EXHIBIT 23(H)(1)
OPERATING SERVICES AGREEMENT
DECLARATION FUND
THIS AGREEMENT is made and entered into as of the 1ST day of March, 1999,
by and between Declaration Fund, a Pennsylvania business trust (the "Fund"), and
Declaration Investment Advisers, Inc., a Pennsylvania corporation (hereinafter
referred to as "Manager").
WHEREAS, the Fund is a diversified, open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "Act"), and
authorized to issue shares representing interests in The Declaration Money
Market Fund (the "Portfolio"); and
WHEREAS, Manager is registered as an investment advisor under the
Investment Advisors Act of 1940, and engages in the business of asset management
and the provision of certain other administrative and recordkeeping services in
connection therewith; and
WHEREAS, the Fund wishes to engage Manager, to provide, or arrange for the
provision of, certain operational services which are necessary for the
day-to-day operations of the Portfolio in the manner and on the terms and
conditions hereinafter set forth, and Manager wishes to accept such engagement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and Manager agree as follows:
1. OBLIGATIONS OF MANAGER
(a) Services. The Fund hereby retains Manager to provide, or, upon receipt
of written approval of the Fund arrange for other companies to provide, the
following services to the Portfolio in the manner and to the extent that such
services are reasonably necessary for the operation of the Portfolio
(collectively, the "Services"):
(1) accounting services and functions, including costs and expenses of any
independent public accountants;
(2) non-litigation related legal and compliance services, including the
expenses of maintaining registration and qualification of the Fund and the
Portfolio under federal, state and any other applicable laws and
regulations;
(3) dividend disbursing agent, dividend reinvestment agent, transfer agent, and
registrar services and functions (including answering inquiries related to
shareholder Portfolio accounts);
(4) custodian and depository services and functions;
(5) distribution, marketing, and/or underwriting services;
(6) independent pricing services;
(7) preparation of reports describing the operations of the Portfolio,
including the costs of providing such reports to broker-dealers, financial
institutions and other organizations which render services and assistance
in connection with the distribution of shares of the Portfolio;
(8) sub-accounting and recordkeeping services and functions (other than those
books and records required to be maintained by Manager under the Investment
Advisory Agreement between the Fund and Manager dated August 15, 1998),
including maintenance of shareholder records and shareholder information
concerning the status of their Portfolio accounts by investment advisors,
broker-dealers, financial institutions, and other organizations on behalf
of Manager;
(9) shareholder and board of directors communication services, including the
costs of preparing, printing and distributing notices of shareholders'
meetings, proxy statements, prospectuses, statements of additional
information, Portfolio reports, and other communications to the Fund's
Portfolio shareholders, as well as all expenses of shareholders' and board
of directors' meetings, including the compensation and reimbursable
expenses of the directors of the Fund;
(10) other day-to-day administrative services, including the costs of designing,
printing, and issuing certificates representing shares of the Portfolio,
and premiums for the fidelity bond maintained by the Fund pursuant to
Section 17(g) of the Act and rules promulgated thereunder (except for such
premiums as may be allocated to third parties, as insureds thereunder).
(b) Exclusions from Service. Notwithstanding the provisions of Paragraph
1(a) above, the Services shall not include and Manager will not be responsible
for any of the following:
(1) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund or the Portfolio in connection with securities
transactions to which the Fund or the Portfolio is a party or in connection
with securities owned by the Fund or the Portfolio;
(2) the interest on indebtedness, if any, incurred by the Fund or the
Portfolio;
(3) the taxes, including franchise, income, issue, transfer, business license,
and other corporate fees payable by the Fund or the Portfolio to federal,
state, county, city, or other governmental agents;
(4) the expenses, including fees and disbursements of counsel, in connection
with litigation by or against the Fund or the Portfolio; and
(5) any other extraordinary expense of the Fund or Portfolio.
(c) Books and Records. All books and records prepared and maintained by
Manager for the Fund under this Agreement shall be the property of the Fund and,
upon request therefor, Manager shall surrender to the Fund such of the books and
records so requested.
(d) Staff and Facilities. Manager assumes and shall pay for maintaining the
staff, personnel, space, equipment and facilities necessary to perform its
obligations under this Agreement.
2. OBLIGATIONS OF THE FUND
(a) Fee. The Fund will pay to Manager on the last day of each month a fee
at an annual rate equal to 0.49% of average net asset of the Portfolio, such fee
to be computed daily based upon the net asset value of the Portfolio as
determined by a valuation made in accordance with the Fund's procedure for
calculating Portfolio net asset value as described in the Fund's Prospectus
and/or Statement of Additional Information. During any period when the
determination of a Portfolio's net asset value is suspended by the directors of
the Fund, the net asset value of a share of that Portfolio as of the last
business day prior to such suspension shall, for the purpose of this Paragraph
2(a), be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
(b) Information. The Fund will, from time to time, furnish or otherwise
make available to Manager such information relating to the business and affairs
of the Portfolio as Manager may reasonably require in order to discharge its
duties and obligations hereunder.
3. TERM. This Agreement shall remain in effect until no later than February
28, 2001, and from year to year thereafter provided such continuance is approved
at least annually by (1) the vote of a majority of the Board of Directors of the
Fund or (2) a vote of a "majority" (as that term is defined in the Investment
Company Act of 1940) of the Fund's outstanding securities, provided that in
either event the continuance is also approved by the vote of a majority of the
directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party, which vote must be cast in
person at a meeting called for the purpose of voting on such approval; provided,
however, that;
(a) the Fund, at any time and without the payment of any penalty may
terminate this Agreement upon 120 days written notice to Manager;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the Rules thereunder);
and
(c) Manager may terminate this Agreement without payment of penalty on 120
days written notice to the Fund.
4. NOTICES. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Fund: If to the Manager:
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Declaration Fund Declaration Investment Advisers, Inc.
000 Xxxxx Xxxx, Xxxxx 0000 000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
ATTENTION: XXXXXXX XXXX ATTENTION: XXXXXXX X. XXXXX
Chairman Chief Executive Officer
5. MISCELLANEOUS
(a) Performance Review. Manager will permit representatives of the Fund,
including the Fund's independent auditors, to have reasonable access
to the personnel and records of Manager in order to enable such
representatives to monitor the quality of services being provided and
the level of fees due Manager pursuant to this Agreement. In addition,
Manager shall promptly deliver to the board of directors of the Fund
such information as may reasonably be requested from time to time to
permit the board of directors to make an informed determination
regarding continuation of this Agreement and the payments contemplated
to be made hereunder.
(b) Choice of Law. This Agreement shall be construed in accordance with
the laws of the State of Maryland and the applicable provisions of the
Act. To the extent the applicable law of the State of Maryland or any
of the provisions herein conflict with the applicable provisions of
the Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
Declaration Fund Declaration Investment Advisers, Inc.
By: ____________________________ By: __________________________
Xxxxxxx Xxxx, Chairman Xxxxxxx X. Xxxxx,
Chief Executive Officer
ATTEST: ATTEST:
By: __________________________ By: __________________________
Secretary Secretary
