OPTIMUM FUND TRUST
MUTUAL FUND SERVICES AGREEMENT
AGREEMENT made as of July 17, 2003 by and between OPTIMUM FUND TRUST, a
Delaware business trust having its principal office and place of business at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Investment Company"), on behalf
of the series (individually referred to herein as a "Fund" and collectively as
"Funds") of the Investment Company, listed on Exhibit 1 as may be amended from
time to time, and DELAWARE SERVICE COMPANY, INC., a Delaware corporation having
its principal office and place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ (the "Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), with authorized and issued shares of beneficial interest
("Shares");
WHEREAS, the Investment Company desires to retain the Company as fund
accountant to provide fund accounting services (as herein defined) including
certain pricing, accounting and recordkeeping services for each of the Funds,
and the Company desires to accept such appointment;
WHEREAS, the Investment Company desires to appoint the Company as its
administrator to provide it with administrative services (as herein defined),
and the Company desires to accept such appointment; and
WHEREAS, the Investment Company desires to appoint the Company as its
transfer agent and dividend disbursing agent to provide it with transfer agency
services (as herein defined), and as its agent in connection with certain other
activities, and the Company desires to accept such appointment;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
SECTION ONE: FUND ACCOUNTING.
ARTICLE 1. APPOINTMENT.
The Investment Company hereby appoints the Company to provide certain
pricing and accounting services to the Funds, for the period and on the terms
set forth in this Agreement. The Company accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Exhibit 1 to this Agreement.
ARTICLE 2. THE COMPANY'S DUTIES.
Subject to the supervision and control of the Investment Company's Board
of Trustees ("Board"), the Company will assist the Investment Company with
regard to fund accounting for the Investment Company, and the Funds, and in
connection therewith undertakes to perform the following specific services:
A. Value the assets of the Funds using: primarily, market quotations and
matrix pricing, utilized by the Company and from time to time verified by one or
more independent pricing services selected by the Company in consultation with
the Investment Company's investment adviser ("Adviser") and/or investment
sub-adviser ("Sub-Adviser"), or sources selected by the Adviser and/or
Sub-Adviser, and reviewed by the Board; secondarily, if neither the Company nor
a designated pricing service provides a price for a security which the Company
believes should be available by market quotation, the Company may obtain a price
by calling brokers designated by the investment adviser of the Fund holding the
security, or if the adviser does not supply the names of such brokers, the
Company will attempt on its own to find brokers to price those securities;
thirdly, for securities for which no market price is available, the Investment
Company's Pricing Committee (or, in the absence of a Pricing Committee, the
Board) will determine a fair value in good faith. Consistent with Rule 2a-4
under of the 1940 Act, estimates may be used where necessary or appropriate. The
Company's obligations with regard to the prices received from outside pricing
services and designated brokers or other outside sources, is to exercise
reasonable care in the supervision of the pricing agents. The Company is not the
guarantor of the securities prices received from such agents and the Company is
not liable to the Fund for errors in valuing a Fund's assets or calculating the
net asset value per share of such Fund when the calculations are based upon such
prices. All of the above sources of prices used as described are deemed by the
Company to be authorized sources of security prices. The Company provides daily
to the Adviser and/or Sub-Adviser the securities prices used in calculating the
net asset value of the Fund, for its use in preparing exception reports for
those prices on which the Adviser and/or Sub-Adviser has comment. Further, upon
receipt of the exception reports generated by the Adviser and/or Sub-Adviser,
the Company diligently pursues communication regarding exception reports with
the designated pricing agents;
B. Determine the net asset value per share of each Fund, at the time and
in the manner from time to time determined by the Board and as set forth in the
Prospectus and Statement of Additional Information ("Prospectus") of each Fund;
including maintaining each Fund's securities portfolio history, and recording
and reconciling shareholder activity.
C. Calculate the net income of each Fund, if any;
D. Calculate realized capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Calculate dividend and capital gain distribution in accordance with
distribution policies set forth in the Investment Company's prospectus(es) and
Board resolutions;
F. Disseminate Fund NAVs and dividends to interested parties (including
the National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the Investment Company Institute ("ICI"), Morningstar, and Lipper
Analytical Services, Inc. ("Lipper");
G. Prepare all financial reporting information for the Investment
Company's proxies, prospectuses, notices, reports, and other communications
required or otherwise sent to investors;
H. Report to the ICI in response to requests for monthly and other
periodic information;
I. Perform statistical reporting, which includes daily, monthly, quarterly
and annual reports for Lipper, ▇▇▇▇▇▇▇▇▇▇▇▇ and other third party reporting
agencies;
J. Monitor, test and prepare and maintain supporting schedules which
evidence compliance with the definitional and distribution requirements under
the Internal Revenue Code of 1986, as amended ("IRC");
K. Provide the financial information necessary for the preparation of all
federal and state tax returns and ancillary schedules, including year-end excise
tax distributions, and compliance with Subchapter M and Section 4982 of the IRC;
L. Perform special tax reporting to shareholders, including the
preparation of reports which reflect income earned by each Fund by state, exempt
income and distributions that qualify for the corporate dividends received
deduction;
M. Prepare expense and budget figures for each Fund, including the
maintenance of detailed records pertaining to expense accruals and payments and
adjusting reports to reflect accrual adjustments, and arrange for and monitor,
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if directed by appropriate Investment Company officer, the payment of the
Investment Company's and each Funds or class' expenses;
N. Prepare reports for Board meetings;
O. Coordinate the custody relationships;
P. Facilitate security settlements;
Q. Perform required foreign security accounting functions;
R. Perform daily cash reconciliations for each Fund;
S. Provide identified reports to portfolio managers, including providing
portfolio holdings and security valuation reports; preparing cash forecasts and
reconciliations as mutually agreed upon; and preparing income projections;
T. Maintain the general ledger and other accounts, books and financial
records of the Investment Company, including for each Fund, as required under
Section 31(a) of the 1940 Act and the rules thereunder in connection with the
services provided by the Company;
U. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records to be maintained by Rule 31a-1 under the 1940 Act in connection with
the services provided by the Company. The Company further agrees that all such
records it maintains for the Investment Company are the property of the
Investment Company and further agrees to surrender promptly to the Investment
Company such records upon the Investment Company's request;
V. At the request of the Investment Company, prepare various reports or
other financial documents in accordance with generally accepted accounting
principles as required by federal, state and other applicable laws and
regulations;
W. Furnish to third-party data reporting services currently available
standardized performance information and other customary data; and
X. Such other similar services as may be reasonably requested by the
Investment Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section One,
shall hereafter be referred to as "Fund Accounting Services."
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 3. APPOINTMENT.
The Investment Company hereby appoints the Company as Administrator for
the period on the terms and conditions set forth in this Agreement. The Company
hereby accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation set forth in Exhibit 1 to this Agreement.
ARTICLE 4. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the Board
and in accordance with Proper Instructions (as defined hereafter) from the
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Investment Company, the Company will provide facilities, equipment, and
personnel to carry out the following administrative services for operation of
the business and affairs of the Investment Company and each Fund:
A. Prepare, file, and maintain the Investment Company's governing
documents and any amendments thereto, including the trust instrument (which has
already been prepared and filed), the by-laws and minutes of meetings of the
Board and shareholders;
B. Prepare and file with the Securities and Exchange Commission ("SEC")
and the appropriate state securities authorities the registration statements for
the Investment Company and the Investment Company's Shares and all amendments
and supplements thereto, reports to regulatory authorities and shareholders,
prospectuses, proxy statements, notices, and such other documents as may be
necessary to enable the Investment Company to make a continuous offering of its
Shares;
C. Prepare, negotiate, and administer contracts (if any) on behalf of the
Investment Company with, among others, the Adviser and/or Sub-Adviser and the
Investment Company's distributor(s), subject to any applicable restrictions of
the Board or the 1940 Act;
D. Calculate performance data of the Investment Company for dissemination
to information services covering the investment company industry;
E. Coordinate the layout and printing of publicly disseminated
prospectuses and reports;
F. Assist with the design, development, and operation of the Investment
Company and the Funds;
G. Provide individuals reasonably acceptable to the Board for nomination,
appointment, or election as officers of the Investment Company, who will be
responsible for the management of certain of the Investment Company's affairs as
determined by the Investment Company's Board;
H. Consult with the Investment Company and its Board on matters concerning
the Investment Company and its affairs;
I. Prepare agendas and all Board materials for Board meetings and
distribute such materials to all necessary parties;
J. Assist with the preparation for, attend, and prepare minutes of Board
meetings and shareholder meetings;
K. Review and monitor the fidelity bond and errors and omissions insurance
coverage and the submission of any related regulatory filings;
L. Provide a system which will enable the Fund to monitor the total number
of Shares of each Fund sold in each state ("blue sky reporting"). The Fund shall
by Proper Instructions (i) identify to the Company those transactions and assets
to be treated as exempt from the blue sky reporting for each state and (ii)
verify the classification of transactions for each state on the system prior to
activation and thereafter monitor the daily activity for each state. The
responsibility of the Company for each Fund's state blue sky registration status
is limited solely to the recording of the classification of transactions or
accounts with regard to blue sky compliance and the reporting of such
transactions and accounts to the Fund as provided above;
M. Such other similar services as may reasonably be requested by the
Investment Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section Two,
shall hereafter be referred to as "Administrative Services."
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ARTICLE 5. RECORDS.
The Company shall create and maintain all necessary books and records in
accordance with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the 1940 Act and the rules
thereunder, as the same may be amended from time to time, pertaining to the
Administrative Services performed by it and not otherwise created and maintained
by another party pursuant to contract with the Investment Company. Where
applicable, such records shall be maintained by the Company for the periods and
in the places required by Rule 31a-2 under the 1940 Act. The books and records
pertaining to the Investment Company which are in the possession of the Company
shall be the property of the Investment Company. The Investment Company, or the
Investment Company's authorized representatives, shall have access to such books
and records at all times during the Company's normal business hours. Upon the
reasonable request of the Investment Company, copies of any such books and
records shall be provided promptly by the Company to the Investment Company or
the Investment Company's authorized representatives.
ARTICLE 6. EXPENSES.
The Company shall be responsible for expenses incurred in providing office
space, equipment, and personnel as may be necessary or convenient to provide the
Administrative Services to the Investment Company, including the compensation of
the Company employees who serve as trustees or officers of the Investment
Company. The Investment Company shall be responsible for all other expenses
incurred by the Company on behalf of the Investment Company, including without
limitation postage and courier expenses, printing expenses, travel expenses,
registration fees, filing fees, fees of outside counsel and independent
auditors, or other professional services, organizational expenses, insurance
premiums, fees payable to persons who are not the Company's employees, trade
association dues, and other expenses properly payable by the Funds.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 7. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement, the
Investment Company hereby appoints the Company to act as, and the Company agrees
to act as, Transfer Agent and Dividend Disbursing Agent for each Fund's Shares,
and agent in connection with any accumulation, open-account or similar plans
provided to the shareholders of any Fund ("Shareholder(s)"), including without
limitation any periodic investment plan or periodic withdrawal program.
ARTICLE 8. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with Proper
Instructions as may be provided from time to time by the Investment Company as
to any Fund:
A. Transfer Agent
(1) The Company shall receive orders and payment for the purchase of
Shares and promptly deliver payment and appropriate documentation therefor to
the custodian of the relevant Fund (the "Custodian"). The Company shall notify
the Fund and the Custodian on a daily basis of the total amount of orders and
payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the appropriate number
of Shares of each Fund and hold such Shares in the appropriate Shareholder
accounts.
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(3) For certificated Funds, if a Shareholder or its agent requests a
certificate, the Company, as Transfer Agent, shall countersign and mail by first
class mail, a certificate to the Shareholder at its address as set forth on the
transfer books of the Funds, subject to any Proper Instructions regarding the
delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund is returned unpaid for any reason, the Company shall debit
the Share account of the Shareholder by the number of Shares that had been
credited to its account upon receipt of the check or other order, promptly mail
a debit advice to the Shareholder, and notify the Fund of its action. In the
event that the amount paid for such Shares exceeds proceeds of the redemption of
such Shares plus the amount of any dividends paid with respect to such Shares,
the Fund or its distributor will reimburse the Company on the amount of such
excess.
(5) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the procedures as may be
described in the Fund Prospectus or set forth in Proper Instructions, deliver
the appropriate instructions therefor to the Custodian. The Company shall notify
the Funds on a daily basis of the total amount of redemption requests processed
and monies paid to the Company by the Custodian for redemptions.
(6) At the appropriate time upon receiving redemption proceeds from the
Custodian with respect to any redemption, the Company shall pay or cause to be
paid the redemption proceeds in the manner instructed by the redeeming
Shareholders, pursuant to procedures described in the then-current Prospectus of
the Fund.
(7) If any certificate returned for redemption or other request for
redemption does not comply with the procedures for redemption approved by the
Fund, the Company shall promptly notify the Shareholder of such fact, together
with the reason therefor, and shall effect such redemption at the price
applicable to the date and time of receipt of documents complying with said
procedures.
(8) The Company shall effect transfers of Shares by the registered
owners thereof.
(9) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis and report
such actions to the Fund.
(10) The Company shall not be required to issue, transfer, or redeem
Fund's Shares upon receipt of the Company from the Investment Company or from
any federal or state regulatory agency or authority written notice that the
issuance, transfer, or redemption of Fund's Shares has been suspended or
discontinued.
B. Dividend Disbursing Agent
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend Disbursing Agent
for the Funds in accordance with the provisions of its governing document and
the then-current Prospectus of the Fund. The Company shall prepare and mail or
credit income, capital gain, or any other payments to Shareholders. As the
Dividend Disbursing Agent, the Company shall, on or before the payment date of
any such distribution, notify the Custodian of the estimated amount required to
pay any portion of said distribution which is payable in cash and request the
Custodian to make available sufficient funds for the cash amount to be paid out.
The Company shall reconcile the amounts so requested and the amounts actually
received by the Custodian on a daily basis. If a Shareholder is entitled to
receive additional Shares by virtue of any such distribution or dividend,
appropriate credits shall be made to the Shareholder's account, or for
certificated Funds, delivered where requested; and
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(2) The Company shall maintain records of account for each Fund and advise
the Investment Company, each Fund and its Shareholders as to the foregoing.
(3) The Company shall not be required to make any disbursement upon
receipt of the Company from the Investment Company, or from any federal or state
agency or authority, written notice that such disbursement shall not be made.
C. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund, and
maintain pursuant to applicable rules of the SEC a record of the total number of
Shares of the Fund which are authorized, based upon data provided to it by the
Fund, and issued and outstanding. The Company also shall provide the Fund on a
regular basis or upon reasonable request with the total number of Shares which
are authorized and issued and outstanding.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be performed hereunder
in the form and manner as agreed to by the Investment Company or the Fund to
include a record for each Shareholder's account of the following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is required by the Internal
Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates (if share certificates are issued);
(h) Any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods prescribed in said
rules as specifically noted below. Such record retention shall be at the expense
of the Company, and such records may be inspected by the Fund at reasonable
times. The Company may, at its option at any time, and shall forthwith upon the
Fund's demand, turn over to the Fund and cease to retain in the Company's files,
records and documents created and maintained by the Company pursuant to this
Agreement, which are no longer needed by the Company in performance of its
services or for its protection. If not so turned over to the Fund, such records
and documents will be retained by the Company for six years from the year of
creation, during the first two of which such documents will be in readily
accessible form. At the end of the six year period, such records and documents
will either be turned over to the Fund or destroyed in accordance with Proper
Instructions.
D. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the following
information:
(a) A copy of the transaction register;
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(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each state
for "blue sky" purposes as determined according to Proper Instructions delivered
from time to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution agreements,
allocations of sales loads, redemption fees, or other transaction- or
sales-related payments;
(f) Such other information as may be agreed upon from time to time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if required, mail
to Shareholders, such notices for reporting dividends and distributions paid as
are required to be so filed and mailed and shall withhold such sums as are
required to be withheld under applicable federal and state income tax laws,
rules and regulations.
In addition to and not in lieu of the services set forth above the Company shall
perform all of the customary services of a transfer agent, dividend disbursing
agent and, as relevant, agent in connection with accumulation, open-account or
similar plans (including without limitation any periodic investment plan or
periodic withdrawal program), including but not limited to: maintaining all
Shareholder accounts, mailing Shareholder reports and Prospectuses to current
Shareholders, withholding taxes on accounts subject to back-up or other
withholding (including non-resident alien accounts), preparing and filing
reports on U.S. Treasury Department Form 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information; and
E. Shareholder Servicing Agent
(1) Except where instructed in writing by the Investment Company not do
so, and where in compliance with applicable law, accept orders on behalf of the
Investment Company; the Company shall receive and process investments and
applications, remit to the Investment Company or its Custodian payments for
Shares acquired and to be issued, and direct the issuance of Shares as provided
herein.
(2) The Company shall receive, record and respond to communications of
Shareholders and their agents.
(3) As instructed by the Investment Company, the Company shall prepare
and mail Shareholder account information, mail Fund Shareholder reports and Fund
prospectus.
(4) The Company shall prepare and mail proxies and material for
Investment Company Shareholder meetings, receive and process proxies from
Shareholders, and deliver such proxies as directed by the Investment Company.
(5) The Company shall administer investment plans offered by the
Investment Company to investors and Shareholders of each Fund, including
retirement plans, including activities not otherwise provided.
(6) The Company shall perform such other similar services as may be
reasonably requested by the Investment Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section Three,
shall hereafter be referred to as "Transfer Agency Services."
ARTICLE 9. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assumes full responsibility for the
preparation, contents and distribution of its own Prospectus and for complying
with all applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), the 1940 Act and any laws, rules and regulations of government
authorities having jurisdiction.
B. Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 10. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed to
be Proper Instructions if (a) the Company reasonably believes them to have been
given by a person previously authorized in Proper Instructions to give such
instructions with respect to the transaction involved, and (b) the Investment
Company, or the Fund, and the Company promptly cause such oral instructions to
be confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Investment Company, or the Fund, and the Company are satisfied that such
procedures afford adequate safeguards for the Fund's assets. Proper Instructions
may only be amended in writing.
ARTICLE 11. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by either party without the
written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With regard to Transfer Agency Services, the Company may, with the
written consent of the Investment Company, subcontract for the performance of
Transfer Agency Services with such other provider of services duly registered as
a transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act of
1934, as amended, or any succeeding statute, as Company shall select.
C. With regard to Fund Accounting Services and Administrative Services,
the Company may, with the written consent of the Investment Company, subcontract
for the performance of such services with such other service provider as Company
may select.
D. Except as provided in E. below, the Company shall be as fully
responsible to the Investment Company for the acts and omissions of any
subcontractor as it is for its own acts and omissions. The compensation of such
person or persons shall be paid by the Company and no obligation shall be
incurred on behalf of the Investment Company or the Funds, in such respect.
E. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement with an agent
selected by the Investment Company, other than as described in B. and C. above;
provided, however, that the Company shall in no way be responsible to the
Investment Company for the acts and omissions of the agent.
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F. Either party may assign all of or a substantial portion of its business
to a successor, or to a party controlling, controlled by, or under common
control with such party.
Nothing in this Article 11 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 12. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Investment Company shall file with the Company the following documents:
(1) A copy of the trust instrument and by-laws of the Investment
Company and all amendments thereto;
(2) A copy of the resolution of the Board of the Investment Company
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share certificates of the
Investment Company or the Funds in the forms approved by the Board of the
Investment Company with a certificate of the Secretary of the Investment Company
as to such approval;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund also will furnish from time to time the following documents:
(1) Each resolution of the Board of the Investment Company authorizing
the original issuance of each Fund's Shares;
(2) Each registration statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the sale of Shares
of any Fund;
(3) A certified copy of each amendment to the governing document and
the By-Laws of the Investment Company;
(4) Certified copies of each vote of the Board authorizing officers to
give Proper Instructions to the Custodian and agents for fund accountant,
custody services procurement, and shareholder recordkeeping or transfer agency
services;
(5) If issued, specimens of all new Share certificates representing
Shares of any Fund, accompanied by Board resolutions approving such forms;
(6) Such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the proper performance
of its duties; and
(7) Revisions to the Prospectus of each Fund.
ARTICLE 13. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund that:
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(1) it is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware;
(2) It is duly qualified to carry on its business in each jurisdiction
where the nature of its business requires such qualification;
(3) it is permitted under applicable laws and by its articles of
incorporation and by-laws to enter into and perform this Agreement;
(4) all requisite corporate proceedings have been taken to authorize it
to enter into and perform its obligations under this Agreement;
(5) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement; and
(6) it is in compliance with federal securities law requirements and in
good standing as an administrator and fund accountant.
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) it is an investment company duly organized and existing and in good
standing under the laws of its state of organization;
(2) it is empowered under applicable laws and by its trust instrument
and by-laws to enter into and perform its obligations under this Agreement;
(3) all corporate proceedings required by said trust instrument and
by-laws have been taken to authorize it to enter into and perform its
obligations under this Agreement;
(4) the Investment Company is an open-end investment company registered
under the 1940 Act; and
(5) a registration statement under the 1933 Act will be effective, and
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of each Fund being offered for sale.
ARTICLE 14. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One, Two and Three, the Company shall be held to a
standard of reasonable care in carrying out the provisions of this Agreement,
provided however, that the Company shall be held to any higher standard of care
that would be imposed upon the Company, by an applicable law or regulation even
though such stated standard of care was not part of this Agreement. The Company
shall not be liable for any error of judgment or mistake of law or for any loss
or expense suffered by the Investment Company, in connection with the matters to
which this Agreement relates, except for a loss or expense caused by or
resulting from or attributable to willful misfeasance, bad faith, or gross
negligence on the Company's part (or on the part of any third-party to whom the
Company has delegated any of its duties or obligations hereunder) or the
reckless disregard of the performance of its duties under this Agreement (on the
part of the Company or under an agreement with the Company (in the case of such
third party).
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B. Indemnification
The Investment Company shall indemnify the Company against any claim or
deficiency arising from the performance of the Company's duties hereunder,
including the Company's costs, counsel fees and expenses incurred in
investigation or defending any such claim or any administrative or other
proceeding, in the absence of willful misfeasance, bad faith, or gross
negligence on the Company's part (or on the part of any third-party to which the
Company has delegated any of its duties or obligations hereunder) or the
reckless disregard of the performance of its duties under this Agreement (on the
part of the Company) or under an agreement with the Company (in the case of such
third-party).
ARTICLE 15. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from the date first written above and
shall continue for a period of two (2) years ("Initial Term"). Thereafter, this
Agreement shall be automatically renewed each year for an additional term of one
year ("Additional Term"), provided that either party may terminate this
Agreement by written notice delivered at least six months prior to the
expiration of the Initial or any Additional Term. In the event, however, of a
material breach by the Company of its obligations under this Agreement,
including a failure by the Company to meet the applicable standard of care set
forth herein, the Investment Company shall promptly notify the Company in
writing of such breach and, upon receipt of such notice, the Company shall
promptly cure the breach, and, if the breach is not so cured within 30 days
after the Company's receipt of notice thereof, the Investment Company may
terminate this Agreement on not less than 30 days' written notice. The
termination date for all original or after-added investment companies which are,
or become, a party to this Agreement shall be coterminous. Investment companies
that merge or dissolve during an Initial Term or Additional Term shall cease to
be a party on the effective date of such merger or dissolution.
Upon the termination of this Agreement by the Investment Company, the
Investment Company shall pay to the Company such compensation as may be payable
prior to the effective date of such termination. In the event that the
Investment Company designates a successor to any of the Company's obligations
hereunder, the Company shall, at the expense and direction of the Investment
Company, transfer to such successor all relevant books, records and other data
established or maintained by the Investment Company under the foregoing
provisions. Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of Article
14 shall survive the termination of this Agreement.
ARTICLE 16. AMENDMENT.
This Agreement may be amended or modified by a written agreement executed
by both parties.
ARTICLE 17. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Investment Company's trust instrument. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
ARTICLE 18. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Pennsylvania,
12
provided however, that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated by the SEC
thereunder.
ARTICLE 19. NOTICES.
Except as otherwise specifically provided herein, notices and other
writings delivered or mailed postage prepaid to the Investment Company or to the
Company shall be deemed to have been properly delivered or given hereunder to
the respective addresses set forth above.
ARTICLE 20. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 21. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
ARTICLE 22. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be appointed by the
Investment Company, the Company shall upon termination of this Agreement deliver
to such successor agent at the office of the Company all properties of the
Investment Company held by it hereunder. If no such successor agent shall be
appointed, the Company shall at its office upon receipt of Proper Instructions
deliver such properties in accordance with such instructions.
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to the Company on or before the date when
such termination shall become effective, then the Company shall have the right
to deliver to a bank or trust company, which is a "bank" as defined in the 1940
Act, of its own selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than $2,000,000, all
properties held by the Company under this Agreement. Thereafter, such bank or
trust company shall be the successor of the Company under this Agreement.
ARTICLE 23. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Fund as a result of work stoppage, power
or other mechanical failure, natural disaster, governmental action,
communication disruption or other impossibility of performance.
ARTICLE 24. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 25. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE
INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized by the
trustees of the Investment Company and signed by an authorized officer of the
Investment Company, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any of
the trustees or Shareholders of the Investment Company, but bind only the
property of the Fund, as provided in the Investment Company's trust instrument.
13
ARTICLE 26. COMPENSATION.
A. The Funds will compensate the Company for the services described herein
in accordance with the fees agreed upon from time to time between the parties
hereto. Such fees do not include out-of-pocket disbursements of the Company for
which the Funds shall reimburse the Company. Out-of-pocket disbursements shall
include, but shall not be limited to, the items agreed upon between the parties
from time to time, including those items listed on Exhibit 1 attached hereto.
B. The Fund, and not the Company, shall bear the cost of: custodial
expenses; membership dues in the Investment Company Institute or any similar
organization; transfer agency expenses; investment advisory expenses; costs of
printing and mailing stock certificates (if issued); Prospectuses, reports and
notices; administrative expenses; interest on borrowed money; brokerage
commissions; taxes and fees payable to federal, state and other governmental
agencies; fees of independent trustees of the Investment Company; independent
auditors expenses; legal and audit department expenses billed to the Company for
work performed related to the Investment Company or the Funds; law firm
expenses; organizational expenses; or other expenses not specified in this
Article 26 which may be properly payable by the Funds.
C. The compensation and out-of-pocket expenses attributable to the Fund
shall be accrued by the Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the Company. The Company
will maintain detailed information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized officer of the
Investment Company and/or the Funds and a duly authorized officer of the
Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
OPTIMUM FUND TRUST, DELAWARE SERVICE COMPANY, INC.
ON BEHALF OF THE SERIES LISTED ON EXHIBIT 1
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman/President/Chief Executive Title: Senior Vice President/
Officer Treasurer/Controller
14
EXHIBIT 1
TO
MUTUAL FUND SERVICES AGREEMENT
The Mutual Fund Services Agreement dated July 17, 2003 between OPTIMUM FUND
TRUST and DELAWARE SERVICE COMPANY, INC. shall apply to the following series:
Optimum Large Cap Growth Fund Optimum Large Cap Value Fund
Optimum Small Cap Growth Fund Optimum Small Cap Value Fund
Optimum International Fund Optimum Fixed Income Fund
I. ADMINISTRATIVE SERVICES
For all Administrative Services provided pursuant to this Agreement, the
Investment Company agrees to pay and the Company hereby agrees to accept as full
compensation for its services rendered hereunder a fee as follows:
ADMINISTRATIVE SERVICES FEE
(as a percentage of average daily net assets)
0.35%
ADMINISTRATIVE SERVICES: OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the following:
postage and courier expenses, printing expenses, travel expenses, registration
fees, filing fees, fees of outside counsel and independent auditors, or other
professional services, organizational expenses, insurance premiums, fees payable
to persons who are not the Company's employees, trade association dues, and
other expenses properly payable by the Funds.
II. FUND ACCOUNTING SERVICES
For all Fund Accounting Services provided pursuant to this Agreement, the
Investment Company agrees to pay and the Company hereby agrees to accept as
compensation for its services rendered hereunder a fee as follows:
FUND FUND ACCOUNTING SERVICES FEE
(as a percentage of average daily net assets)
Optimum Large Cap Growth Fund 0.04%, subject to an annual minimum of $35,000,
plus $4,000 per share class
Optimum Large Cap Value Fund 0.04%, subject to an annual minimum of $35,000,
plus $4,000 per share class
Optimum Small Cap Growth Fund 0.04%, subject to an annual minimum of $35,000,
plus $4,000 per share class
Optimum Small Cap Value Fund 0.04%, subject to an annual minimum of $35,000,
plus $4,000 per share class
Optimum Fixed Income Fund 0.04%, subject to an annual minimum of $45,000,
plus $4,000 per share class
Optimum International Fund 0.04%, subject to an annual minimum of $70,000,
plus $4,000 per share class
FUND ACCOUNTING SERVICES: OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the following:
postage (including overnight courier service), statement stock, envelopes,
telephones, telecommunication charges (including FAX), travel, duplicating,
forms, supplies, microfiche, computer access charges, client specific system
enhancements, access to the shareholder recordkeeping system, security pricing
services, variable rate change notification services, paydown factor
notification services.
III. TRANSFER AGENCY SERVICES
For all Transfer Agency Services provided pursuant to this Agreement, the
Investment Company agrees to pay and the Company hereby agrees to accept as
compensation for its services rendered hereunder a fee as follows:
TRANSFER AGENCY SERVICES ANNUAL ACCOUNT FEE
(as a percentage of average daily net assets)
0.15%, subject to a minimum fee of
$2,000 per class per fund each month
TRANSFER AGENCY SERVICES: OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include but are not limited to postage (including
overnight courier service), statement stock, envelopes, telecommunication
charges (including Fax), travel, duplicating, forms, supplies, microfiche,
computer access charges, client specific enhancements, disaster recovery, dosed
account fees, processing fees (including check encoding), and expenses incurred
at the specific direction of the Fund. Postage for mass mailings is due seven
days in advance of the mailing date.
IV. PAYMENT
Payment is due thirty days after the date of the invoice.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of July 17, 2003.
OPTIMUM FUND TRUST DELAWARE SERVICE COMPANY, INC.
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------- -----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman/President/Chief Executive Title: Senior Vice President/
Officer Treasurer/Controller