FUND ACCOUNTING AGREEMENT
AGREEMENT made this ___ day of July 1999, between ACTIVA MUTUAL FUND
TRUST (the "Company"), a Delaware business trust having its principal place of
business at 0000 Xxxxxxx XX, Xxxxx Xxxxxx, Xxxxxxxx 00000 and BYSYS 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 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");
(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, 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) 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;
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(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.
(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;
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(iii) Provide accounting information for the following:
(A) federal and state income tax returns and
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 if 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, 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.
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
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.
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(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 1(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other
materials;
(e) All system-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 _____________,
(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 or (iii) for "cause" as defined below, upon
the provision of 60 days advance written notice by the party alleging cause.
Written notice of nonrenewal must be provided within 60 days of the end of the
Initial Term or any Rollover Period, as the cause 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 these 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 Section 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 of the Company and/or its designees of the Company's
property, records, instruments and documents.
If, for any reason other than non-renewal, 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 shell be bases 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 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 judgements, 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, and
further provided that prior to confessing any claim against it which may be the
subject of this indemnification, Fund Accountant shall give the
Company written notice of and reasonable opportunity to defend against said
claim in its own name or in the name of Fund Accountant.
8. RECORD RETENTION AND CONFIDENTIALITY.
Fund Account shall keep and maintain on behalf of the Company
all books and records which the Company and Fund Account 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 the 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.
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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.
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, 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 shall notify the Company should any of its
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.
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(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.
(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.
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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 ______________________________________; 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.
21. HEADINGS.
Paragraph headings in the 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 benefits of,
the parties hereto and their respective successors and permitted
assigns.
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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:_____________________________
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, a 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 Agreement.
A-1
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.
A-2
