EXHIBIT 9(E)
THE MICHIGAN HERITAGE FUND
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION 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 series of the Trust and Declaration Service
Company (the "Administrator"), a Pennsylvania corporation.
WITNESSETH THAT:
WHEREAS, the Trust, an open-end, diversified management investment
company is registered 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, the 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 (hereafter the "Portfolio" or
"Portfolios") and
WHEREAS, the Trust with respect to the Fund and the Administrator
desire to enter into this Agreement pursuant to which the Administrator
will provide administrative 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
Administrator, intending to be legally bound hereby, agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Trust on behalf of the Fund
hereby appoints the Administrator to perform the services, described in
this Agreement, for the Portfolios of the Fund identified on Schedule A,
and the Administrator hereby accepts such appointment. The Administrator
shall act under such appointment pursuant to the terms and conditions
hereinafter set forth.
2. FUND DOCUMENTS. The Trust has provided to the Administrator
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 appointment of
the Administrator and approving this Agreement. The Trust shall promptly
provide to the Administrator copies of all other information which the
Transfer Agent may reasonably request for use in connection with the 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
Administrator with such number of the current Fund Prospectus, Statement of
Additional Information and shareholder reports as the Administrator shall
reasonable request.
3. PORTFOLIO ADMINISTRATIVE SERVICES. Subject to the direction and
control of the Board of Trustees of the Trust and to the extent not
otherwise the responsibility of, or provided by, the Trust or other agents
with respect the Fund, the Administrator shall provide to the portfolio(s)
the administrative 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, accounting services agent, legal counsel and
independent public accountants to cooperate with the Administrator and to
provide it with, such information, documents and advice as the
Administrator may reasonably request in order to enable the Administrator
to perform its duties hereunder. The Administrator shall provide office
space, facilities, equipment and personnel necessary to perform its
obligations under this Agreement.
4. ALLOCATION OF EXPENSES. The Administrator shall bear all costs and
expenses associated with its obligation to provide the office space,
facilities, equipment and personnel necessary to perform its duties under
this Agreement, including compensation of officers of the Trust who are
affiliated persons of the Administrator (if applicable). The Trust shall
pay out of Fund portfolio assets, all expenses other than those expressly
stated to be payable by the Administrator hereunder, which expenses payable
by the Trust out of portfolio assets shall include, without limitation:
organizational expenses; fees and expenses payable to the Fund's investment
advisor, custodian, transfer agent/shareholder servicing agent,
distributor, accounting services agent, legal counsel and independent
public accountants; all out-of-pocket expenses incurred by the
Administrator in connection with the provision of administrative services
hereunder; the cost of obtaining quotations for calculating the value of
the assets of each Portfolio; taxes levied against the Fund or any
Portfolio; brokerage fees, xxxx-ups and commissions in connection with the
purchase and sale of Portfolio securities; costs, including the interest
expense, of borrowing money; costs and/or fees incident to holding meetings
of the Trust's Board of Trustees and Fund shareholders; costs and/or fees
related to preparation (including typesetting and printing charges) and
mailing of copies of the Fund's Prospectus, Statement of Additional
Information, reports and proxy materials to the existing shareholders of
the Fund and filing of reports with regulatory bodies; costs and/or fees
related to maintenance of the Fund's existence; costs and/or fees of
initial and on-going registration of Fund Shares with Federal and state
securities authorities; costs of printing share certificates representing
shares of the Fund; fees payable to, and expenses of, Trustees who are not
"interested persons" of the Trust; premiums payable on the fidelity bond
required by Section 17(g) of the 1940 Act, and any other premiums payable
on insurance policies related to the Fund's business and the investment
activities of its Portfolios; fees, voluntary assessments and other
expenses incurred in connection with the Fund's membership in investment
company organizations; and such non-recurring expenses as may arise,
including actions, suits or proceedings to which the Fund as a series of
the Trust is a party and the legal obligation which the Trust may have to
indemnify Trustees and officers of the Trust with respect thereto. To the
extent that any such fees and expenses are allocable to more than one Fund
Portfolio or to other series funds of Declaration Fund or to Declaration
Fund and to the extent that other fees and expenses of other series funds
and Declaration Fund are allocable in part to the Fund and the Portfolios,
then the Fund and/or the Fund portfolios shall pay the proportionate share
of such fees and expenses in such amount as shall be determined by the
Board of Trustees after consultation with the Fund's accountants.
5. RECORDKEEPING AND OTHER INFORMATION. The Administrator 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 a
contract with the Trust with respect to 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 Administrator for the periods and in the places required by Rule
31a-2 under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. The Administrator 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 Fund's Advisor, Xxxxxxxxx Asset Management, Inc.,
the Administrator 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 Fund's Advisor, or any person
retained by the Fund's Advisor.
7. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as
otherwise provided herein, the Trust assumes full responsibility for
ensuring that the Fund is in 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.
8. COMPENSATION. The Trust shall pay to the Administrator out of Fund
assets, as compensation for its services rendered hereunder, the annual fee
set forth in Schedule A. The fee shall be calculated and accrued daily, and
paid monthly. The Trust shall also reimburse the Administrator 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 traveling and lodging expenses incurred by
officers and employees of the Administrator (subject to the prior approval
of the Advisor's principal, C. Xxxxx Xxxxxxxxx, unless such travel is
required to perform the Administrator's duties under this Agreement). The
Trust shall pay out of Fund assets the Administrator's monthly invoices for
administration fees and out-of-pocket expenses within five days after the
end of the preceding month. If this Agreement becomes effective subsequent
to the first day of a month or terminates before the last day of a month,
the Trust shall pay to the Administrator out of Fund assets an
administration fee 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 Administrator as of the
termination date shall survive the termination of this Agreement.
9. APPOINTMENT OF AGENTS. The Administrator 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 Administrator,
may from time to time, direct; provided, however, that the appointment of
any such agent shall not relieve the Administrator of any of its
responsibilities or liabilities hereunder.
10. USE OF ADMINISTRATOR'S NAME. The Trust and the Fund shall not use
the name of the Administrator or any of its affiliates in the Fund's
Prospectus, Statement of Additional Information, sales literature or other
material relating to the Trust or the Fund in a manner not approved prior
thereto in writing by the Administrator; provided, however, that the
Administrator shall approve all uses of its and its affiliates' names that
merely refer in accurate terms to their appointments hereunder 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.
11. USE OF FUND'S NAME. Neither the Trust, the Administrator 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; provided, however, that the Fund's Advisor
shall approve all uses of the Fund's name that merely refer in accurate
terms to the appointment of the Administrator 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.
12. LIABILITY OF ADMINISTRATOR. The duties of the Administrator shall
be limited to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Administrator hereunder. The
Administrator shall not be liable for any error of judgement or mistake of
law or for any loss suffered by the Trust and the Fund in connection with
the matters to which this Agreement relates, except to the extent of a loss
resulting from willful misfeasance, bad faith, negligence or reckless
disregard of its obligations and duties under this Agreement. The
Administrator 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 Administrator's duties, and the Administrator shall not
be liable for any action taken or omitted by the Administrator in good
faith in reliance on the oral or written advice of such counsel,
independent public accountants or other experts. The Administrator shall
not be liable for any action taken or omitted by the Administrator in
reliance on the oral or written instruction, authorization, approval or
information provided to the Administrator by any person reasonably believed
by the Administrator to be authorized by the Trust to give such
instruction, authorization, approval or information. The Administrator
shall not be liable or responsible for any acts or omissions of any
predecessor administrator or any other persons having responsibility for
matters to which this Agreement relates prior to the effective date of this
Agreement nor shall the Administrator be responsible for reviewing any such
acts or omissions. Any person, even though also an officer, employee or
agent of the Administrator 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 with respect to the Fund as such officer or Trustee, to be
rendering such services to or acting solely for the Trust with respect to
the Fund and not as an officer, employee or agent or one under the control
or direction of the Administrator or any of its affiliates, even though
paid by one of those entities. As used above in this Section 12 (except
the previous sentence) and in Section 13, the term "Administrator" shall
include officers, employees and other agents of the Administrator.
13. INDEMNIFICATION. The Trust out of Fund assets shall indemnify and
hold harmless the Administrator 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 Administrator (i) in connection with the performance of its duties
under this Agreement or (ii) for which it is not liable pursuant to Section
12 or Section 17 of this Agreement. This indemnity shall apply to any
liability and expense arising under applicable securities laws. The
Administrator shall not be entitled to indemnity hereunder for any
liability or expense resulting from the Administrator'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 in the event of any
pending or threatened litigation; provided, however, that the Administrator
shall agree that any advancement of expenses shall be returned 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 Administrator's
own wilful misfeasance, bad faith, negligence or reckless disregard of its
duties and obligations under this Agreement.
The Administrator shall give prompt written notice to the Trust of a
written assertion or claim or any threatened or pending legal proceeding
which may be subject to indemnity under this Section; provided, however,
that the Administrator's failure to notify the Trust of such threatened or
pending legal proceeding 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 of any claim subject to this Indemnity and such
defense shall be conducted by counsel chosen by the Trust and satisfactory
to the Administrator; provided, however, that if the defendants include
both the Administrator and the Trust, and the Administrator 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 the claim on behalf of the Administrator, and the Administrator
shall have the right to select separate counsel to defend such claim on
behalf of the Administrator. 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 Administrator, the Administrator 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 Administrator, 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 Administrator out of Fund assets, at the
election of the Administrator, reasonable fees and expenses of any counsel
retained by the Administrator, including reasonable investigation costs
providing such fees and expenses are reimbursable to the Administrator
according to the terms of this Agreement.
14. SCOPE OF DUTIES. The Administrator and the Trust shall regularly
consult with each other regarding the Administrator's performance of its
obligations and its compensation under the foregoing provisions. In
connection therewith, the Trust shall submit to the Administrator at a
reasonable time in advance of filing with the SEC copies of any amended or
supplemented 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 with
respect to the Fund. Any change in such materials that would require a
change in the Administrator's obligations under this Agreement shall be
subject to the Administrator's approval. In the event that a change in
such documents or in the procedures contained therein increases the cost or
burden to the Administrator of performing its obligations hereunder, the
Administrator shall be entitled to receive reasonable compensation
therefor.
15. DURATION. This Agreement shall become effective on 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.
16. 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 Administrator 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. Any of the parties (the "terminating party") may immediately
terminate this Agreement during the Initial Term or any Successive Term
in the event of a material breach of this Agreement by the other party
(the "breaching party"), provided that 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 to the
Administrator out of Fund Assets 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 Administrator's obligations hereunder, the Administrator shall, at the
expense and direction of the Trust, transfer to such successor all relevant
books, records and other data established or maintained by the
Administrator under the foregoing provisions.
Sections 4, 8, 10, 11, 12, 13, 16, 17, 21, 22, 23, 24 and 25 shall
survive any termination of this Agreement.
17. FORCE MAJEURE. The Administrator 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 communications or power supply.
In the event of equipment breakdowns which are beyond the reasonable
control of the Administrator and not primarily attributable to the failure
of the Administrator to reasonably maintain or provide for the maintenance
of such equipment, the Administrator shall, at no additional expense to the
Fund, take reasonable steps in good faith to minimize service
interruptions, but shall have no liability with respect thereto.
18. 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 Administrator and the Trust.
19. NON-EXCLUSIVE SERVICES. The types of administrative services
rendered by the Administrator hereunder are not exclusive. The
Administrator may render such services to any other investment company and
have other businesses and interests.
20. DEFINITIONS. As used in this Agreement, the terms "assignment"
and "interested person" shall have the respective meanings thereof set
forth in the 1940 Act and the rules enacted thereunder as now in effect or
hereafter amended.
21. CONFIDENTIALITY. The Trust and the Administrator shall treat
confidentially and as proprietary information of the Fund all records and
other information related 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 Fund's Advisor.
22. 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 22 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 Administrator:
Declaration Service Company
000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxx, President
or to such other respective addresses as the parties shall designate by
like notice, provided that notice of a change of address shall be effective
only upon receipt thereof.
23. 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.
24. 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 laws are 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.
25. 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.
26. 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 Administration Agreement:
The Michigan Heritage Fund
Fees for administrative services on
behalf of the Portfolios:
System setup $75.00/hour Inside personnel
$150.00/hour Outside personnel
First Class Shares/Portfolio $24,000 Annually
Each additional class/portfolio 6,000 Annually
Plus standard out of pocket expenses including (but not limited to):
postage, courier, telephone line, travel (subject to per-approval by
C. Xxxxx Xxxxxxxxx unless such travel is required to perform Administrative
duties under this Agreement), Fund specific costs related to Fund/SERV and
Networking, printing, copying, and other standard miscellaneous items.
SCHEDULE B
Administrative Services Provided by Declaration Services Company
1. Provide overall day-to-day Fund administrative management, including
coordination of investment advisor, custodian, transfer agency,
distribution, and pricing and accounting activities.
2. Assist the Fund and Trust counsel with the design and development of the
Fund, including investment objectives, policies and structure of new
Portfolios.
3. Assist Trust counsel with the preparation of Registration Statements,
Prospectuses, Statements of Additional Information, and proxy
materials.
4. Prepare and file such reports, applications and documents as may be
necessary or desirable to register the Fund's shares with the Federal
and state securities authorities, and monitor the sale of Fund shares
for compliance with Federal and state securities laws;
5. Prepare and file Semi-Annual Report on Form N-SAR.
6. Prepare and file reports to shareholders, including the annual report to
shareholders, and coordinate mailing Prospectuses, notices, proxy
statements, proxies and other reports to shareholders.
7. Assist with layout and printing of shareholder communications, including
Prospectuses and reports to shareholders.
8. Administer contracts on behalf of the Fund with, among others, the
Fund's investment advisor, custodian, transfer agent/shareholder
servicing agent, distributor, and accounting services agent.
9. Coordinate the representations of outside legal counsel and independent
public accountants to the Fund.
10. Assist Fund in obtaining fidelity bond and Trustees and
officers/errors and omissions insurance policies for the Fund in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act, as such bonds and policies are approved by the Fund's Board
of Trustees.
11. Prepare and maintain materials for Trust's Trustee meetings including,
agendas, minutes, attendance records and minute books.
12. Coordinate shareholder meetings, including assisting Trust counsel in
preparation of proxy materials, preparation of minutes and tabulation
of results.
13. Monitor and pay Fund bills, maintain Fund budget and report budget
expenses and variances to Fund management.
14. Monitor the Fund's compliance with the investment restrictions and
limitations imposed by the 1940 Act and state Blue Sky laws and
applicable regulations thereunder, the fundamental and non-fundamental
investment policies and limitations set forth in the Fund's
Prospectuses and Statement of Additional Information, and the
investment restrictions and limitations necessary for each Portfolio of
the Fund to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code of 1986, as amended, or any successor
statute.
15. Prepare and distribute to appropriate parties notices announcing the
declaration of dividends and other distributions to shareholders.
16. Provide personnel to serve as officers of the Fund if so elected by
the Board of Trustees of the Trust.
17. Provide other administrative services as may be agreed from time to
time in writing by the Trust, the Fund and the Administrator.
