provided
that this indemnification shall not apply to actions or omissions of Fund
Accountant in cases of its own bad faith, willful misfeasance, negligence or
from reckless disregard by it of its obligations and duties, with respect to the
performance of services under this Agreement; and further provided that Fund
Accountant shall give the Company written notice of and reasonable opportunity
to defend against said claims in its own name or in the name of Fund Accountant.
In no event shall Fund Accountant confess any claims against it which may be the
subject of this indemnification without the prior written consent of the
Company.
Fund Accountant agrees to indemnify and hold harmless the
Company, its agents, trustees, officers and nominees from and against any and
all claims, demands, actions and suits, whether groundless or otherwise, and
from and against any and all judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character arising
out of or in any way relating to Fund Accountant's bad faith, willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties, with respect to the performance of services under this Agreement; and
further provided that the Company shall give Fund Accountant written notice of
and reasonable opportunity to defend against said claim in its own name or in
the name of the Company. In no event shall the Company confess any claims
against it which may be the subject of this indemnification without the prior
written consent of Fund Accountant.
8. Record Retention and Confidentiality.
Fund Accountant shall keep and maintain on behalf of the
Company all books and records which the Company and Fund Accountant is, or may
be, required to keep and maintain pursuant to any applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended (the "1940 Act"), relating to the
maintenance of books and records in connection with the services to be provided
hereunder. Fund Accountant further agrees that all such books and records shall
be the property of the Company and to make such books and records available for
inspection by the Company or by the Securities and Exchange Commission at
reasonable times and otherwise to keep confidential all books and records and
other information relative to the Company and its shareholders; except when
requested to divulge such information by duly-constituted authorities or court
process.
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9. Uncontrollable Events.
Fund Accountant assumes no responsibility hereunder, and shall
not be liable, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
10. Reports.
Fund Accountant will furnish to the Company and to its
properly authorized auditors, investment advisers, examiners, distributors,
dealers, underwriters, salesmen, insurance companies and others designated by
the Company in writing, such reports and at such times as are prescribed
pursuant to the terms and the conditions of this Agreement to be provided or
completed by Fund Accountant, or as subsequently agreed upon by the parties
pursuant to an amendment hereto. The Company agrees to examine each such report
or copy promptly and will report or cause to be reported any errors or
discrepancies therein.
11. Rights of Ownership.
All computer programs and procedures developed to perform
services required to be provided by Fund Accountant under this Agreement are the
property of Fund Accountant. All records and other data except such computer
programs and procedures are the exclusive property of the Company and all such
other records and data will be furnished to the Company in appropriate form as
soon as practicable after termination of this Agreement for any reason.
12. Return of Records.
Fund Accountant may at its option at any time, and shall
promptly upon the Company's demand, turn over to the Company and cease to retain
Fund Accountant's files, records and documents created and maintained by Fund
Accountant pursuant to this Agreement which are no longer needed by Fund
Accountant in the performance of its services or for its legal protection. If
not so turned over to the Company, such documents and records will be retained
by Fund Accountant for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Company
unless the Company authorizes in writing the destruction of such records and
documents.
13. Representations of the Company.
The Company certifies to Fund Accountant that: (1) as of the
close of business on the Effective Date, each Fund that is in existence as of
the Effective Date has authorized unlimited shares, and (2) this Agreement has
been duly authorized by the Company and, when executed and delivered by the
Company, will constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
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14. Representations of Fund Accountant.
Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other cause
the records, and other data of the Company and Fund Accountant's records, data,
equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its obligations
hereunder, and (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
15. Insurance.
Fund Accountant agrees to furnish the Company with information
pertaining to the fidelity bond and professional liability insurance coverage
that it carries. Such information shall include the name of the insurance
carrier(s), the coverage level and the deductible level. Fund Accountant shall
notify the Company should any of such insurance coverage be canceled or reduced.
Such notification shall include the date of change and the
reasons therefor. Fund Accountant shall notify the Company of any material
claims against it with respect to services performed under this Agreement,
whether or not they may be covered by insurance, and shall notify the Company
from time to time as may be appropriate of the total outstanding claims made by
Fund Accountant under its insurance coverage.
16. Information to be Furnished by the Company and Funds.
The Company has furnished to Fund Accountant the following:
(a) Copies of the Declaration of Trust or Articles of
Incorporation of the Company and of any amendments
thereto, certified by the proper official of the
state in which such document has been filed.
(b) Copies of the following documents:
(i) The Company's Bylaws and any amendments
thereto; and
(ii) Certified copies of resolutions of the
Directors covering the approval of this
Agreement, authorization of a specified
officer of the Company to execute and
deliver this Agreement and authorization for
specified officers of the Company to
instruct Fund Accountant thereunder.
(c) A list of all the officers of the Company, together
with specimen signatures of those officers who are
authorized to instruct Fund Accountant in all
matters.
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(d) Two copies of the Prospectuses and Statements of
Additional Information for each Fund.
17. Information Furnished by Fund Accountant.
(a) Fund Accountant has furnished to the Company
the following:
(i) Fund Accountant's Articles of Incorporation;
and
(ii) Fund Accountant's Bylaws and any amendments
thereto.
(b) Fund Accountant shall, upon request, furnish
certified copies of corporate actions covering the
following matters:
(i) Approval of this Agreement, and
authorization of a specified officer of Fund
Accountant to execute and deliver this
Agreement; and
(ii) Authorization of Fund Accountant to act as
fund accountant for the Company and to
provide accounting services for the Company.
18. Amendments to Documents.
The Company shall furnish Fund Accountant written copies of
any amendments to, or changes in, any of the items referred to in Section 16
hereof forthwith upon such amendments or changes becoming effective. In
addition, the Company agrees that no amendments will be made to the Prospectuses
or Statements of Additional Information of the Company which might have the
effect of changing the procedures employed by Fund Accountant in providing the
services agreed to hereunder or which amendment might affect the duties of Fund
Accountant hereunder unless the Company first obtains Fund Accountant's approval
of such amendments or changes, which approval shall not be unreasonably
withheld.
19. Compliance with Law.
Except for the obligations of Fund Accountant set forth in
Section 8 hereof, the Company assumes full responsibility for the preparation,
contents and distribution of each prospectus of the Company as to compliance
with all applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Company's
shares. The Company represents and warrants that no shares of the Company will
be offered to the public until the Company's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
20. Notices.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice, at the following address: if to the Company, at 0000 Xxxxxxx, Xxxxx
Xxxxxx, Xxxxxxxx 00000; and if to Fund Accountant, at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000, or at such other address as such party may from time to
time specify in writing to the other party pursuant to this Section.
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21. Headings.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
22. Assignment.
This Agreement and the rights and duties hereunder shall not
be assignable with respect to a Fund by either of the parties hereto except by
the specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. Governing Law.
This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first above written.
ACTIVA MUTUAL FUND TRUST
By:
Title: President__
BISYS FUND SERVICES OHIO, INC.
By:______________________________
Title:
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Dated: _______________________
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
ACTIVA MUTUAL FUND TRUST
AND
BISYS FUND SERVICES OHIO, INC.
FEES
Fund Accountant shall be entitled to receive fees from each Fund in accordance
with the following schedule:
Annual Fees:
Each Fund shall pay to Fund Accountant on the first business day of each month,
or at such time(s) as Fund Accountant shall request and the parties hereto shall
agree, an annual per Fund fee computed daily based upon the following schedule:
Assets Per Fund Fee Amount
0 - $100 million $35,000
$100 million - $1 billion $50,000
over $1 billion $75,000
Fee for Additional Share Classes:
Classes of shares, which have different net asset values or pay different daily
dividends, will be treated as separate classes for purposes of this fee
schedule. An additional annual fee of $10,000 shall be charged for each separate
class of shares that is created following the Effective Date.
Out-of-pocket Expenses:
Fund Accountant shall be entitled to be reimbursed for out-of-pocket expenses
pursuant to Section 4 of the Agreement.
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Additional Fees:
Fund Accountant has agreed to provide investment adviser personnel with Internet
access to portfolio accounting reports at such time that Fund Accountant has
completed the development of a computer system that will permit such access. An
additional annual fee of $2,500 per Fund shall be charged for such Internet
access.
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