EXHIBIT 9(D)
THE MICHIGAN HERITAGE FUND
ACCOUNTING SERVICES AGREEMENT
THIS ACCOUNTING SERVICES AGREEMENT (the "Agreement") is made as of the
19th day of February, 1997, by and between Declaration Fund (the "Trust") a
Pennsylvania Business Trust with respect to The Michigan Heritage Fund (the
"Fund"), a separate seriesofthe Trust and Declaration Service Company (the
"Accounting Services Agent"), a Pennsylvania corporation.
WITNESSETH THAT:
WHEREAS, the Trust is registered as a an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and its shares are registered under the
Securities Act of 1933, as amended (the "1933 Act") and
WHEREAS, the Trust, a series investment company, may issue its shares
in one or more series and
WHEREAS, Fund has been created as a separate series of the Trust and
the shares that will be issued by the Trust with respect to the Fund may be
issued in separate classes (hereof the "Portfolio" or "Portfolios") and
WHEREAS, the Trust, with respect to the Fund, and the Accounting
Services Agent desire to enter into this Agreement pursuant to which the
Accounting Services Agent will provide portfolio accounting services to the
Portfolios of the Fund identified on Schedule A hereto, as may be amended
from time to time, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement the Trust, with respect to the Fund, and the
Accounting Services Agent, intending to be legally bound hereby, agree as
follows
1. APPOINTMENT OF ACCOUNTING SERVICES AGENT. The Trust on behalf of
the Fund hereby appoints the Accounting Services Agent to perform the
services, described in this Agreement, for the Fund as identified on
Schedule A, and the Accounting Services Agent hereby accepts such
appointment. The Accounting Services Agent shall act under such
appointment pursuant to the terms and conditions hereinafter set forth.
2. FUND DOCUMENTS. The Trust has provided to the Accounting Services
Agent, properly certified or authenticated copies of the following Trust
related documents in effect on the date hereof: the Trust's organizational
documents, including the Trust Indenture and the By-Laws; the Trust's
Registration Statement on Form N-1A, including all exhibits thereto; the
Fund's current Prospectus and Statement of Additional Information; and
resolutions of the Trust's Board of Trustees authorizing the appoint of the
Accounting Services Agent and approving this Agreement. The Trust shall
promptly provide to the Accounting Services Agent copies, properly
certified or authenticated, of all amendments or supplements to the
foregoing. The Trust shall provide to the Accounting Services Agent copies
of all other information which the Accounting Services Agent may reasonably
request for use in connection with its duties, including, but not limited
to, a certified copy of all Trust financial statements relating to the Fund
prepared by the Trust's independent public accountants. The Trust shall
also supply the Accounting Services Agent with such number of copies of the
current Fund Prospectus, Statement of Additional Information and
shareholder reports as the Accounting Services Agent shall reasonably
request.
3. PORTFOLIO ACCOUNTING SERVICES. The Accounting Services Agent shall
provide the portfolio accounting services set forth on Schedule B hereto,
as the same may be amended, from time to time. The Trust shall cooperate,
and shall request the Fund's investment advisor, custodian, transfer
agent/shareholder servicing agent, distributor, and the Trust's legal
counsel and independent public accountants to cooperate with the Accounting
Services Agent and to provide it with, such information, documents and
advice as the Accounting Services Agent may reasonably request in order to
enable the Accounting Services Agent to perform its duties hereunder.
4. RECORDKEEPING AND OTHER INFORMATION. The Accounting Services Agent
shall create and maintain all necessary 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, relating to the various
services performed by it and not otherwise created and maintained by
another party pursuant to contract with the Fund. All records shall be the
property of the Trust at all times and shall be available for inspection
and use by the Trust. Where applicable, such records shall be maintained
by the Accounting Services Agent for the periods and in the places required
by Rule 31a-2 under the 1940 Act.
5. AUDIT, INSPECTION AND VISITATION. The Accounting Services Agent
shall make available during regular business hours all records and other
data created and maintained pursuant to this Agreement for reasonable audit
and inspection by the Trust or any person retained by the Trust. Upon
reasonable notice by the Trust, the Accounting Services Agent shall make
available, during regular business hours, its facilities and premises
employed in connection with its performance of this Agreement for
reasonable visitation by the Trust, or any person retained by the Trust.
6. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as
otherwise provided herein, the Trust assumes full responsibility for
compliance with all applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended, the 1940 Act, and the rules thereunder,
and any other applicable laws, rules and regulations.
7. COMPENSATION. The Trust shall pay on behalf of the Fund to the
Accounting Services Agent as compensation for services rendered hereunder
the annual accounting services fee set forth in Schedule A hereto. The fee
shall be calculated and accrued daily and paid monthly. The Accounting
Services Agent shall also be reimbursed out of Fund assets for its
out-of-pocket expenses related to the performance of its duties hereunder,
including, without limitation, telecommunications charges, postage and
delivery services, record retention costs, reproduction charges and price
quotation costs. The Accounting Services Agent's monthly invoices for
accounting services fees and out-of-pocket expenses shall be paid within
five days of the month-end. If this Agreement becomes effective subsequent
to the first day of a month or terminates before the last day of a month,
the Accounting Services Agent shall be paid an accounting services fee out
of Fund assets that is prorated for that part of the month in which this
Agreement is in effect. All rights of compensation and reimbursement under
this Agreement for services performed by the Accounting Services Agent as
of the termination date shall survive the termination of this Agreement.
8. APPOINTMENT OF AGENTS. The Accounting Services Agent may, at any
time or times, in its discretion appoint (and may at any time remove) other
parties as its agent to carry out such provisions of this Agreement as the
Accounting Services Agent may from time to time direct; provided, however,
that the appointment of any such agent shall not relieve the Accounting
Services Agent of any of its responsibilities or liabilities hereunder.
9. USE OF ACCOUNTING SERVICES AGENT'S NAME. The Trust shall not use
the name of the Accounting Services Agent or any of its affiliates in the
Fund Prospectus, Statement of Additional Information, sales literature or
other material relating to the Fund in a manner not approved prior thereto
in writing by the Accounting Services Agent; provided, however, that the
Accounting Services Agent shall approve all uses of its and its affiliates'
names that merely refer, in accurate terms, to their appointments or that
are required by the Securities and Exchange Commission (the "SEC") or any
state securities commission; and further provided, that in no event shall
such approval be unreasonably withheld.
10. USE OF FUND'S NAME. Neither the Trust, the Accounting Services
Agent nor any of its affiliates shall use the name of the Fund or material
relating to the Fund on any forms (including any checks, bank drafts or
bank statements) for other than internal use in a manner not approved prior
thereto by the Fund's Advisor, Xxxxxxxxx Asset Management, Inc.; provided,
however, that the Fund shall approve all uses of its name that merely refer
in accurate terms to the appointment of the Accounting Services Agent
hereunder or that are required by the SEC or any state securities
commission; and further provided, that in no event shall such approval be
unreasonably withheld.
11. LIABILITY OF ACCOUNTING SERVICES AGENT. The duties of the
Accounting Services Agent shall be limited to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the
Accounting Services Agent hereunder. The Accounting Services Agent shall
not be liable for any error of judgement or mistake of law or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except to the extent of loss resulting from willful misfeasance,
bad faith, negligence or reckless disregard of its obligations and duties
under this Agreement. The Accounting Services Agent may consult counsel to
the Trust or the Trust's independent public accountants or other experts
with respect to any matter arising in connection with the Accounting
Services Agent's duties, and the Accounting Services Agent shall not be
liable for any action taken or omitted by the Accounting Services Agent, in
good faith, in reliance on the oral or written advice of such counsel,
accountants or other experts. The Accounting Services Agent shall not be
liable for any action taken or omitted in reliance on the oral or written
instruction, authorization, approval or information provided to the
Accounting Services Agent by any person reasonably believed by the
Accounting Services Agent to be authorized by the Trust to give such
instruction, authorization, approval or information. The Accounting
Services Agent shall not be liable for any loss, liability, damage or cost
arising out of the inaccuracy of prices quoted or corporate action
information supplied by any pricing service or the Trust, and used by the
Accounting Services Agent in calculating the daily net asset value of the
Fund. Moreover, the Accounting Services Agent shall have no responsibility
or duty to include information or valuations to be provided by the Trust
with respect to the Fund in any computation unless and until it is timely
supplied to the Accounting Services Agent in useful form and shall have no
duty to gather or record corporate action information not supplied by the
Trust, the Fund's custodian or pricing service. The Accounting Services
Agent shall not be liable or responsible for any acts or omissions of any
predecessor accounting services agent or any other persons having
responsibility for matters to which this Agreement relates prior to the
effective date of this Agreement nor shall the Accounting Services Agent be
responsible for reviewing any such acts or omissions. Any person, even
though also an officer, employee or agent of the Accounting Services Agent
or any of its affiliates, who may be or become an officer or Trustee of the
Trust, shall be deemed, when rendering services to the Trust as such
officer or Trustee to be rendering such services to or acting solely for
the Trust and not as an officer, employee or agent or one under the control
or direction of the Accounting Services Agent or any of its affiliates,
even though paid by one of those entities. As used in this Section 11
(except the preceding sentence) and in Section 12, the term "Accounting
Services Agent" shall include officers, employees and other agents of the
Accounting Services Agent.
12. INDEMNIFICATION. The Trust shall indemnify and hold harmless the
Accounting Services Agent out of Fund Assets against any and all liability,
loss, damage, claim and expense (including, without limitation, reasonable
attorneys' fees and disbursements and investigation expenses incident
thereto), arising directly or indirectly from any act or omission to act by
the Accounting Services Agent (i) in connection with the performance of its
duties under this Agreement or (ii) for which it is not liable pursuant to
Section 11 of this Agreement. This indemnity shall apply to any liability
and expense arising under applicable securities laws. The Accounting
Services Agent shall not be entitled to indemnity hereunder for any
liability or expense resulting from the Accounting Services Agent's own
willful misfeasance, bad faith, negligence or reckless disregard of its
duties and obligations under this Agreement. The right to indemnity
hereunder shall include the right to advancement of defense expenses out of
Fund assets in the event of any pending or threatened litigation; provided,
however, that the Accounting Services Agent shall agree that any
advancement of expenses shall be returned to the Trust for repayment to the
Fund with interest at an annual rate of prime plus one percent if it is
ultimately determined by an administrative or judicial tribunal that the
expenses (and related liability, if any) resulted from the Accounting
Services Agent's own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this Agreement.
The Accounting Services Agent shall give prompt written notice to the
Trust of a written assertion or claim of any threatened or pending legal
proceeding which may be subject to indemnity under this Section; provided,
however, that failure to notify the Trust of such written assertion or
claim shall not operate to relieve the Trust of any liability arising
hereunder. The Trust shall be entitled, if it so elects, to assume the
defense the cost to be paid out of Fund Assets of any suit brought to
enforce a claim subject to this Indemnity, and such defense shall be
conducted by counsel chosen by the Trust and satisfactory to the Accounting
Services Agent; provided, however, that if the defendants include both the
Accounting Services Agent and the Trust, and the Accounting Services Agent
shall have reasonably concluded that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Trust ("conflict of interest"), the Trust shall not have
the right to elect to defend such claim on behalf of the Accounting
Services Agent, and the Accounting Services Agent shall have the right to
select separate counsel to defend such claim on behalf of the Accounting
Services Agent. In the event that the Trust elects to assume the defense
of any claim pursuant to the preceding sentence and retains counsel
satisfactory to the Accounting Services Agent, the Accounting Services
Agent shall bear the fees and expenses of additional counsel retained by
it, except for reasonable investigation costs which shall be borne by the
Trust out of Fund assets. If the Trust (i) does not elect to assume the
defense of a claim, (ii) elects to assume the defense of a claim but
chooses counsel that is not satisfactory to the Accounting Services Agent,
or (iii) has no right to assume the defense of a claim because of a
conflict of interest, the Trust shall advance or reimburse the Accounting
Services Agent, at the election of the Accounting Services Agent out of
Fund assets, reasonable fees and expenses of any counsel retained by the
Accounting Services Agent, including reasonable investigation costs
providing such fees and expenses are reimbursable to the Accounting
Services Agent according to the terms of this Agreement.
13. SCOPE OF DUTIES. The Accounting Services Agent and the Trust
shall regularly consult with each other regarding the Accounting Services
Agent's performance of its obligations and its compensation under the
foregoing provisions. In connection therewith, the Trust shall submit to
the Accounting Services Agent, at a reasonable time in advance of filing
with the SEC, copies of any amendments or supplements to the Registration
Statement of the Trust relating to the Fund (including exhibits) under the
1940 Act and the 1933 Act, and, at a reasonable time in advance of their
proposed use, copies of any amended or supplemented forms relating to any
plan, program or service offered by the Trust with respect to the Fund.
Any change in such materials that would require any change in the
Accounting Services Agent's obligations under the foregoing provisions
shall be subject to the Accounting Services Agent's approval. In the event
that a change in such documents or in the procedures contained therein
increases the cost or burden to the Accounting Services Agent of performing
its obligations hereunder, the Accounting Services Agent shall be entitled
to receive additional reasonable compensation therefor.
14. DURATION. This Agreement shall become effective as of the date
first written above and shall continue in force for two years from that
date (the "Initial Term"). Thereafter, this Agreement shall continue in
force from year to year (each a "Successive Term"), provided continuance
after the Initial Term is approved at least annually by the vote of a
majority of the Trustees of the Trust.
15. TERMINATION. This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of
its assignment, unless agreed to by the parties hereto.
b. Either the Trust or the Accounting Services Agent may terminate
this Agreement prior to the commencement of any Successive Term by
providing to the other party at least 90 days prior written notice of
such termination.
c. Either of the parties (the "terminating party") may terminate
this Agreement during the Initial Term or any Successive Term in the
event of a material breach of this Agreement by one of the other
parties (the "breaching party"), provided the terminating party has
given to the breaching party written notice of such breach, and the
breaching party has not remedied such breach within 45 days after
receipt of such notice.
Upon the termination of this Agreement, the Trust shall pay out of Fund
assets to the Accounting Services Agent such compensation and out-of-pocket
expenses as may be payable for the period prior to the effective date of
such termination. In the event the Trust designates a successor to any of
the Accounting Services Agent's obligations hereunder, the Accounting
Services Agent shall, at the expense and direction of the Trust out of Fund
assets, transfer to such successor all relevant books, records and other
data established or maintained by the Accounting Services Agent under the
foregoing provisions.
Sections 7, 9, 10, 11, 12, 15, 16, 20, 21, 22, 23, 24 and 25 shall
indefinitely survive any termination of this Agreement.
16. FORCE MAJEURE. The Accounting Services Agent shall not be liable
for any delays or errors in the performance of its obligations hereunder
occurring by reason of circumstances not reasonably foreseeable and beyond
its control, including, but not limited to, acts of civil or military
authority, national emergencies, work stoppages, fire, flood, catastrophe,
acts of God, insurrection, war, riot or failure of communication or power
supply. In the event of equipment breakdowns which are beyond the
reasonable control of the Accounting Services Agent and not primarily
attributable to the failure of the Accounting Services Agent to reasonably
maintain or provide for the maintenance of such equipment, the Accounting
Services Agent shall, at no additional expense to the Trust, take
reasonable steps in good faith to minimize service interruptions, but shall
have no liability with respect thereto.
17. AMENDMENT. The terms of this Agreement shall not be waived,
altered, modified, amended or supplemented in any manner whatsoever except
by a written instrument signed by the Accounting Services Agent and the
Trust.
18. NON-EXCLUSIVE SERVICES. The types of services rendered by the
Accounting Services Agent hereunder are not exclusive. The Accounting
Services Agent may render such services to any other investment company and
have other businesses and interests.
19. DEFINITIONS. As used in this Agreement, the terms "assignment"
and "interested person" shall have the respective meanings specified in the
1940 Act and the rules enacted thereunder as now in effect or hereafter
amended.
20. CONFIDENTIALITY. The Trust and the Accounting Services Agent
shall treat confidentially and as proprietary information of the Fund all
records and other information relating to the Fund and prior, present or
potential shareholders and shall not use such records and information for
any purpose other than performance of its responsibilities and duties
hereunder, except as may be required by administrative or judicial
tribunals or as requested by the Advisor, Xxxxxxxxx Asset Management, Inc.
21. NOTICE. Any notices and other communications required or
permitted hereunder shall be in writing and shall be effective upon
delivery by hand or upon receipt if sent by certified or registered mail
(postage prepaid and return receipt requested) or by a nationally
recognized overnight courier service (appropriately marked for overnight
delivery) or upon transmission if sent by telex or facsimile (with request
for immediate confirmation of receipt in a manner customary for
communications of such respective type and with physical delivery of the
communication being made by one or the other means specified in this
Section 21 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Trust:
Declaration Trust
000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
ATTN: Xx. Xxxxxxx X. Xxxxx, Secretary
with a copy to:
Xxxxxxxxx Asset Management, Inc.
000 Xxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Mr. C. Xxxxx Xxxxxxxxx
(b) if to the Accounting Services Agent:
Declaration Service Company
000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxx, President
or to such other respective addresses as the Advisor, the Trust, or the
Accounting Services Agent shall designate by like notice, provided that
notice of a change of address shall be effective only upon receipt thereof.
22. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
23. GOVERNING LAW. This Agreement shall be administered, construed
and enforced in accordance with the laws of the Commonwealth of
Pennsylvania to the extent that such law is not preempted by the provisions
of any law of the United States heretofore or hereafter enacted, as the
same may be amended from time to time.
24. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached
hereto) contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes all prior written or
oral agreements and understandings with respect thereto.
25. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction. This Agreement may be executed in
two counterparts, each of which taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
DECLARATION FUND with respect to
The Michigan Heritage Fund
/S/ Xxxxxxx X. Xxxxx
By: -------------------------------
Xxxxxxx X. Xxxxx, Secretary
DECLARATION SERVICE COMPANY
/S/ Xxxxxxx X. Xxxxx
By: ------------------------------
Xxxxxxx X. Xxxxx, President
SCHEDULE A
The Michigan Heritage Fund
Portfolio and Fee Schedule
Portfolios covered by Accounting Services Agreement:
The Michigan Heritage Fund
Fees for accounting services
on behalf of the Portfolios:
System setup $75.00/hour Inside personnel
$150.00/hour Outside personnel
First Class of Shares/ portfolio $ 22,000 Annually
Each additional class/ portfolio 10,000
Plus standard out of pocket expenses including (but not limited to):
postage, courier, telephone line, travel (subject to pre-approval by C.
Xxxxx Xxxxxxxxx unless such travel is required to perform Accounting
Services duties under this Agreement), price quotation services, Fund
specific costs related to Fund/SERV and Networking, printing, bank service
charges, wire charges, and other standard miscellaneous items.
SCHEDULE B
Accounting Services Provided by Declaration Services Company
1. Journalize each Portfolio's investment, capital share and income and
expense activities;
2. Verify investment buy/sell trade tickets when received from the advisor
and transmit trades to the Fund's custodian for proper settlement;
3. Maintain individual ledgers for investment securities;
4. Maintain historical tax lots for each security;
5. Reconcile cash and investment balances of each Portfolio with the
custodian, and provide the advisor with the beginning cash balance
available for investment purposes;
6. Update the cash availability throughout the day as required by the
advisor;
7. Post to and prepare each Portfolio's Statement of Assets and Liabilities
and Statement of Operations;
8. Calculate expenses payable pursuant to the Fund's various contractual
obligations;
9. Control all disbursements from the Fund on behalf of each Portfolio and
authorize such disbursements upon instructions of the Fund;
10. Calculate capital gains and losses;
11. Determine each Portfolio's net income;
12. At the Portfolio's expense, obtain security market prices or if such
market prices are not readily available, then obtain such prices from
services approved by the advisor, and in either case calculate the
market or fair value of each Portfolio's investments;
13. Where applicable, calculate the amortized cost value of debt
instruments;
14. Transmit or mail a copy of the portfolio valuations to the advisor;
15. Compute the net asset value of each Portfolio;
16. Report applicable net asset value and performance data to performance
tracking organizations;
17. Compute each Portfolio's yields, total returns, expense ratios and
portfolio turnover rate;
18. Prepare and monitor the expense accruals and notify Fund management of
any proposed adjustments;
19. Prepare monthly financial statements, which will include, without
limitation, the Schedule of Investments, the Statement of Assets and
Liabilities, the Statement of Operations, the Statement of Changes in
Net Assets, the Cash Statement, and the Schedule of Capital Gains and
Losses;
20. Prepare monthly security transactions listings;
21. Prepare monthly broker security transactions summaries;
22. Supply various Fund and Portfolio statistical data as requested on an
ongoing basis;
23. Assist in the preparation of support schedules necessary for
completion of Federal and state tax returns;
24. Assist in the preparation and filing of the Fund's annual and
semiannual reports with the SEC on Form N-SAR;
25. Assist in the preparation and filing of the Fund's annual and
semiannual reports to shareholders and proxy statement;
26. Assist with the preparation of amendments to the Fund's Registration
Statements on Form N-1A and other filings relating to the registration
of shares;
27. Monitor each Portfolio's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended
from time to time ("Code");
28. Determine the amount of dividends and other distributions payable to
shareholders as necessary to, among other things, maintain the
qualification as a regulated investment company of each Portfolio of
the Fund under the Code; and
29. Provide other accounting services as may be agreed from time to time
in writing by the Fund and the Accounting Services Agent.
