AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON 3/11/97
FILE NOS: 811-3176 & 2-72066
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION
STATEMENT UNDER THE SECURITIES
ACT OF 1933 / X /
Pre-Effective Amendment No. 27 / /
Post-Effective Amendment No. 27 / X /
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 27
(Check appropriate box or boxes.)
DECLARATION FUND
(formerly Consolidated Asset Management Fund)
(Exact name of Registrant as Specified in Charter)
Suite 6160, 555 North
Conshohocken, PA 19428
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
(610) 832-1075
Terence P. Smith, Suite 6160
555 North Lane, Conshohocken, PA 19428
(Name and Address of Agent for Service)
Please send copy of communications to:
MARTIN V. MILLER, ESQUIRE
P.O. Box 2512
Doylestown, Pennsylvania 18901
215-345-7110
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective
(check appropriate box):
/ / immediately upon filing pursuant to paragraph (b)
/ / on _____________ pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a) (1)
/ / on _____________ pursuant to paragraph (a) (1)
/ X / 75 Days after filing pursuant to paragraph (a) (2)
/ / on _____________ pursuant to paragraph (a) (2) of rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
EXHIBIT INDEX BEGINS ON PAGE __.
FORM N-1A
CROSS REFERENCE SHEET
Form N-1A Part A - MICHIGAN HERITAGE FUND
ITEM NO. PROSPECTUS LOCATION
- -------- -------------------
1. Cover Page .................. Cover Page
2. Synopsis .................... Summary of Fees and Expenses
3. Condensed Financial
Information ................. Not Applicable
4. General Description of
Registrant .................. The Fund, Investment Objectives,
Investment Policies and Risks.
Special Factors Affecting
Investments in Michigan Companies.
5. Management of the
Fund ........................ Trustees, The Investment Advisor,
The Administrator, The Distributor
6. Capital Stock and
Other Securities ............ General Information,
Distribution and Taxes
7. Purchase of Securities
Being Offered ............... How to Purchase Shares,
Shareholder Services
Rule 12b-1 Distribution Plan
Valuing Fund Shares:
Performance Information
Shareholder Services
8. Redemption or
Repurchases ................. How to Redeem Shares
Valuing Fund Shares
9. Pending Legal
Proceedings ................. Not Applicable
<PAGE>
FORM N-1A PART B MICHIGAN HERITAGE FUND
LOCATION OF STATEMENT
ITEM NO. OF ADDITIONAL INFORMATION
- -------- -------------------------
10. Cover Page .................. Cover Page
11. Table of Contents ........... Table of Contents
12. General Information and
History ..................... General Information
13. Investment Objectives
and Policies ................ Investment Objective and Policies;
Investment Limitations;
Portfolio Transactions
14. Management of
Fund ........................ Management of the Fund;
Investment Advisory Services;
Trustees and Officers of
Declaration Fund
15. Control Persons
Principal Holders
of Securities ............... Control Persons and Principal Holders of
Securities of Cash Account
16. Investment Advisory
and Other
Services .................... Investment Advisory Services; Administrative
Services; Transfer Agency and Other
Services; and Custodian; Independent Public
Accountants
17. Brokerage Allocation ........ Brokerage
18. Capital Stock and Other
Securities .................. Not Applicable
19. Purchase, Redemption and
Pricing of Securities
Being Offered ............... Additional Information
20. Tax Status .................. Tax Status
21. Underwrites ................. Rule 12b-1 Distribution Plan;
Distribution Agreement
22. Calculation of Performance
Data ........................ Calculation of Performance Data
23. Financial Statements......... None
<PAGE>
FORM N-1A PART C
ITEM NO. LOCATION IN PART C
- -------- ------------------
24. Financial Statements......... None
25. Persons Controlled by or
Under Common Control
with Registrant ............. Persons Controlled by or Under
Common Control with Registrant
26. Number of Holders of
Securities .................. Number of Holders of Securities
27. Indemnification ............. Indemnification
28. Business and Other
Connections of Investment
Advisor ..................... Business and Other Connections
of Investment Advisor
29. Principal
Underwriters ................ Principal Underwriters
30. Location of Accounts
and Records ................. Location of Accounts and Records
31. Management Services ......... Management Services
32. Undertakings ................ Undertakings
<PAGE>
PART A: PROSPECTUS
THE MICHIGAN HERITAGE FUND
A Series of The Declaration Fund
THE MICHIGAN HERITAGE FUND
301 MAC Avenue
Suite 120
East Lansing, MI 48823
1-800-___-____
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
PROSPECTUS
______, 1997
The Michigan Heritage Fund's objective is long-term growth through
capital appreciation. The Fund seeks to achieve this goal mainly by
investing in a diversified portfolio of companies that have headquarters in
the State of Michigan or companies based elsewhere that have significant
operations (as defined by the Fund's Advisor) in the State of Michigan.
There can be no guarantee the investment objective of the Fund will be
achieved.
The Fund is a No-Load Fund. This Prospectus provides the information a
prospective investor ought to know before investing and should be retained
for future reference. A Statement of Additional Information has been filed
with the Securities and Exchange Commission (the "SEC") dated May 1, 1997,
which is incorporated herein by reference and can be obtained without
charge by calling the Fund at the phone number listed above. The SEC
maintains a Web Site (http://www/sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding registrants that file electronically with the SEC.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN THE FUND INVOLVE INVESTMENT
RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<PAGE>
SUMMARY OF FEES AND EXPENSES
The following summary is provided to assist you in understanding the
various costs and expenses a shareholder in the Fund could bear directly
and indirectly. Annual operating expenses are shown as a percentage of
average daily net assets. Because shares of the Fund were not offered
prior to the date of this prospectus, annual operating expenses of the Fund
are based on estimated expenses. Shareholder transaction expenses for the
Fund are expressed as a percentage of the public offering price, cost per
transaction or as otherwise noted. The Example should not be considered a
representation of future Fund performance or expenses, both of which may vary.
Shareholder Transaction Expenses
Maximum sales charge on purchases.................................... 0%
Maximum deferred sales charge imposed on redemption ................ 0%
Maximum sales charge imposed on dividend reinvestment .............. 0%
Redemption Fees .................................................... 0%
Account Closing Fee ................................................ $10
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee .......................................................1.00%
12b-1 Fee ............................................................ .25%
Other Expenses,* (including Transfer Agency
and Accounting Services Fees).......................................... .50%
Total Fund Operating Expenses ..........................................1.75%
*Other expenses are based on estimated amounts for the current fiscal year.
A $10.00 wire fee will be charged on wire purchases of less than $1,000.
HYPOTHETICAL EXAMPLE OF EFFECT ON FUND EXPENSES
You would pay the following expenses on a $1,000 investment if, for
each year for the next three years, Fund expenses are as described above
and annual return is 5%.
1 YEAR 3 YEARS
------ -------
Assuming a complete redemption at end of period 28 65
------ -------
Assuming no redemption at end of period 18 55
------ -------
THE FUND
The Michigan Heritage Fund (the "Fund") was organized as a series of
Declaration Trust (the "Trust") on February 19, 1997, and commenced
operations on ________, 1997. This Prospectus offers shares of the Fund.
Each share represents an undivided, proportionate interest in the Fund.
The investment advisor to the Fund is Dickinson Asset Management, Inc.
(the "Advisor").
INVESTMENT OBJECTIVES
The Fund's investment objective is long-term growth through capital
appreciation. The Fund seeks to achieve this goal mainly by investing in a
diversified portfolio of companies that have headquarters in the State of
Michigan or companies based elsewhere that have significant operations in
the State of Michigan (as defined by the Fund's Advisor). There can be no
guarantee the investment objective of the Fund will be achieved. The
Fund's investment objective may not be changed without shareholder
approval.
The Fund's Advisor believes that Michigan is positioned to provide
publicly-traded companies and their shareholders significant opportunities
for growth. Due to its central location among the largest markets in the
U.S. and Canada, Michigan offers businesses access to half of the
population and personal income of both countries. Michigan's own sizable
consumer market of 9.3 million had an average per capita income of
approximately $22,300 in 1994. Long known as a leader in manufacturing,
Michigan's large industrial market generated a demand for products and
services of more than $170 billion in 1992. In 1994 Michigan was ranked #2
of states having the most companies listed in the Top 20 of the Fortune
500. While the State's economy still benefits from its strong ties to the
automobile industry, Michigan's economy continues to become more diverse.
The State has one of the most advanced telecommunications infrastructures
in the nation, at one time, having more fiber optic cable installation than
any other state. Virtually every city and town is connected through fiber
optic networks. Also, Michigan is the most Internet-connected state in the
Midwest - 90% of Michigan's population can dial the Internet via a local
phone call. International trade is assuming increasing importance in
Michigan's economy. Commercial airports, and the Great Lakes and St.
Lawrence Seaway give the state easy access to world markets and the State
was the nation's 4th largest exporter in 1994. Detroit was the nation's
top exporting metropolitan area in 1994 and 1995. The U.S.-Canadian Free
Trade Agreement has spurred activity between Michigan and Canada, already
one of the world's largest trading relationships.
The Advisor believes that the Fund will provide a positive influence on
the Michigan economy by stimulating investor interest and awareness in
Michigan companies.
INVESTMENT POLICIES AND RISKS
To pursue its objective, the Fund will invest at least 65 percent of
the value of its total assets in common stocks, preferred stocks,
securities convertible into common and preferred stocks, and American
Depository Receipts (ADRs) traded on a U.S. stock exchange, issued by firms
whose headquarters are located in the State of Michigan or companies based
elsewhere having significant operations in the State of Michigan.
The Fund may also invest up to 35 percent of the value of its total
assets in other common stocks, preferred stocks, investment-grade corporate
bonds and notes, and high quality short-term debt securities such as
commercial paper, bankers' acceptances, certificates of deposit, repurchase
agreements, obligations insured or guaranteed by the United States
Government or its agencies, demand and time deposits of domestic banks and
United States branches and subsidiaries of foreign banks, and money market
funds.
The Fund will not engage in direct investment in real estate. The fund
may invest in Real Estate Investment Trusts (REITS) that are traded on one
of the principal U.S. stock exchanges.
The Fund will invest in a diverse group of companies with varying
degrees of name recognition. The portfolio will include companies in a
wide range of industries, from basic consumer goods and autos to high-tech
services. Investments are based primarily on fundamental analysis. While
technical factors will be considered, the main investment criteria will
focus on an evaluation of revenues, earnings, debt, capitalization, quality
of management, level of insider ownership, changing market conditions, past
performance and future expectations. The fund will strive to invest in
companies that have well defined business plans and long-term operating
strategies designed to increase shareholder value. The Fund will not
concentrate its investments in one industry, however, it may invest up to
25% of the value of its' assets in one industry. This policy may not be
changed without shareholder approval.
When evaluating a Michigan-based company, a member of the Advisor's
portfolio management or research staff may conduct an in-person visit to
the company whenever such a visit is judged appropriate, may meet with the
company's management, and evaluate its operations. The Advisor will also
attempt to interview a cross section of the company's employees, customers,
suppliers and competitors. The Advisor believes that this "hands on"
approach to investing will give it an opportunity to spot developing trends
in these Michigan companies.
The Fund does not propose to engage in short-term trading. However, it
may, form time to time, sell a security without regard to the length of
time it has been held. The fund does not expect that its' portfolio
turnover rate will exceed 75% for its' first fiscal year. High portfolio
turnover rates increase transaction costs and the possibility of realizing
taxable capital gains.
The principal risk factor associated with an investment in the Fund is
that the market value of the portfolio's securities may decrease and result
in a decrease in the value of a shareholder's investment.
The Fund's portfolio may include smaller companies that are not
nationally recognized and companies that ordinarily pay no dividends or
interest. The price of the stocks of such companies are generally more
volatile than those of larger or more mature companies. Additionally, the
securities of such companies are generally more likely to be negatively
affected by adverse economic and/or market conditions, and are generally
less liquid.
Due to the geographic limitation of 65% if the Fund's assets, such
assets may be subject to greater risk of loss from economic, political or
other developments (e.g., natural disasters) having an unfavorable impact
upon businesses located in Michigan than similar funds whose investments
are geographically more diverse (i.e. the Fund may be less diversified than
other funds with similar investment objectives but no such geographic
limitation). There can be no assurance that the economy of Michigan or the
companies headquartered or operating in Michigan will grow in the future.
Since the Fund will be mainly investing in a diversified portfolio of
companies that have their headquarters in the State of Michigan, or
companies based elsewhere that have significant operations in Michigan,
Fund investments can be significantly affected by business trends and the
economic health of Michigan. The following is a brief description of
certain factors affecting the Michigan Heritage Fund. The summary does not
purport to be complete and is based upon information derived from publicly
available documents.
SPECIAL FACTORS AFFECTING INVESTMENTS IN MICHIGAN COMPANIES
Home to the "Big Three" automobile manufacturers, Michigan's automobile
industry has historically played a prominent role in the State's economy.
As of 1995, 48.7% of all manufacturing in the State was auto related, 1 in
14 Michigan employees worked for the "Big Three", and $1 in $6 paid for
labor was paid by the "Big Three". In addition, 11.2% of Michigan
employees are employed by businesses related in some manner to the
automobile industry.
Due to the cyclical nature of the automobile industry, Michigan and
consequently a shareholder of The Michigan Heritage Fund, could be
adversely affected by any economic downturn or recession. Also, any
negative event or news item relating to the automobile industry, may have
an adverse affect on the value of a shareholder's investment in the Fund,
On those occasions when, in the opinion of the Fund's Advisor, market
conditions warrant a temporary defensive approach, the Fund may invest more
than 35 percent of its total assets in short-term obligations, including
the following: securities issued or guaranteed by the U.S. government,
commercial paper, bankers acceptances and money market funds. During
intervals when the Fund has adopted a temporary defensive position it will
not be achieving its stated investment objective.
The Fund may from time to time engage in repurchase agreements which
are secured by U.S. Government obligations that are eligible investments
of the Fund. That is, a seller may sell securities to the Fund and agree
to repurchase the securities at the Fund's cost plus interest within a
specified period (normally one day). The arrangement results in a fixed
rate of return that is not subject to market fluctuations during the period
that the underlying security is held by the Fund. Repurchase agreements
involve certain risks, including seller's default on its obligation to
repurchase or seller's bankruptcy. The Fund will only enter into
repurchase agreements with the Fund's custodian bank and will not enter
into repurchase agreements of more than seven (7) days duration.
HOW TO PURCHASE SHARES
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $1,000 and subsequent minimum investments of $100. Shares of
the Fund are purchased at their net asset value per share next determined
after the order is received and accepted by the Fund's transfer agent.
When opening an account, it is important that you provide the transfer
agent with your correct taxpayer identification number (social security or
employer identification number).
If you are investing in this Fund for the first time, you will need to
set up an account. You may make a direct initial investment by completing
and signing the investment application which accompanies this Prospectus
and mailing it, together with a check or money order made payable to:
The Michigan Heritage Fund
Declaration Service Company
P.O. Box 844,
Conshohocken, Pennsylvania 19428-0844
BY MAIL: When making subsequent investments by mail, enclose your check
with the return remittance portion of the confirmation of your previous
investment or indicate on your check or a separate piece of paper your
name, address and account number and mail to the address set forth above.
Third party checks will not be accepted, and the Fund reserves the right to
refuse to accept second party checks.
BY WIRE: You may make your initial or subsequent investments in the
Fund by wiring funds. To do so, call the Investor Services Department at
1-800-___-____ for wiring instructions.
BY AUTOMATIC INVESTMENT PLAN: Once your account is open, you may make
investments automatically by completing the automatic investment plan form
authorizing the Fund to draw on your bank account regularly by check for as
little as $100 per month beginning within thirty (30) days after the
account is opened. You should inquire at your bank whether it will honor
debits through the Automated Clearing House ("ACH"). You may change the
date or amount of your investment any time by written instruction received
by the Fund at least five business days before the change is to become
effective.
To assure proper receipt, please be sure your bank includes the Fund
name and the account number that has been assigned to you. If you are
opening a new account, please complete the Account Registration Form and
mail it to the "New Account" address above after completing your wire
arrangement. Note: Federal Funds wire purchase orders will be accepted
only when the Fund and Custodian Bank are open for business.
FUNDS CREDITED TO THE FUND'S ACCOUNT BY 4:00 PM (EASTERN TIME) WILL BE
APPLIED TO PURCHASE SHARES ON THAT DAY. There are no wire fees charged by
the Fund for purchases of $1,000 or more. A $10 wire fee will be charged
by the Fund on wire purchases of less than $1,000. Your bank may also
charge wire fees for this service.
ADDITIONAL INFORMATION ABOUT PURCHASES
PURCHASE POLICIES:
o Investments must be received and accepted in the transfer agent's
offices on a business day before 4:00 PM Eastern Time to be
credited to your account that day and to receive that day's share
price. Otherwise, your investment will be credited to your
account on the next business day and you will receive that day's
share price.
o The maximum single investment permitted is $250 thousand. Any
individual order for more than $250 thousand or more must be
pre-approved by the Advisor prior to making the investment or it
will be rejected.
o The Transfer Agent and the Fund are not responsible for any delays
that occur in wiring funds, including delays in processing by the
investor's bank.
o The Fund reserves the right to reject an investment for any
reason.
HOW TO REDEEM SHARES
You may redeem any or all of your shares at will. THE FUND REDEEMS
SHARES AT THE NET ASSET VALUE THEREOF NEXT DETERMINED AFTER IT HAS RECEIVED
AND ACCEPTED A REDEMPTION REQUEST; HOWEVER THE REDEMPTION PROCEEDS WILL NOT
BE PAID UNTIL SUCH TIME AS THE REDEMPTION REQUEST IS RECEIVED IN PROPER
ORDER. Redemption requests must be received prior to the time that the net
asset value per share is next determined (generally 4:00 PM Eastern Time on
each day that the New York Stock Exchange is open for trading )to obtain
the date of receipts net asset value.
BY MAIL: A written request for redemption in proper order must be sent
to Declaration Service Company, P.O. Box 844, Conshohocken, Pennsylvania
19428-0844. For express or registered mail, your request should be
addressed to Declaration Service Company, 555 North Lane, Suite 6160,
Conshohocken, Pennsylvania 19428. "Proper order" requires delivery to the
Transfer Agent of:
(1) a written redemption request signed by each registered owner
in the exact names in which the account is registered, the account
number and the number of shares or the dollar amount to be redeemed;
(2) a signature guarantee when required (see "Signature Guarantee"
page ____);and
(3) such additional documents required to evidence the authority
of the persons requesting redemption on behalf of corporations, or
whether as executors, trustees and other fiduciaries. Redemption
proceeds will not be paid until all documents, in satisfactory form
have been received by the Transfer Agent. (See "Additional Information
About Redemptions" below on page ____.)
BY TELEPHONE: Redemptions may be made by telephone, provided you have
completed the Telephone Redemption Authorization section of the purchase
application. Upon proper authority and instruction, redemption proceeds
will be wired to the bank account set forth on the account registration or,
for amounts $5,000 or less, redemptions will be mailed to the address on
the account registration. There will be a charge for the bank wire.
Neither the Fund nor the Transfer Agent will be responsible for acting upon
instructions reasonably believed by them to be genuine. The Fund and/or
its Transfer Agent will, however, employ reasonable procedures to confirm
that instructions communicated by telephone are genuine (such as requiring
some form of personal identification, providing written confirmations, and
the tape recording of conversations). If the Fund or its Transfer Agent do
not employ reasonable procedures, they may be liable for losses due to
unauthorized or fraudulent transactions.
SPECIAL REDEMPTION ARRANGEMENTS
Special arrangements may be made by institutional investors, or on
behalf of accounts established by brokers, advisors, banks or similar
institutions, to have redemption proceeds transferred by wire to
pre-established accounts upon telephone instructions. For further
information call the Fund at 1-800-___-____.
SIGNATURE GUARANTEE
A signature guarantee is required for all redemptions greater than
$5,000 or where the redemption proceeds are to be paid to another person or
sent to an address other than the one of record. A signature guarantee
verifies the authenticity of your signature. The guarantor must be an
eligible guarantor. In order to be eligible, the guarantor must be a
participant in a STAMP program ( a Securities Transfer Agents Medallion
Program). You may call the Transfer Agent at 1-800-___- ____ to determine
whether the entity that will guarantee the signature is an eligible
guarantor.
REDEMPTION PROCEEDS MAY BE SENT TO YOU:
BY MAIL: If your redemption check is to be mailed, it will usually be
mailed to you within 48 hours of receipt of the redemption request. The
Fund reserves the right to hold redemption proceeds for up to seven days.
If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed to you until the check has cleared. You may
avoid this inconvenience by investing by bank wire. Redemption checks may
also be delayed if you have changed your address within the last 30 days.
Please notify the Fund, promptly, in writing, of any change of address.
BY WIRE: You may authorize the Fund to transmit redemption proceeds by
wire provided you send written instructions with a signature guarantee at
the time of redemption or have completed the banking information portion of
the Telephone Redemption Authorization on the purchase application. Your
redemption proceeds will usually be sent on the first business day
following redemption. However, the Fund reserves the right to hold
redemption proceeds for up to seven days. If the shares to be redeemed
were purchased by check, the redemption proceeds will not be wired until
the check has cleared, which may take up to seven days. There is a $10
charge to cover the wire, which is deducted from redemption proceeds.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS
(1) The share redemption price may be more or less than your cost of
the shares being redeemed, depending on the per share net asset value next
determined after your request is received.
(2) A request to redeem shares in an IRA or similar retirement account
must be accompanied by an IRS W4-P and must state a reason for withdrawal,
as specified by the IRS. Proceeds from the redemption of shares from a
retirement account may be subject to withholding tax.
(3) Excessive purchases and redemptions of Fund shares has an adverse
impact on effective portfolio management as well as upon Fund expenses.
The Fund has reserved the right to refuse investments from shareholders who
engage in such transactions.
ACCOUNT CLOSING FEE
In order to reduce Fund expenses, an account closing fee of $10 will be
assessed against those shareholders who redeem all of the shares in their
Fund account and direct that redemption proceeds be directed to them by
mail or wire. This charge is payable directly to the Fund's Transfer Agent
which, in turn, will reduce its charges to the Fund by an equal amount.
The purpose of the charge is to allocate to redeeming shareholders a
more equitable portion of the Transfer Agent's fee, including the cost of
tax reporting, which is based upon the number of shareholder accounts.
When a shareholder closes an account, the Fund must continue to carry the
account on its books, maintain the account records and complete year-end
tax reporting. With no assets, the account cannot pay its own expenses and
imposes an unfair burden on remaining shareholders.
SMALL ACCOUNTS
Fund accounts which fall, for any reason other than market fluctuation,
below $500 at any time during a month will be subject to a small account
charge of $5 for that month, which is deducted the first business day
following the end of each month. The charge is payable directly to the
Fund's Transfer Agent which, in turn, will reduce its charges to the Fund
by an equal amount. The purpose of the charge is to allocate the cost of
maintaining shareholder accounts more equitably among shareholders.
Active automatic investment plan, UGMA/UTMA, and retirement plan
accounts will not be subject to the small account charge.
In order to reduce expenses, the Fund may redeem all of the shares in
any shareholder account (other than an active automatic investment plan,
UGMA/UTMA and retirement plan accounts), if, for a period of more than
three months, the account has a net value of $500 or less and the reduction
in its value is not due to market action. If the Fund elects to close such
accounts, it will notify shareholders whose accounts are below the minimum
of its intention to do so, and will provide those shareholders with an
opportunity to increase the value of their accounts by investing a
sufficient amount to bring the value of their accounts up to an amount
greater than $500 within ninety (90) days of the date of the notice. No
account closing fee will be charged to those investors whose accounts are
closed under the mandatory redemption provision.
SHAREHOLDER SERVICES
Declaration Service Company, P.O. Box 844, Conshohocken, PA
19428-0844, acts as transfer, shareholder servicing, and dividend paying
agent for all Fund accounts. Simply write or call the Investor Information
Department at 1-800-___-____ for prompt service on any questions about your
account.
CONFIRMATION STATEMENTS
Shareholders normally will receive a confirmation statement after each
transaction showing the activity in the account, and an annual statement
showing all transactions for the calendar year just completed.
OTHER SERVICES
The Fund has available a number of plans and services to meet the
special needs of certain investors. Plans available include, but are not
limited to:
(1) payroll deduction plans, including military allotments;
(2) custodial accounts for minors;
(3) a flexible, systematic withdrawal plan; and
(4) various retirement plans such as IRA, 403(b)(7), and
employer-adopted, 401(k) defined benefit and defined contribution
plans.
There is an annual charge for each retirement plan fund account with
respect to which a service provider acts as custodian. If this charge is
not paid separately prior to the last business day of a calendar year or
prior to a total redemption, it will be deducted from the shareholder's
account.
Application forms and brochures describing these plans and services can
be obtained from the Transfer Agent by calling 1-800-___-____.
RULE 12b-1 DISTRIBUTION PLAN
A plan of distribution has been adopted under Rule 12b-1 of the
Investment Company Act of 1940 for the Fund. The plan provides the Fund
may pay an annual fee of up to 0.25% of the Fund's average net assets (1/12
of 0.25% monthly) for certain services which are primarily intended to
result in the distribution of Fund shares. Such services include
advertising, compensation of persons engaged in the sale of Fund shares,
distribution of sales materials including the cost of preparing, printing
and mailing such sales materials, sales representations and promotions and
payments to brokers and others who are engaged in the distribution of Fund
shares and who administer the accounts of shareholders. See "12b-1 Plan of
Distribution" in Statement of Additional Information.
VALUING FUND SHARES
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including
estimated accrued expenses), by the number of shares outstanding, rounded
to the nearest cent. Net asset value per share is determined as of the
close of the New York Stock Exchange (4:00 PM, Eastern Time) on each day
that the Exchange is open for business, and on any other day on which there
is sufficient trading in the Fund's securities to materially affect the net
asset value. The net asset value per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ over-the
counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at
their last bid price. When market quotations are not readily available,
when the Advisor determines the last bid price does not accurately reflect
the current value or when restricted securities are being valued, such
securities are valued as determined in good faith by the Advisor, subject
to review of the Board of Trustees of the Trust.
DISTRIBUTION AND TAXES
As a shareholder you are entitled to your share of the Fund's
distributed net income and any gains realized on its investments. The Fund
intends to distribute dividends and capital gains distributions to qualify
as a regulated investment company and to avoid paying corporate income and
excise taxes. Dividend and capital gains distributions will have tax
consequences you should know about.
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS
The Fund's net investment income from DIVIDENDS and interest is
distributed to you at the end of the calendar year as DIVIDENDS.
Short-term capital gains are distributed at the end of the calendar year
and are included in net investment income. The Fund realizes long-term
capital gains whenever it sells securities held for more than one year for
a higher price than it paid for them.
Net realized long-term capital gains, if any, are distributed at the
end of the calendar year as CAPITAL GAIN DISTRIBUTIONS. Before they are
distributed, net long-term capital gains are included in the value of each
share. After they are distributed, the value of each share drops by the
per-share amount of the distribution (If your distributions are reinvested,
the total value of your holdings will not change).
REINVESTMENTS
Dividends and capital gain distributions are automatically reinvested
in additional shares of the Fund, unless you request the Fund in writing or
by phone to pay dividends and distributions to you in cash.
The reinvestment price is the net asset value at the close of business
on the day the distribution is paid. Your statement will confirm the
amount invested and the number of shares purchased.
If you choose cash dividends and distributions, you will receive only
those declared after your request has been processed.
TAXES
Distributions are subject to federal income tax and also may be subject
to state and local taxes. Distributions are taxable in the year the Fund
pays them regardless of whether you receive them in cash they are
reinvested in additional shares.
Each January, you will receive a tax statement showing the kind and
total amount of all distributions you received during the previous year.
You must report distributions on your tax returns, even if they are
reinvested in additional shares.
"Buying a dividend" creates a tax liability. "Buying a dividend" means
buying shares shortly before a net investment income or a capital gain
distribution is declared is declared and paid on Fund shares. The amount
of the distribution that you receive is fully taxable to you even though
such distribution is only a return of capital.
Redemptions may be subject you to tax. If the redemption value of your
Fund shares is greater than their cost, the difference is a capital gain.
Your gain may be either short-term (for shares held for one year or less)
or long term (for shares held for more than one year).
IMPORTANT: The foregoing tax information is a brief and selective
summary of certain federal tax rules that apply to the Fund. Tax matters
are highly individual and complex, and you should consult a qualified tax
advisor about your personal situation.
MANAGEMENT OF THE FUND
TRUSTEES
The Fund is a series of the Declaration Fund (the "Trust"), an
open-end, diversified, management investment company organized as a
Pennsylvania business trust. The Trust's headquarters are at P.O. Box
844, Conshohocken, Pennsylvania 17428-0844. The business and affairs of
the Trust and of the separate series (including The Michigan Heritage Fund)
within the Trust are managed by the Trust's Board of Trustees. The
Trustees establish trust policies, and have certain fiduciary duties and
obligations to the Trust and the separate series and their shareholders
under the laws of the State of Pennsylvania and the applicable federal
securities laws. Currently, the Trust is offering shares in two series:
Declaration Cash Account and The Michigan Heritage Fund.
THE INVESTMENT ADVISOR
Dickinson Asset Management, Inc. (the "Advisor"), 301 MAC Avenue,
Suite 120, East Lansing, Michigan 48823, under an investment advisory
agreement with the Trust, furnishes investment advisory and management
services to the Fund. The Advisor is a Michigan corporation and has been
registered as an investment advisor with the SEC and the State of Michigan
since September 1996. Prior to this date, this Firm was a sole
proprietorship duly registered with the SEC and the State of Michigan in
April 1995.
Mr. C. David Dickinson, the Fund's portfolio manager, is the principal
owner of and controls the Advisor and is responsible for the day-to-day
investment management of the Fund. Mr. Dickinson has in excess of thirteen
years of experience in the financial services industry, including eight
years as a Registered Representative in the brokerage business, and two
years as Principal of a Registered Investment Advisory Firm. Shareholders
should understand that while Mr. Dickinson has extensive experience
advising clients as to their investment strategies and managing portfolios
of common stock, the Fund has no operating history and managing a mutual
fund portfolio is a new position for Mr. Dickinson. Dickinson Asset
Management, Inc. has been Investment Advisor to the Fund since inception.
The Advisor furnishes an investment program for the Fund, determines,
subject to the overall supervision and review of the Board of Trustees of
the Trust, what investments should be purchased, sold and held, and makes
changes on behalf of the Trust in the investments of the Fund. The
Advisory Agreement with the Trust provides for the Fund to pay the Advisor
a monthly management fee equal to an annual rate of 1.00% of the Fund's
average daily net assets.
THE ADMINISTRATOR
Declaration Service Company, P.O. Box 844, Conshohocken, PA 19428-0844
("DSC") serves as the Fund's Administrator in addition to serving as the
Fund's transfer agent, shareholder servicing agent, and dividend disbursing
agent.
DSC is responsible for determining the daily net asset value per share
and maintaining the general accounting records of the Fund.
THE DISTRIBUTOR
Declaration Distributors, Inc., P.O. Box 844, Conshohocken, PA
19428-0844 ("DDI" or "Distributor"), an affiliate of DSC, is the Fund's
share distributor. DDI acts as sales agent in states where designated
agents are required. DDI reviews and files all advertising and promotional
materials, and monitors and reports to the Board of Trustees on Fund
distribution plans.
The Administration, Transfer Agent and Shareholder Services, Accounting
Services, and the Distribution agreements provide for the Fund to pay DSC
and DDI an annual fee, payable monthly, for these services.
GENERAL INFORMATION
SHAREHOLDER RIGHTS
The shares making up the Fund represent an interest in the Fund's
assets only and in the event of liquidation, each share of the Fund would
have the same rights to the distribution of assets as every other share of
the Fund.
No annual or regular meeting of shareholders is required; however, the
Trustees may call meetings to take action on matters which require
shareholder vote and other matters as to which Trustees determine
shareholder a vote is necessary or desirable. Subject to Section 16(a) of
the Investment Company Act of 1940, the Trustees may elect their own
successors and may appoint Trustees to fill vacancies, including vacancies
caused by an increase in the number of trustees by action of the Board of
Trustees.
As a shareholder, you have voting rights with respect to the management
and operation of the Fund and its policies. You are entitled to one vote
for each whole share, and fractional votes for fractional shares, held.
Shares of the Fund do not have cumulative voting rights. The Fund's shares
are fully paid and non-assessable, have no pre-emptive or subscription
rights, and are fully transferable, with no conversion rights.
Prior to the public offering made by this Prospectus, Dickinson Asset
Management, Inc. owned (having purchased for investment) all of the
outstanding shares of the Fund and as a result may be said to then control
the Fund.
PERFORMANCE INFORMATION
From time to time, in advertisements or in reports to shareholders or
prospective shareholders, the Fund may compare its performance, in terms of
its total return, to that of other mutual funds with similar investment
objectives and to stock or other indices. For example, the Fund may
compare its performance to rankings prepared by Lipper Analytical Services,
Inc. ("Lipper"), a widely recognized independent service which monitors
the performance of mutual funds, to Morningstar's Mutual Fund Values, or to
the Consumer Price Index. Performance information and rankings as reported
in Changing Times, Business Week, Institutional Investor, the Wall Street
Journal, Mutual Fund Forecaster, No-Load Investor, Money, Forbes, Fortune
and Barrons may also be used in comparing performance of the Fund.
Performance comparisons shall not be considered as representative of the
future performance of the Fund.
The Fund's average annual total return is computed by determining the
average annual compounded rate of return for a specified period that, if
applied to a hypothetical $1,000 initial investment, would produce the
redeemable value of that investment at the end of the period, assuming
reinvestment of all dividends and distributions and with recognition of all
recurring charges. The Fund may also utilize a total return for differing
periods computed in the same manner but without annualizing the total
return.
The standard total return results may not take into account recurring
and non-recurring charges for optional services which only certain
shareholders elect and which involve nominal fees such as a fee for small
balances and redemptions. These fees have the effect of reducing the
actual return realized by shareholders.
MICHIGAN HERITAGE FUND
INVESTMENT ADVISOR
Dickinson Asset Management, Inc.
301 MAC Avenue, Suite 120
East Lansing, Michigan 48823
ADMINISTRATOR & TRANSFER AGENT
Declaration Service Company
P.O. Box 844
Conshohocken, PA 19428
DISTRIBUTOR
Declaration Distributors, Inc.
P.O. Box 844
Conshohocken, PA 19428
CUSTODIAN BANK
_______________
_______________
_______________
INDEPENDENT ACCOUNTANTS
Sanville & Company
1514 Old York Road
Abington, PA 19001
Be sure to retain this prospectus. It contains valuable information.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or the Fund's Statement
of Additional Information incorporated herein by reference, in connection
with the offering made by this Prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Fund. This Prospectus does not constitute an offering by
the Fund in any jurisdiction in which such offering may not lawfully be
made.
<PAGE>
PART B: STATEMENT OF ADDITIONAL INFORMATION
THE MICHIGAN HERITAGE FUND
A SERIES OF THE DECLARATION FUND
THE MICHIGAN HERITAGE FUND
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus but should
be read in conjunction with the Fund's Prospectus dated ______, 1997 (the
"Prospectus") which may be obtained from Declaration Service Company ("DSC"
or the "Administrator"), P.O. Box 844, Conshohocken, Pennsylvania
19428-0844.
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS
_______, 1997
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
GENERAL INFORMATION .................................... 3
INVESTMENT OBJECTIVES AND POLICIES ..................... 3
INVESTMENT LIMITATIONS ................................. 3
PORTFOLIO TRANSACTIONS ................................. 5
MANAGEMENT OF THE FUND ................................. 6
INVESTMENT ADVISORY SERVICES ........................... 7
ADMINISTRATOR SERVICES ................................. 8
TRANSFER AGENCY AND OTHER SERVICES ..................... 9
RULE 12b-1 DISTRIBUTION PLAN .......................... 9
ADDITIONAL INFORMATION ON REDEMPTIONS .................. 10
CALCULATION OF PERFORMANCE DATA ........................ 10
TAX STATUS ............................................. 11
CUSTODIAN .............................................. 12
INDEPENDENT ACCOUNTANTS ................................ 12
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GENERAL INFORMATION
The Michigan Heritage Fund ("the Fund") was organized as a series of
Declaration Trust (the "Trust") on February 10, 1997. Declaration Trust is
an open-end, diversified, management investment company, organized as a
Pennsylvania Business Trust.
Under the Trust Agreement, no annual or regular meeting of shareholders
is required; however, the Trustees may call meetings to take action on
matters which require a shareholder vote and on other matters when the
Trustees determine a shareholder vote is desirable. Shareholder meetings
will be held when required by the Investment Company Act of 1940, as
amended, (the "1940 Act").
On any matter submitted to shareholders, the holder of each share is
entitled to one vote per share (with proportionate voting for fractional
shares). Shares do not have cumulative voting rights, which means that in
situations in which shareholders elect Trustees, holders of more than 50%
of the shares voting for the election of Trustees can elect 100% of the
Trust's Trustees, and the holders of less than 50% of the shares voting for
the election of Trustees will not be able to elect any person as a Trustee.
Fund shares have no preemptive or subscription rights and are fully
transferable. There are no conversion rights.
INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of the investment
objectives and policies of the Fund in the Fund's Prospectus.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote
of a majority of the outstanding shares of the Fund. As used in the
Prospectus and this Statement of Additional Information, the term
"majority" of the outstanding shares of the Fund means the lesser of (1)
67% or more of the outstanding shares of the Fund present at a meeting, if
the holders of more than 50% of the outstanding shares of the Fund are
present or represented at such meeting; or (2) more than 50% of the
outstanding shares of the Fund. Other investment practices which may be
changed by the Board of Trustees without the approval of shareholders to
the extent permitted by applicable law, regulation or regulatory policy are
considered non-fundamental ("Non-Fundamental").
3
<PAGE>
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset
coverage of 300% for all borrowings of the Fund; or (b) from a bank or
other persons for temporary purposes only, provided that such temporary
borrowings are in an amount not exceeding 5% of the Fund's total assets at
the time when the borrowing is made. This limitation does not preclude the
Fund from entering into reverse repurchase transactions, provided that the
Fund has an asset coverage of 300% for all borrowings and repurchase
commitments of the Fund pursuant to reverse repurchase transactions.
2. Senior Securities. Senior securities will not be issued with
respect to the Fund. This limitation is not applicable to activities that
may be deemed to involve the issuance or sale of a senior security by the
Fund, provided that the Fund's engagement in such activities is (a)
consistent with or permitted by the 1940 Act as amended, the rules and
regulations promulgated thereunder or interpretations of the Securities and
Exchange Commission ("SEC") or its staff and (b) as described in the
Prospectus and this Statement of Additional Information.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent
that, in connection with the disposition of portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under certain
federal securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which
are secured by or represent interests in real estate. This limitation does
not preclude the Fund from investing in mortgage-related securities or
investing in companies engaged in the real estate business or that have a
significant portion of their assets in real estate (including real estate
investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed
by commodities or from investing in companies which are engaged in a
commodities business or have a significant portion of their assets in
commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or
(c) by purchasing non publicly offered debt securities. For purposes of
this limitation, the term "loans" shall not include the purchase of a
portion of an issue of publicly distributed bonds, debentures or other
securities.
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With respect to the percentages adopted by the Fund as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless
the excess results immediately and directly from the acquisition of any
security or the action taken. This paragraph does not apply to the
borrowing policy set forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a
personal holding company, may be merged or consolidated with or acquired by
the Fund, provided that if such merger, consolidation or acquisition
results in an investment in the securities of any issuer prohibited by said
paragraphs, the Trust shall, within ninety days after the consummation of
such merger, consolidation or acquisition, dispose of all of the securities
of such issuer so acquired or such portion thereof as shall bring the total
investment therein within the limitations imposed by said paragraphs above
as of the date of consummation.
Non-Fundamental. The following limitations have been adopted by the
Fund with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund
except as may be necessary in connection with borrowings described in
limitation (1) above. Margin deposits, security interests, liens and
collateral arrangements with respect to transactions involving options,
futures contracts, short sales and other permitted investments and
techniques are not deemed to be a mortgage, pledge or hypothecation of
assets for purposes of this limitation.
2. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its
total assets are outstanding.
3. Short Sales. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
4. Options. The Fund will not purchase or sell puts, calls, options,
straddles or futures contracts.
5. Illiquid Investments. The Fund will not invest in securities for
which there are legal or contractual restrictions on resale or other
illiquid securities.
PORTFOLIO TRANSACTIONS
Subject to such policies as may be established, from time to time, by
the Board of Trustees of the Trust, the Advisor is responsible for
portfolio decisions concerning the Fund and placing the Fund's portfolio
transactions. In placing portfolio transactions, the Advisor seeks the
best qualitative execution for the Fund, taking into account such factors
as price (including the applicable brokerage commission or dealer spread),
the execution capability, financial responsibility and responsiveness of
the broker or dealer and the brokerage and research services provided by
the broker or dealer. The Advisor generally seeks favorable prices and
commission rates that are reasonable in relation to the benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services respecting the Fund and/or the
other accounts over which the Advisor exercises investment discretion and
to pay such brokers or dealers a commission in excess of the commission
another broker or dealer would charge if the Advisor determines, in good
faith, that the commission is reasonable in relation to the value of the
brokerage and research services provided. The determination may be viewed
in terms of a particular transaction or the Advisor's overall
responsibilities with respect to the Fund and to other accounts over which
it exercises investment discretion.
5
<PAGE>
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and
analyses of reports concerning performance of accounts. The research
services and other information furnished by effecting securities
transactions on behalf of the Fund may also be used by the Advisor in
servicing all of its accounts. Similarly, research and information
provided by brokers or dealers serving other clients may be useful to the
Advisor in connection with its services to the Fund. Although research
services and other information are useful to the Fund and the Advisor, it
is not possible to place a dollar value on the research and other
information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information
will not reduce the overall cost to the Advisor of performing its duties to
the Fund under the Agreement.
While it is not practicable and in the best interests of the Fund to
solicit competitive bids for commission rates on each portfolio
transaction, consideration is regularly given to posted commission rates as
well as other information concerning the level of commissions charged on
comparable transactions by qualified brokers.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better
price, including commissions and executions, is available. Fixed income
securities are normally purchased directly from the issuer, an underwriter
or a market maker. Purchases include a concession paid by the issuer to
the underwriter and the purchase price paid to a market maker may include
the spread between the bid and asked prices.
To the extent that the same security is sought on behalf of the Fund
and another of the Advisor's clients at about the same time, a securities
position as large as is desired may not be available and the Fund may have
to pay a higher price for the security. Similarly, the Advisor on behalf
of the Fund may not be able to obtain as large an execution of an order to
sell or as high a price for any particular portfolio security if the other
client desires to sell the same portfolio security at the same time. On
the other hand, if the same securities are bought or sold at the same time
by more than one client, the resulting participation in volume transactions
could produce better executions on behalf of the Fund. In the event that
more than one client wants to purchase or sell the same security on a given
date, the purchases and sales will normally be made by random client
selection.
MANAGEMENT OF THE FUND
The Trustees and Officers of the Trust, and their principal occupations
are set forth below.
Authur S. Filean
Age 57
Trustee
Mr. Filean is a Trustee of Declaration Trust. Mr. Filean has served as
a Trustee of Declaration Fund during the period from December 8, 1988 to
the present. From 1983 to 1990, Mr. Filean served as a Second Vice
President of Principal Mutual Life Insurance Company. From 1976 to the
present, he has served as Secretary of the mutual funds making up the
Princor Mutual Fund Group: he is currently Vice President and Secretary of
each of the Princor Funds. From 1981-1986 he served as President,
Treasurer and Director of Princor Financial Services Corporation (a
principal underwriter and dealer for mutual funds).
6
<PAGE>
William F. Lee, Jr.
Age 57
Trustee
Mr. Lee is a Trustee of Declaration Trust. Mr. Lee has served as a
Trustee of Declaration Fund during the period from December 8, 1988 to the
present. Since 1960, Mr. Lee has owned and is principal of his own
insurance and employee benefit firm - William F. Lee, Jr. CLU Chartered
Financial Consultant. He is a member and past president of both the
Philadelphia Estate Planning Council, and the Philadelphia Association of
Advanced Life Underwriting. He is past president of the Swarthmore College
Alumni Association and is currently a member of the Board of Managers of
Swarthmore College. Age 57.
Stephen B. Tily, III*
Age 58
Chairman of the Board, President and Trustee
Mr. Tily is a Trustee of Declaration Fund. Mr. Tily has served as a
Trustee of Declaration Trust during the period from September, 1988 to the
present. He has served as President of Declaration Fund since December,
1988. From 1983 to December, 1988 he served as Vice President of
Declaration Trust: as Chairman of the Board of Directors and Secretary of
Declaration Investment Advisors, Inc., (the investment manager of
Declaration Cash Account, a series of Declaration Trust) and s Chairman of
the Board of Declaration Holdings, Inc. (the then parent company of
Declaration Investment Advisors, Inc.). From 1981 to January 1, 1992, Mr.
Tily served as President, Chief Executive Officer and a Director of
Delaware Charter Guarantee & Trust Company. He became Chairman and Chief
Executive officer of Delaware Charter Guarantee & Trust Company on January
1, 1992. From 1977 to 1981 he served as Chief Operating Officer and a
Director of that Company. Effective December 31, 1993, Mr. Tily terminated
his relationship with Delaware Charter Guarantee and Trust Company. Age 58.
Thomas S. Stewart, II
Age 57
Trustee
Mr. Stewart became a Trustee of Declaration Trust in 1994. Prior to
his retirement, Mr. Steward acted as Chairman of Provident Capital
Management Inc. and Advanced Investment Management, Inc. (investment
management firms) during the period from 1986 until 1994. During the
period, 1986-1989, Mr. Stewart served as Executive Vice President of
Provident National Bank, Philadelphia, Pennsylvania and as Manager of the
Bank's Trust Division. He was formerly Chairman of both the Executive
Committee and the Asset Management Committee of the Trust and Investment
Management Division of the American Bankers Association, President of the
Corporate Fiduciaries Association of Philadelphia, and a Director of
Philadelphia Financial Analysts, Inc. Age 57.
Terence P. Smith
Age 50
Secretary
From September, 1988 to the present, Mr. Smith has served as President,
and Chief Operating Officer of the companies of the Declaration Group. He
is also a Director of Declaration Distributors, Inc., a registered
broker/dealer. From September, 1987 to September, 1988 he served as Vice
President-Operations of Declaration Holdings, Inc. (the then parent
company of Declaration Fund). From 1984 to 1987 Mr. Smith was Executive
Vice President of Review Management Corp. (investment manager for the
former Over-The-Counter Securities Group, Inc. and the distributor of its
shares.) From 1981 to 1984 he served on the tax and audit staff of the
Philadelphia office of Peat Marwick Main & Co. (international accounting
firm). Mr. Smith is a certified public accountant.
*This Trustee may be deemed an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
INVESTMENT ADVISORY SERVICES
Dickinson Asset Management, Inc. an investment management firm (the
"Advisor"), pursuant to an Advisory Agreement, provides investment advisory
and management services to the Fund. It will compensate any trustees and
officers of the Trust who are also employees, officers and directors of the
Advisor or its affiliates.
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<PAGE>
The Advisory Agreement was approved by the Board of Trustees of the
Trust (including by a majority of the (non-interested Trustees). The terms
of the votes approving the Advisory Agreement provide that it will continue
until February 19, 1997 and, from year to year thereafter, as long as it is
approved at least annually either (i) by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by the Board of Trustees of the Trust, including by a vote of a majority of
the Trustees who are not parties to the Advisory Agreement or interested
persons of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement may be
terminated on 60 days' written notice by either party and will terminate
automatically if it is assigned. The Advisory Agreement was approved with
respect to the Fund on February 19, 1997.
C. David Dickinson is the President, Secretary/Treasurer and sole
Director of Dickinson Asset Management, Inc. He owns more than a majority
of the Company's outstanding voting securities. The only person owing more
than 5% of the Company's outstanding voting securities is Lee J. Hammond,
who owns 6%.
The Advisor may also act as an investment advisor or administrator to
other persons, entities and corporations, including other investment
companies.
For more information, see "Management of the Fund" in the Prospectus.
ADMINISTRATOR SERVICES
Declaration Service Company ("DSC" or "Administrator") provides
day-to-day administrative services to the Fund. As described in the Fund's
Prospectus, the Administrator will provide the Fund with office space,
facilities and simple business equipment, and will generally administer the
Fund's business affairs and provide the services of executive and clerical
personnel for administering the affairs of the Fund. It will compensate
any Trustees and officers of the Trust who are also employees, officers and
directors of the Administrator or its affiliates.
The Board of Trustees of the Trust (including a majority of the
non-interested Trustees) approved the Administration Agreement, dated
February 19, 1997, with DSC. The terms of the Administration Agreement
provide that it will continue initially for two years, and from year to
year thereafter as long as it is approved at least annually by a vote of a
majority of the Board of Trustees of the Trust. The Administration
Agreement may be terminated on 90 days' written notice by either party
prior to commencement of a renewal date and will terminate automatically if
it is assigned.
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<PAGE>
For more information, see "Management of the Fund" in the Prospectus.
The Trust pays out of the assets of the Fund all other expenses for the
Fund's operations and activities. The expenses borne by the Fund include
the charges and expenses of any transfer agents and dividend disbursing
agents, custodian fees, legal and auditors' expenses, bookkeeping and
accounting expenses, brokerage commissions for portfolio transactions,
taxes, if any, the administrative fee, extraordinary expenses, expenses of
issuing and redeeming shares, expenses of shareholder and trustee meetings,
expenses for preparing, printing and mailing proxy statements, reports and
other communications to shareholders, expenses of registering and
qualifying shares for sale, typesetting of prospectuses and periodic
reports and expenses of mailing them to current shareholders, fidelity bond
premiums, cost of maintaining the books and records of the Fund, and any
other charges and fees not specifically enumerated.
TRANSFER AGENCY AND OTHER SERVICES
In addition to the services performed for the Fund under the
Administration Agreement, DSC provides transfer agent and dividend
disbursement agent services pursuant to the Transfer Agency and Shareholder
Services Agreement, as described in the Fund's Prospectus under Management
of the Fund. In addition, bookkeeping and accounting services are also
provided. The Board of Trustees approved the Transfer Agency and
Accounting Services Agreement, effective February 19, 1997, with the same
duration and termination provisions as the Administration Agreement.
RULE 12b-1 DISTRIBUTION PLAN
As described under "12b-1 Fee" in the Fund's Prospectus, on February
19, 1997 the Trustees approved The Distribution Plan adopted pursuant to
Rule 12b-1 under the 1940 Act (the "Distribution Plan"). The Distribution
Plan allows the Fund to pay for or reimburse expenditures in connection
with sales and promotional services related to the distribution of Fund
shares, including personal services provided to prospective and existing
Fund shareholders, which includes the cost of printing and distribution of
prospectus and promotional materials; making slides and charts for
presentations; assisting shareholders and prospective investors in
understanding and dealing with the Fund; and travel and out-of-pocket
expenses (e.g., copy and long distance telephone charges) related thereto.
Expenses which the Fund incurs pursuant to the Distribution Plan are
reviewed quarterly by the Board of Trustees. On an annual basis the
Distribution Plan is reviewed by the Board of Trustees as a whole, and the
Trustees who are not interested persons as that term is defined in the 1940
Act, and who have no direct or indirect financial interest in the operation
of the Distribution Plan ("Qualified Trustees"). In their review of the
Distribution Plan, the Board of Trustees, as a whole, and the Qualified
Trustees determine whether, in their reasonable business judgment and in
light of their fiduciary duties under state law and under Section 36(a) and
(b) of the 1940 Act, there is a reasonable likelihood that the Distribution
Plan will benefit the Fund and its shareholders. The Distribution Plan may
be terminated at any time by vote of a majority of the Qualified Trustees,
or by vote of a majority of the outstanding shares of the Fund.
February 19, 1997, in light of and subject to the Distribution Plan,
the Fund entered into a Distribution Agreement with Declaration
Distributors, Inc. ("DDI"), an affiliate of DSC as described in the Fund's
Prospectus under Management of the Fund. The terms of the Distribution
Agreement provide that it will continue for an initial period of two years
and from year to year thereafter as long as it is approved at least
annually both (i) by a vote of a majority of the Board of Trustees of the
Trust, and including a majority of the Trustees who are not parties to the
Distribution Agreement or interested persons of any party thereto, cast in
person at a meeting called for the purpose of voting on such approval. The
Distribution Agreement may be terminated on 60 days' written notice by
either party and will terminate automatically if it is assigned.
9
<PAGE>
ADDITIONAL INFORMATION ON REDEMPTIONS
SUSPENSION OF REDEMPTION PRIVILEGES
The Fund may suspend redemption privileges or postpone the date of
payment upon redemption for up to seven days, except during any period (1)
when the New York Stock Exchange is closed, other than for customary
weekend and holiday closing, or trading on the Exchange is restricted as
determined by the Securities and Exchange Commission ("SEC"), (2) when an
emergency exists, as defined by the SEC, which makes it not reasonably
practicable to dispose of the Fund's securities it or not reasonably
practicable to fairly determine the value of the Fund's assets, or (3) as
the SEC may otherwise permit.
CALCULATION OF PERFORMANCE DATA
TOTAL RETURN
The Fund may advertise performance in terms of average annual total
return for 1, 5 and 10 year periods, or for such lesser periods as the Fund
has been in existence. Average annual total return is computed by finding
the average annual compounded rates of return over the periods that would
equate the initial amount invested to the ending redeemable value according
to the following formula:
P(1 + T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (exponential number)
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10 year
periods at the end of the year or period;
The calculation assumes all charges are deducted from the initial
$1,000 payment and assumes all dividends and distributions by the Fund are
reinvested at the price stated in the Prospectus on the reinvestment dates
during the period, and includes all recurring fees that are charged to all
shareholder accounts.
NONSTANDARDIZED TOTAL RETURN
The Fund may provide the above described standard total return results
for a period which ends as of not earlier than the most recent calendar
quarter end and which begins either twelve months before or at the time of
commencement of the Fund's operations. In addition, nonstandardized total
return results may be provided with respect to the Fund for differing
periods, such as for the most recent six month period. Such
nonstandardized total return is computed as otherwise described under
"Total Return" except that no annualization is made.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses
of the Fund. These factors and possible differences in the methods and
time periods used in calculating non-standardized investment performance
should be considered when comparing the Fund's performance to those of
other investment companies or investment vehicles. The risks associated
with the Fund's investment objective, policies and techniques should also
be considered. At any time in the future, investment performance may be
higher or lower than past performance, and there can be no assurance that
any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the
Fund may be compared to mutual funds with similar investment objectives.
10
<PAGE>
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets.
For more information, see "Performance Information" in the prospectus.
TAX STATUS
TAXATION OF THE FUND
As stated in its Prospectus, it is the intention to qualify the Fund as
a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). Accordingly, the Fund will not be
liable for federal income taxes on its taxable net investment income and
capital gain net income that are distributed to shareholders, provided that
at least 90% of the Fund's net investment income and net short-term capital
gain for the taxable year is distributed.
To qualify as a regulated investment company, the Fund must, among
other things, (a) derive in each taxable year at least 90% of its gross
income from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stock, securities or foreign
currencies, or other income derived with respect to its business of
investing in such stock, securities or currencies (the "90% test"); (b)
derive in each taxable year less than 30% of its gross income from the sale
or other disposition of stock or securities held less than three months
(the "30% test"), and (c) satisfy certain diversification requirements at
the close of each quarter of the Fund's taxable year. It is anticipated
that the Advisor may be required to adjust the composition of the Fund's
portfolio at the end of each quarter in order to qualify as a regulated
investment company.
The Code imposes a non-deductible 4% excise tax on a regulated
investment company that fails to distribute during each calendar year an
amount equal to the sum of (1) at least 98% of its ordinary income for the
calendar year, (2) at least 98% of its net capital gains for the
twelve-month period ending on October 31 of the calendar year and (3) any
portion (not taxable to the Fund) of the respective balance from the
preceding calendar year. The Fund intends to make such distributions as
are necessary to avoid imposition of this excise tax.
TAXATION OF THE SHAREHOLDER
Taxable distributions generally are included in a shareholder's gross
income for the tax year in which they are received. However, dividends
declared in October, November or December of a particular year and made
payable to shareholders of record in such a month will be deemed to have
been received on December 31, if dividend is paid during the following
January. To the extent net investment income of the Fund arises from
dividends on domestic common or preferred stock, some of the Fund's
distributions may qualify for the 70% corporate dividends-received
deduction. All Shareholders will be notified annually regarding the tax
status of distributions received from the Fund.
Distributions by the Fund will result in a reduction in the fair market
value of the Fund's shares. Should a distribution reduce the fair market
value below a shareholder's cost basis, such distribution nevertheless
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a
partial return of capital. In particular, investors should be careful to
consider the tax implications of buying shares of the Fund just prior to a
distribution. The price of such shares purchased at that time includes the
amount of any forthcoming distribution. Those investors purchasing the
Fund's shares just prior to a distribution may receive a return of
investment upon distribution which will nevertheless be taxable to them.
11
<PAGE>
A shareholder of the Fund should be aware that a redemption of shares
is a taxable event and, accordingly, a capital gain or loss may be
recognized. If a shareholder of the Fund receives a distribution taxable
as long-term capital gain with respect to shares of the Fund and redeems or
exchanges shares before he has held them for more than six months, any loss
on the redemption or exchange (not otherwise disallowed as attributable to
an exempt-interest dividend) will be treated as long-term capital loss to
the extent of the long term capital gain recognized.
OTHER TAX CONSIDERATIONS
Distributions to shareholders may be subject to additional state, local
and non-U.S. taxes, depending on each shareholder's particular tax
situation. Shareholders subject to tax in certain states may be exempt
from state income tax on Fund distributions to the extent such
distributions are derived from interest on direct obligations of the United
States Government. Shareholders are advised to consult their own tax
advisers with respect to the particular tax consequences to them of an
investment in shares of the Fund.
CUSTODIAN
_______________________________________________, is Custodian of the
Fund's investments. The Custodian acts as the depository of the Fund's
assets, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
INDEPENDENT ACCOUNTANTS
Sanville & Company, 1514 Old York Road, Abington, PA 19001, has been
selected as independent accountants for the Fund for the fiscal year ending
December 31, 1997. Sanville & Company performs an annual audit of the
Fund's financial statements and provides financial, tax and accounting
consulting services as requested.
12
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements in Prospectus of Declaration Fund/
The Michigan Heritage Fund
None
(b) Financial Statements in Statement of Additional Information
which relate to Declaration Fund/The Michigan Heritage Fund
None
(c) Exhibits: Exhibit No.:
(1) Copies of the Charter as now in effect;
Copy of Declaration of Trust, as amended 1(H)
(2) Copies of the existing bylaws or instruments
corresponding thereto:
Copy of Bylaws, as amended. 2(H)
(3) Copies of any voting trust agreement with none
respect to more than 5 percent of any class
of equity securities of the Registrant.
(4) Specimen of copy of each security issued by
the Registrant, including copies of all constituent
instruments, defining the rights of the holders
of such securities and copies of each security
being registered;
Copy of Share Certificate 4(A)
(5) Copies of all investment advisory contracts
relating to the management of the Assets of the
Registrant;
Copy of Investment Management Agreement 5(H)
between the Registrant and Declaration Investment
Advisors, Inc. dated December 8, 1988
Copy of Advisory Agreement between the Registrant 5(b)
with respect to The Michigan Heritage Fund and
Dickinson Asset Management, Inc. dated
February 19, 1997.
(6) Copies of each underwriting or distribution contract 6(a)
between the Registrant and a principal underwriter,
and specimens of copies of all agreements between
principal underwriters and dealers.
(7) Copies of all bonus, profit sharing, pension or other none
similar arrangements wholly or partly for the benefit
of directors or officers of the Registrant in their
capacity as such; any such plan that is not set forth in
a formal document, furnish a reasonably detailed
description thereof.
(8) Copies of all custodian agreements and depository
contracts under section 17(f) of the 1940 Act with
respect to securities and similar investments;
Copy of Custodian Agreement, dated February 26, 1990, 8(D)
between the Registrant and CoreStates Bank, N.A.,
(formerly Philadelphia National Bank)
Form of Amendment to Custodian Agreement 8(a)(G)
(9) Copies of all material contracts not made in the
ordinary course of business which are to be
performed in whole or in part at or after the date of
the filing of the Registration Statement;
Copy of Transfer Agency and Shareholder 9(a)(D)
Service Agreement dated January 1, 1989 between
Registrant and Declaration Service Company
Copy of Amendment No. 1 to Transfer Agency 9(b)(G)
Agreement dated May 15, 1990 with respect
to Declaration Cash Account.
Copy of Transfer Agency and Service 9(c)
Agreement Dated February 19, 1997 between
the Registrant for The Michigan Heritage
Fund and Declaration Service Company.
Copy of Accounting Services Agreement 9(d)
dated February 19, 1997 between the
Registrant with respect to The Michigan Heritage
Fund and Declaration Service Company.
Copy of Administration Agreement dated 9(e)
February 19, 1997 between the Registrant
with respect to The Michigan Heritage Fund and
Declaration Service Company.
(10) An opinion and consent of counsel as to the
legality of the securities being registered,
indicating whether they will, when sold,
be legally issued, fully paid and non-assessable;
Copy of opinion and consent of counsel
attached as an Exhibit to Rule 24f-2 Notice
filed by Registrant on February 28, 1997 relating to
Declaration Cash Account and incorporated herein
by reference.
Copy of opinion and consent of counsel
relating to The Michigan Heritage Fund (10)
(11) Copies of any other opinions, appraisals. None
(12) All financial statements omitted from Item 23. None
(13) Copies of any agreements or understandings made in None
consideration for providing the initial capital between
and among the Registrant, the Underwriter, advisor,
promoter, or initial stockholders and written
assurances from promoters or initial stockholders
that their purchases were made for investment
purposes without any present intention of
redeeming or reselling.
(14) Copies of model plan used in the establishment of any None
retirement plan in conjunction with which Registrant
offers its securities, any instructions thereto and any
other documents making up the model plan. Such form(s)
should disclose the costs and fees charged in connection
therewith.
(15) Copies of any plan entered into by Registrant pursuant
to Rule 12b-1 under the 1940 Act, which describes all
material aspects of the financing of distribution
of Registrant's shares, and any agreements with any
person relating to implementation of such plan;
Copy of Plan of Distribution adopted by Registrant
dated December 8, 1988 15(C)
Copy Amendment to Plan of Distribution dated
May 15, 1990 relating to Declaration Cash Account. 15(a)(F)
Copy of Distribution Plan of The Michigan Heritage 15(b)
Fund pursuant to Rule 12b-1.
(16) Schedule for compensation of each performance
quotation provided in the Registration Statement
in response to Item 22 (which need not be audited);
Computations of a $1,000 Hypothetical Investment 16(a)
Declaration Fund-The Michigan Heritage Fund series;
(A) This Exhibit formed part of Post-Effective Amendment No. 1 that was
filed with the Commission on March 3, 1982.
(B) This Exhibit formed part of Post-Effective Amendment No. 12 that was
filed with the Commission on April 20, 1988.
(C) This Exhibit formed part of Post-Effective Amendment No. 13 that was
filed with the Commission on March 20, 1989.
(D) This Exhibit formed part of Post-Effective Amendment No. 15 that was
filed with the Commission on March 1, 1990.
(E) This Exhibit formed part of Post-Effective Amendment No. 16 that was
filed with the Commission on May 14, 1990.
(F) This Exhibit formed part of Post-Effective Amendment No. 17 that was
filed with the Commission on February 15, 1991.
(G) This Exhibit formed part of Post-Effective Amendment No. 19 that was
filed with the Commission on April 30, 1992.
(H) Registrant pursuant to the provisions of Rule 102(c) of Regulation ST
filed as part of Post Effective Amendment No. 26 to its registration
statement a copy of the Trust Agreement, as amended; the Trust Bylaws,
and the Investment Management Agreement, as amended, with respect to
Declaration Cash Account.
Item 25. Persons Controlled by or Under Common Control with Registrant
Item 26. Number of Holders of Securities
Title of Class Number of Record Holders
---------------- ------------------------
Common Capital Stock One
The Michigan Heritage Fund Series As of March 1, 1997
Item 27. Trustee Liability and Indemnification
Liability to third parties for any act, omission or obligation of
a Trustee when acting in such capacity shall extend to the whole trust
estate or so much thereof as may be necessary to discharge such liability
but personal liability shall not attach to the Trustee or the beneficiaries
of the Trust for any such act, omission or liability. The provisions of
Subchapter B of Chapter 5 of the Pennsylvania Business Corporation Law
(relating to indemnification and corporate directors' liability) shall be
applicable to the Trustees of the Trust.
Indemnification of Trustees and Officers and Insurance
(a) The Trust shall have the power to purchase and maintain
insurance on behalf of any person who is or was a Trustee or officer of the
Trust, or is or was serving at the request of the Trust as a director,
officer, employee or agent of a corporation, partnership, joint venture,
trust or other enterprise against any liability asserted agonist him and
incurred by him in any such capacity, or arising out of this status as
such, whether or not the Trust would have the power to indemnify him
against such liability under the provisions of this Section.
(b) No indemnification or other protection shall be made or given
to any Trustee or officer of the Trust against any liability to the Trust
or to its Shareholders (i) to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (ii) which would
violate the provisions of Section 17(h) or (i) of the Act as those
provisions may be amended from time to time, together with the Rules and
Regulations of the Commission adopted thereunder.
Item 28. Business and Other Connections of Investment Advisor
Dickinson Asset Management, Inc. 301 MAC Avenue, East Lansing,
Michigan 48823 serves as investment manager to The Michigan Heritage Fund
and that is its primary occupation, currently. Reference is made to page
____ of the Statement of Additional Information for a listing of the
principal officers and directors of Dickinson Asset Management, Inc.
Item 29. Principal Underwriters
Item 30. Location of Accounts and Records
The records, which are being maintained by the Custodian of the
assets of The Michigan Heritage Fund series, pertaining to the
custodianship of the assets are located at the Custodian's place of
business; all other records and accounts, including those relating to the
investment advisory services that are being provided to The Michigan
Heritage Fund by Dickinson Asset Management, Inc. are being maintained at
the offices of Registrant - Suite 6160, 555 North Lane, Conshohocken,
Pennsylvania, 19428.
Item 31. Management Services
Item 32. Undertakings
(a) Registrant agrees that the Trustees of Declaration Fund will
promptly call a meeting of shareholders for the purpose of acting upon the
question of removal of a trustee or trustees, when requested in writing to
do so by the record holders of not less than 10% of the outstanding shares.
(b) The Fund undertakes to furnish to each person to whom a
prospectus is delivered with a copy of the Fund's latest annual report to
shareholders upon request and without charge.
(c) The Registrant undertakes to file a post-effective amendment
using financial statements which need not be certified, within four to six
months from the effective date of registrant's 1933 Act Registration
Statement respecting The Michigan Heritage Fund.
EXHIBIT 5(B)
THE MICHIGAN HERITAGE FUND
ADVISORY AGREEMENT
This ADVISORY 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 The Michigan Heritage Fund
(the "Fund"), a separate series of the Trust, and Dickinson Asset
Management, Inc. (the "Advisor"), a Michigan Corporation.
The Trust, and the Advisor hereby agree as follows:
1. Duties of the Advisor. The Advisor shall, during the term and
subject to the provisions of this Agreement, (i) determine the composition
of the Fund's portfolio, the nature and timing of the changes therein and
the manner of implementing such changes and (ii) provide the Trust, with
respect to the Fund, and/or the Trust's Board of Trustees with such
investment advisory research and related services as the Trust, and/or the
Trust's Board of Trustees may, from time to time, reasonably require. The
Advisor shall perform such duties in accordance with the applicable
provisions of the Trust's Declaration of Trust, Trust By-laws and current
Fund prospectus and statement of additional information, and any directions
it may receive from the Trust's Board of Trustees.
2. Expenses Payable by the Fund. The Fund shall distribute its own
shares in accordance with the terms of the DISTRIBUTION AGREEMENT dated
February 19, 1997 between the Advisor, the Trust with respect to the Fund,
and Declaration Distributors, Inc. (the "Distributor"); and the
DISTRIBUTION PLAN dated February 19, 1997 between the Trust with respect to
the Fund, the Advisor, and the Distributor adopted pursuant to the
provisions of Rule 12b-1 under Section 12(b) of the Investment Company Act
of 1940. An annual fee equal to 1/4 of 1% of the average daily net asset
value of the Fund shall be paid to the Distributor pursuant to the terms of
the Distribution Plan. The Distributor may also, in the future, determine
to enter into share distribution agreements with one or more registered
broker-dealers for the distribution of Fund shares.
The Trust shall also pay out of Fund assets all administrative and
other costs and expenses incurred in connection with its operations and
transactions not specifically assumed by Declaration Distributors, Inc. or
Declaration Service Company, including, without limitation, transfer agent
and custodian fees; legal and audit expenses; expenses relating to the
redemption of its shares; expenses of holding annual shareholder meetings;
expenses relating to the servicing of shareholder accounts; fees and
expenses incurred in connection with the printing and distribution of its
proxy statements, stockholders reports and notices; trade association fees;
cost of supplies and postage; fees and expenses relating to the
registration of the Fund's shares under federal and state laws and
regulations; applicable federal, state and local taxes; insurance premiums;
the costs of personnel necessary to maintain the Fund's records, perform
daily pricing and service shareholder requests: taxes, interest and
brokerage commissions; and such nonrecurring 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 that the Fund may have to
indemnify the Trust's trustees and officers with respect thereto.
The Trust will pay out of Fund assets its' proportionate share of the
fees and expenses of the non interested Trustees of the Trust.
3. Expenses Payable by the Advisor. The Advisor shall furnish, without
expense to the Fund, the services of those of the Advisor's officers and
full-time employees who may be duly elected executive officers or trustees
of the Trust, subject to their individual consent to serve and to any
limitations imposed by law, and shall pay it's proportional share of all of
the salaries, fees and expenses of the Trust's interested Trustees,
president, vice-presidents, secretary and treasurer and the salaries, fees
and expenses of all personnel who perform services related to research and
investment activities on behalf of the Fund.
The Advisor has agreed that if the aggregate expenses of the Fund
including the management fee but excluding taxes, interest, brokerage
commissions and extraordinary items, should exceed 2.5% of the average
daily net assets of the Fund (based on a determination of the Fund's net
asset value on the last business day of each month of the year) then such
excess expenses will be reimbursed to the Fund by the Advisor but only to
the extent of the management fee.
4. Compensation of the Advisor. The Fund shall pay to the Advisor and
the Advisor shall accept as compensation for the services provided by the
Advisor an annual fee of 1.00% of average daily net assets.
The fee shall be accrued for each calendar day and the sum of the daily
fee accruals shall be paid monthly to the Advisor on the first business day
of the next succeeding calendar month. If this Agreement becomes effective
or terminates before the end of any month, the fee for the period from the
effective date to the end of such month or from the beginning of such month
to the date of termination, as the case may be, shall be prorated according
to the proportion which such period bears to the full month in which such
effectiveness or termination occurs.
5. Brokerage Commissions. The Advisor, in carrying out its duties, is
hereby authorized, to the fullest extent now or hereafter permitted by law,
to cause the Fund to pay a member of a national securities exchange, or a
broker/dealer, an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of such
exchange, or broker/dealer would have charged for effecting that
transaction, if the Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services (as such services are defined under Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided by such member, or
broker/dealer, viewed in terms of either that particular transaction or the
Advisor's overall responsibilities with respect to the accounts as to which
it exercises investment discretion (as such term is defined in the
Securities Exchange Act of 1934, as amended).
6. Limitations on the Employment of the Advisor. The services of the
Advisor to the Fund shall not be deemed exclusive, and the Advisor may
engage in any other business or render similar or different services to
others so long as its services to the Fund hereunder are not impaired
thereby, and nothing in this Agreement shall limit or restrict the right of
any director, officer or employee of the Advisor to engage in any other
business or to devote its time and attention, in part, to any other
business, whether of a similar or dissimilar nature, so long as this
Agreement or any extension, renewal or amendment remains thereof in effect.
The Advisor shall be the only investment advisor to the Fund, subject to
the Advisor's right to enter into sub-advisory agreements. The Advisor
assumes no responsibility under this Agreement other than to render the
services called for hereunder, and shall not be responsible for any action
of or direction by the Trust's Board of Trustees, or any committee thereof,
or any omission by any of them, unless such action or omission has been
caused by the Advisor's negligence, willful malfeasance, bad faith or
reckless disregard of its obligations and duties under this Agreement.
7. Effectiveness, Duration and Termination of Agreement. This
Agreement shall become effective on February 19, 1997, the requirements of
the Investment Company Act of 1940 having been satisfied, and shall
continue in effect until February 19, 1999, unless sooner terminated. It
shall continue, in effect, automatically for successive annual periods,
provided that such continuance is specifically approved at least annually
either by (a) the vote of a majority of the Trust's Board of Trustees cast
in person at a meeting called for the purpose of voting on such Agreement
provided, that the continuance is also approved by a majority of such
Trustees who are not parties to this Agreement or "interested persons" (as
such term is defined in the Investment Company Act of 1940) of any such
party or (b) the vote of a majority of the Fund's outstanding voting
shares. This Agreement may be terminated at any time, without the payment
of any penalty, on 60 days prior written notice by the vote of a majority
of the Fund's outstanding voting securities or by the vote of a majority of
the Trust's Board of Trustees or by the Advisor, and will automatically
terminate in the event of its "assignment" (as such term is defined in the
Investment Company Act of 1940). Any notice under this Agreement shall be
given in writing, addressed and delivered or mailed, postage prepaid, to
the other party at its principal office as follows:
(a) if to the Trust with respect to
The Michigan Heritage Fund:
Declaration Trust
555 North Lane, Suite 6160
Conshohocken, PA 19428
ATTN: Terence P. Smith, Secretary
(b) if to the Advisor:
Dickinson Asset Management, Inc.
301 MAC Avenue
E. Lansing, MI 48823
ATTN: Mr. C. David Dickinson
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DECLARATION FUND, with respect to
The Michigan Heritage Fund
/S/ Terence P. Smith
- -----------------------------------
Mr. Terence P. Smith, Secretary
DICKINSON ASSET MANAGEMENT, INC.
/S/ C. David Dickinson
- -------------------------------------
Mr. C. David Dickinson, President
EXHIBIT 6(A)
THE MICHIGAN HERITAGE FUND
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (the "Agreement") is made as of the 19th
day of February, 1997 by and among DECLARATION TRUST (the "Trust") a
Pennsylvania Business Trust, on behalf of THE MICHIGAN HERITAGE FUND (the
"Fund"), a series of the Trust and DICKINSON ASSET MANAGEMENT, INC. (the
"Advisor"), a Michigan corporation, and DECLARATION DISTRIBUTORS, INC.
(the "Distributor"), 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, 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 Advisor has been appointed investment advisor with respect
to the Fund;
WHEREAS, the Distributor is a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") and is a member, in good
standing, of the National Association of Securities Dealers, Inc. (the
"NASD");
WHEREAS, the Trust has adopted a plan of distribution with respect to
the Fund (the "Distribution Plan") pursuant to Rule 12b-1 under the 1940
Act relating to the payment from the Fund assets of distribution expenses;
and
WHEREAS, the Trust, the Advisor and the Distributor desire to enter
into this Agreement pursuant to which the Distributor will provide
distribution services for the Portfolios of the Fund with respect to the
Fund Shares identified on Schedule A, 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, the
Advisor and the Distributor, all intending to be legally bound hereby,
agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Trust hereby appoints the
Distributor as its exclusive agent for the distribution of the Fund's
Shares, and the Distributor hereby accepts such appointment under the terms
of this Agreement. The Trust shall not sell any Fund Shares to any person
except to fill orders for the Fund Shares received through the Distributor;
provided, however, that the foregoing exclusive right shall not apply: (i)
to Fund Shares issued or sold in connection with the merger or
consolidation of any other investment company with the Trust or the
acquisition by purchase or otherwise of all or substantially all of the
assets of any investment company or substantially all of the outstanding
shares of any such company by the Trust; (ii) to Shares which may be
offered by the Trust to Fund shareholders for reinvestment of cash
distributed from capital gains realized or net investment income of the
Fund; or (iii) to Shares which may be issued to shareholders of other funds
who exercise any exchange privilege set forth in the Fund's Prospectus.
Notwithstanding any other provision hereof, the Trust may terminate,
suspend, or withdraw the offering of the Fund Shares whenever, in its sole
discretion, it deems such action to be desirable, and the Distributor shall
process no further orders for Fund Shares after it receives notice of such
termination, suspension or withdrawal.
2. FUND DOCUMENTS. The Trust has provided the Distributor with
properly certified or authenticated copies of the following Trust related
documents in effect on the date hereof: the Trust's organizational
documents, including Trust Indenture and By-Laws; the Trust's Registration
Statement on Form N-1A, including all exhibits thereto; the Fund's most
current Prospectus and Statement of Additional Information; and resolutions
of the Trust's Board of Trustees authorizing the appointment of the
Distributor and approving this Agreement. The Trust shall promptly provide
to the Distributor copies, properly certified or authenticated, of all
amendments or supplements to the foregoing. The Trust shall provide to the
Distributor copies of all other information which the Distributor may
reasonably request for use in connection with the distribution of Fund
Shares, 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
Distributor with such number of copies of the current Fund Prospectus,
Statement of Additional Information and shareholder reports as the
Distributor shall reasonably request.
3. DISTRIBUTION SERVICES. The Distributor shall sell and repurchase
Fund Shares as set forth below, subject to the registration requirements of
the 1933 Act and the rules and regulations thereunder, and the laws
governing the sale of securities in the various states ("Blue Sky Laws"):
a. The Distributor, as agent for the Fund, shall sell Fund Shares
to the public against orders therefor at the public offering price,
which shall be the net asset value of the Shares then in effect.
b. The net asset value of the Fund Shares shall be determined in
the manner provided in the then current Fund Prospectus and Statement
of Additional Information. The net asset value of the Fund Shares
shall be calculated by the Trust or by another entity on behalf of the
Trust. The Distributor shall have no duty to inquire into or liability
for the accuracy of the net asset value per Share as calculated.
c. Upon receipt of purchase instructions, the Distributor shall
transmit such instructions to the Trust or its transfer agent for
registration of the Fund Shares purchased.
d. The Distributor shall also have the right to take, as agent for
the Trust, all actions which, in the Distributor's judgment, are
necessary to effect the distribution of Fund Shares.
e. Nothing in this Agreement shall prevent the Distributor or any
"affiliated person" of the Distributor from buying, selling or trading
any securities for its or their own account or for the accounts of
others for whom it or they may be acting; provided, however, that the
Distributor expressly agrees that it shall not, for its own account,
purchase any Shares of the Fund except for investment purposes and that
it shall not for its own account sell any such Shares except for
redemption of such Shares by the Fund, and that it shall not undertake
activities which, in its judgment, would adversely affect the
performance of its obligations to the Trust on behalf of the Fund under
this Agreement.
f. The Distributor, as agent for the Trust with respect to the
Fund, shall repurchase Fund Shares at such prices and upon such terms
and conditions as shall be specified in the Fund's Prospectus.
4. DISTRIBUTION SUPPORT SERVICES. In addition to the sale and
repurchase of Shares, the Distributor shall perform the distribution
support services set forth on Schedule B attached hereto, as may be amended
from time to time. Such distribution support services shall include:
review and submission to the NASD of sales and marketing literature; NASD
required recordkeeping; and quarterly reports to the Trust's Board of
Trustees. Such distribution support services may also include: fulfillment
services, including telemarketing, printing, mailing and follow-up
tracking of sales leads; and licensing Advisor or Trust personnel as
registered representatives of the Distributor and related supervisory
activities.
5. REASONABLE EFFORTS. The Distributor shall use all reasonable
efforts in connection with the distribution of Fund Shares. The
Distributor shall have no obligation to sell any specific number of Shares
and shall only sell Shares against orders received therefor. The Trust
shall retain the right to refuse at any time to sell any Fund Shares for
any reason deemed adequate by it.
6. COMPLIANCE. In furtherance of the distribution services being
provided hereunder, the Distributor, the Trust, and the Advisor agree as
follows:
a. The Distributor shall comply with the Rules of Fair Practice of
the NASD and the securities laws of any jurisdiction in which it sells,
directly or indirectly, Fund Shares.
b. The Distributor shall require each dealer with whom the
Distributor has a selling agreement to conform to the applicable
provisions of the Fund's current Prospectus and Statement of Additional
Information, with respect to the public offering price of the Shares.
c. The Trust agrees to furnish to the Distributor sufficient
copies of any agreements, plans, communications with the public or
other materials it intends to use in connection with any sales of Fund
Shares in a timely manner in order to allow the Distributor to review,
approve and file such materials with the appropriate regulatory
authorities and obtain clearance for use. The Trust agrees not to use
any such materials until so filed and cleared for use by appropriate
authorities and the Distributor.
d. The Distributor, at its own expense, shall qualify and maintain
its qualification as a broker or dealer, or otherwise, under all
applicable Federal or state laws required to permit the sale of Fund
Shares in such states as shall be mutually agreed upon by the parties;
provided, however that the Distributor shall have no obligation to
register as a broker or dealer under the Blue Sky Laws of any
jurisdiction if it determines that registering or maintaining
registration in such jurisdiction would be uneconomical.
Notwithstanding any other terms of the paragraph, the Distributor
represents it is currently registered to do business in the State of
Michigan, and will continue to maintain said registration until this
agreement is terminated.
e. The Distributor shall not, in connection with any sale or
solicitation of a sale of the Fund Shares, make or authorize any
representative, service organization, broker or dealer to make, any
representations concerning the Shares except those contained in the
Fund's current Prospectus covering the Shares and in communications
with the public or sales materials approved by the Distributor as
information supplemental to such Prospectus.
7. EXPENSES. Expenses shall be allocated as follows:
a. The Trust on behalf of the Fund shall bear the following
expenses: preparation, setting in type, and printing of sufficient
copies of the Fund Prospectus and Statement of Additional Information
for distribution to existing shareholders; preparation and printing of
reports and other communications to existing shareholders; distribution
of copies of the Prospectus, Statement of Additional Information and
all other communications to existing shareholders; registration of Fund
Shares under the Federal securities laws; qualification of the Fund
Shares for sale in the jurisdictions mutually agreed upon by the Trust
and the Distributor; transfer agent/shareholder servicing agent
services; supplying information, prices and other data to be furnished
by the Trust under this Agreement; and any original issue taxes or
transfer taxes applicable to the sale or delivery of the Shares or
certificates therefor.
b. The Advisor shall pay all other expenses incident to the sale
and distribution of the Shares sold hereunder, including, without
limitation: printing and distributing copies of the Prospectus,
Statement of Additional Information and reports prepared for use in
connection with the offering of Shares for sale to the public;
advertising in connection with such offering, including public
relations services, sales presentations, media charges, preparation,
printing and mailing of advertising and sales literature; data
processing necessary to support a distribution effort; distribution and
shareholder servicing activities of broker-dealers and other financial
institutions; filing fees required by regulatory authorities for sales
literature and advertising materials; any additional out-of-pocket
expenses incurred in connection with the foregoing and any other costs
of distribution.
8. COMPENSATION. For the distribution and distribution support
services provided by the Distributor pursuant to the terms of the
Agreement, the Trust shall pay to the Distributor out of Fund assets the
compensation set forth in Schedule A attached hereto, which schedule may be
amended from time to time. To the extent that the 12b-1 fee is inadequate
to pay the Distributor's compensation when such compensation becomes due
and payable, the Advisor shall be responsible for and shall pay to the
Distributor the difference between the amount of the 12b-1 fee that may be
paid and the total compensation due to the Distributor. The Distributor
shall also be reimbursed for its out-of-pocket expenses related to the
performance of its duties hereunder, including, without limitation,
telecommunications charges, postage and delivery charges, record retention
costs, reproduction charges and traveling and lodging expenses (subject to
pre-approval by Mr. C. David Dickinson unless such travel is required for
compliance purposes or other required travel to perform Distributor duties
under this Agreement) incurred by officers and employees of the
Distributor. The Distributor's monthly invoices for distribution fees and
out-of-pocket expenses shall be paid to the Distributor within five days of
month-end. If this Agreement becomes effective subsequent to the first day
of the month or terminates before the last day of the month, the
Distributor shall be paid a distribution 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 Distributor as of the termination date shall survive the termination
of this Agreement.
9. USE OF DISTRIBUTOR'S NAME. The Trust shall not use the name of the
Distributor 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 Distributor;
provided, however, that the Distributor shall approve all uses of its own
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 Distributor 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
Advisor; provided, however, that the Advisor shall approve all uses of the
Fund's name that merely refer in accurate terms to the appointment of the
Distributor 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 DISTRIBUTOR. The duties of the Distributor shall be
limited to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Distributor hereunder. The
Distributor shall not be liable for any error of judgment 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. As used in this Section 11
and in Section 12 (except the second paragraph of Section 12), the term
"Distributor" shall include directors, officers, employees and other agents
of the Distributor.
12. INDEMNIFICATION OF DISTRIBUTOR. The Trust out of Fund assets
shall indemnify and hold harmless the Distributor against any and all
liabilities, losses, damages, claims and expenses (including, without
limitation, reasonable attorneys' fees and disbursements and investigation
expenses incident thereto) which the Distributor may incur or be required
to pay hereafter, in connection with any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or
legislative body, in which the Distributor may be involved as a party or
otherwise or with which the Distributor may be threatened, by reason of the
offer or sale of the Fund shares prior to the effective date of this
Agreement.
Any director, officer, employee, shareholder or agent of the
Distributor who may be or become an officer, Trustee, employee or agent of
the Trust shall be deemed, when rendering services to the Trust on behalf
of the Fund or acting on any business of the Trust for the Fund (other than
services or business in connection with the Distributor's duties
hereunder), to be rendering such services to or acting solely for the Trust
with respect to the Fund and not as a director, officer, employee,
shareholder or agent, or one under the control or direction of the
Distributor, even though receiving a salary from the Distributor.
The Trust with respect to the Fund agrees to indemnify and hold
harmless the Distributor, and each person, who controls the Distributor
within the meaning of Section 15 of the 1933 Act, or Section 20 of the
Securities Exchange Act of 1934, as amended ("1934 Act"), against any and
all liabilities, losses, damages, claims and expenses, joint or several
(including, without limitation, reasonable attorneys' fees and
disbursements and investigation expenses incident thereto) to which they,
or any of them, may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other Federal or state laws or regulations, at common law or
otherwise, insofar as such liabilities, losses, damages, claims and
expenses (or actions, suits or proceedings in respect thereof) arise out of
or relate to any untrue statement or alleged untrue statement of a material
fact contained in a Prospectus, Statement of Additional Information,
supplement thereto, sales literature or other written information prepared
with respect to the Fund and provided by the Trust with respect to the Fund
to the Distributor for the Distributor's use hereunder, or arise out of or
relate to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Distributor (or any person controlling the
Distributor) shall not be entitled to indemnity hereunder for any
liabilities, losses, damages, claims or expenses (or actions, suits or
proceedings in respect thereof) resulting from (i) an untrue statement or
omission or alleged untrue statement or omission made in the Prospectus,
Statement of Additional Information, or supplement, sales or other
literature, in reliance upon and in conformity with information furnished
in writing to the Trust with respect to the Fund by the Distributor
specifically for use therein or (ii) the Distributor's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations in the performance of this Agreement.
The Distributor agrees to indemnify and hold harmless the Trust with
respect to the Fund, and each person who controls the Trust within the
meaning of Section 15 of the 1933 Act, or Section 20 of the 1934 Act,
against any and all liabilities, losses, damages, claims and expenses,
joint or several (including, without limitation reasonable attorneys' fees
and disbursements and investigation expenses incident thereto) to which
they, or any of them, may become subject under the 1933 Act, the 1934 Act,
the 1940 Act or other Federal or state laws, at common law or otherwise,
insofar as such liabilities, losses, damages, claims or expenses arise out
of or relate to any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or Statement of Additional
Information or any supplement thereto, or arise out of or relate to any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, if based upon information furnished orally or in writing to the
Trust respecting the Fund or any public purchaser of Fund securities by the
Distributor.
A party seeking indemnification hereunder (the "Indemnitee") shall give
prompt written notice to the party from whom indemnification is sought
("Indemnitor") 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 Indemnitor of such written
assertion or claim shall not relieve the Indemnitor of any liability
arising from this Section. The Indemnitor shall be entitled, if it so
elects, to assume the defense of any suit brought to enforce a claim
subject to this Indemnity and such defense shall be conducted by counsel
chosen by the Indemnitor and satisfactory to the Indemnitee; provided,
however, that if the defendants include both the Indemnitee and the
Indemnitor, and the Indemnitee 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 Indemnitor ("conflict of
interest"), the Indemnitor shall not have the right to elect to defend such
claim on behalf of the Indemnitee, and the Indemnitee shall have the right
to select separate counsel to defend such claim on behalf of the
Indemnitee. In the event that the Indemnitor elects to assume the defense
of any suit pursuant to the preceding sentence and retains counsel
satisfactory to the Indemnitee, the Indemnitee shall bear the fees and
expenses of additional counsel retained by it, except for reasonable
investigation costs which shall be borne by the Indemnitor. If the
Indemnitor (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 Indemnitee or (iii) has no right to assume the defense
of a claim because of a conflict of interest, the Indemnitor shall advance
or reimburse the Indemnitee, at the election of the Indemnitee, reasonable
fees and disbursements of any counsel retained by Indemnitee, including
reasonable investigation costs providing such fees and expenses are
reimbursable to the Indemnitee according to the terms of this Agreement.
13. DUAL EMPLOYEES. The Advisor agrees that only its employees who
are registered representatives of the Distributor ("dual employees") shall
engage in the offer, sale, and distribution of Fund Shares of the
Portfolios and further agrees that the activities of any such employees as
registered representatives of the Distributor shall be limited the to
offer, sale, and distribution of Fund Shares. If there are dual employees,
one employee of the Advisor shall register as a principal of the
Distributor and assist the Distributor in monitoring the marketing and
sales activities of the dual employees. The Advisor shall maintain errors
and omissions and fidelity bond insurance policies providing reasonable
coverage for its employees activities and shall provide copies of such
policies to the Distributor. The Advisor shall indemnify and hold harmless
the Distributor against any and all liabilities, losses, damages, claims
and expenses (including reasonable attorneys' fees and disbursements and
investigation costs incident thereto) arising from or related to the
Advisor's employees' activities as registered representatives of the
Distributor, including, without limitation, any and all such liabilities,
losses, damages, claims and expenses arising from or related to the breach
by such dual employees of any rules or regulations of the NASD or SEC.
14. FORCE MAJEURE. The Distributor shall not be liable for any delays
or errors 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 Distributor and not primarily
attributable to the failure of the Distributor to reasonably maintain or
provide for the maintenance of such equipment, the Distributor shall, at no
additional expense to the Trust or the Fund, take reasonable steps in good
faith to minimize service interruptions, but shall have no liability with
respect thereto.
15. SCOPE OF DUTIES. The Distributor, the Trust, and the Advisor
shall regularly consult with each other regarding the Distributor's
performance of its obligations and its compensation under the foregoing
provisions. In connection therewith, the Trust and the Fund shall submit
to the Distributor 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 with respect to the Fund. Any change in such materials
that would require any change in the Distributor's obligations under the
foregoing provisions shall be subject to the Distributor's approval. In
the event that a change in such documents or in the procedures contained
therein increases the cost or burden to the Distributor of performing its
obligations hereunder, the Distributor shall be entitled to receive
additional reasonable compensation therefore either from the Fund in the
form of a 12b-1 payment or by the Advisor to the extent that 12b-1 fees are
not available.
16. DURATION. This Agreement shall become effective as of the date
first above written, and shall continue in force for two years from that
date and thereafter from year to year, provided continuance is approved at
least annually by either the vote of a majority of the Trustees of the
Trust, or by the vote of a majority of the outstanding voting securities of
the Fund.
17. 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. This Agreement shall terminate upon the failure to approve the
continuance of the Agreement after the initial two year term as set
forth in Section 6 above.
c. This Agreement shall terminate at any time upon a vote of the
majority of the Trustees or by a vote of the majority of the
outstanding voting securities of the Trust, upon not less than 60 days
prior written notice to the Distributor.
d. The Distributor may terminate this Agreement upon not less than
60 days prior written notice to the Trust.
Upon the termination of this Agreement, the Trust shall pay to the
Distributor out of Fund assets such compensation and out-of-pocket expenses
as may be due and payable for the period prior to the effective date of
such termination. In the event that the Trust designates a successor to
any of the Distributor's obligations hereunder, the Distributor shall, at
the expense and direction of the Trust on behalf of the Fund, transfer to
such successor all relevant books, records and other data established or
maintained by the Distributor pursuant to the foregoing provisions.
Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 21, 22, 24, 25 and 26
shall survive any termination of this Agreement.
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 Distributor, the Trust and the
Advisor and shall not become effective unless its terms have been approved
by the majority of the Trustees of the Trust or by a "vote of majority of
the outstanding voting securities" of the Fund.
19. NON-EXCLUSIVE SERVICES. The services of the Distributor rendered
to the Trust with respect to the Fund are not exclusive. The Distributor
may render such services to any other investment company and have other
businesses and interests.
20. DEFINITIONS. As used in this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," "interested
person" and "affiliated person" shall have the respective meanings
specified in the 1940 Act and the rules enacted thereunder as now in effect
or hereafter amended.
21. CONFIDENTIALITY. The Distributor and the Trust shall treat
confidentially and as proprietary information relating to 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.
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 20 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Advisor:
The Michigan Heritage Fund
C/O Dickinson Asset Management, Inc.
301 MAC Avenue
East Lansing, MI 48823
ATTN: Mr. C. David Dickinson
(b) if to the Trust:
Declaration Trust
555 North Lane, Suite 6160
Conshohocken, PA 19428
ATTN: Mr. Terence P. Smith, Secretary
with a copy to the Advisor
unless such notice is given by the Advisor
(c) if to the Distributor:
Declaration Distributors, Inc.
555 North Lane, Suite 6160
Conshohocken, PA 19428
Attn: Mr. Terence P. Smith, 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.
DICKINSON ASSET MANAGEMENT, INC.
/S/ C. David Dickinson
BY: -----------------------------------
Mr. C. David Dickinson
DECLARATION FUND with respect to
The Michigan Heritage Fund
/S/ Terence P. Smith
By: -----------------------------------
Mr. Terence P. Smith, Secretary
DECLARATION DISTRIBUTORS, INC.
/S/ Terence P. Smith
By: -----------------------------------
Mr. Terence P. Smith, President
<PAGE>
SCHEDULE A
The Michigan Heritage Fund
Portfolio and Fee Schedule
Portfolios covered by Distribution Agreement:
The Michigan Heritage Fund
Fees for distribution and distribution support
services on behalf of the Portfolios:
Annual Fee $ 20,000
Plus standard out-of-pocket expenses including (but not limited to):
postage, courier, telephone line, travel (for compliance purposes and other
required travel), Fund specific costs related to Fund/SERV and Networking,
printing, bank service charges, wire charges, and other standard
miscellaneous items.
<PAGE>
SCHEDULE B
Distribution Support Services
1. Provide national broker dealer for Fund registration.
2. Review and submit for approval all advertising and promotional
materials.
3. Maintain all books and records required by the NASD.
4. Monitor Distribution Plan and report to Board of Trustees of the
Trust.
5. Prepare quarterly reports to Board of Trustees of the Trust relating
to distribution activities.
6. Subject to approval of Distributor, license Advisor personnel as
registered representatives of the Distributor.
7. Telemarketing services (additional cost - to be negotiated).
8. Fund fulfillment services, including sampling prospective
shareholders inquiries and related mailings (additional cost - to be
negotiated).
EXHIBIT 9(C)
THE MICHIGAN HERITAGE FUND
TRANSFER AGENCY AND SHAREHOLDER SERVICES AGREEMENT
THIS TRANSFER AGENCY AND SHAREHOLDER 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 series of the Trust
and Declaration Service Company (the "Transfer Agent"), a Pennsylvania
corporation.
WITNESSETH THAT:
WHEREAS, the Trust is registered as a Series of the Trust, 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 (hereafter the "Portfolio" or "Portfolios") and
WHEREAS, the Transfer Agent is registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended (the "1934
Act"); and
WHEREAS, the Trust on behalf of the Fund and the Transfer Agent desire
to enter into this Agreement pursuant to which the Transfer Agent will
provide transfer agent, shareholder servicing agent and dividend disbursing
agent services to the Portfolio of the Fund identified on Schedule A
hereto, as may be amended from time to time ("Schedule A"), on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust on behalf of the Fund and the
Transfer Agent, intending to be legally bound hereby, agree as follows:
1. APPOINTMENT OF TRANSFER AGENT. The Trust hereby appoints the
Transfer Agent as transfer agent, shareholder servicing agent and dividend
disbursing agent for all Shares of the Fund identified on Schedule A, and
the Transfer Agent hereby accepts such appointment under the terms of this
Agreement. The Transfer Agent shall issue, redeem and transfer shares,
provide related shareholder services, pay dividends and make other
distributions, all as set forth on Schedule B hereto, as it may be amended
from time to time ("Schedule B"), and in accordance with the terms of this
Agreement.
2. FUND DOCUMENTS. The Trust has provided the Administrator with
properly certified or authenticated copies of the following Trust related
documents in effect on the date hereof: the Trust's organizational
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 Transfer Agent and approving this Agreement. The Trust shall promptly
provide to the Transfer Agent copies, properly certified or authenticated,
of all amendments or supplements to the foregoing. The Trust shall provide
to the Transfer Agent 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 Transfer Agent with such
number of the current Fund Prospectus, Statement of Additional Information
and shareholder reports as the Transfer Agent shall reasonable request.
3. ISSUANCE, REDEMPTION AND TRANSFER OF SHARES. The Transfer Agent
shall follow the procedures for the issuance, redemption and transfer of
Fund Shares set forth in this Section 3:
a. The Transfer Agent shall accept purchase orders and redemption
requests with respect to Fund Shares on each Fund business day in
accordance with the current Fund Prospectus and Statement of Additional
Information provided to the Transfer Agent by the Trust pursuant to
Section 2 hereof. The Trust shall provide the Transfer Agent with
sufficient advance notice to enable the Transfer Agent to effect any
changes in the purchase and redemption procedures set forth in the Fund
Prospectus and Statement of Additional Information; provided, however,
that in no event shall such advance notice be less than 30 days.
b. If applicable, the Transfer Agent shall also be sent, with
respect to each Fund business day, at such times as are agreed upon
from time to time by the Transfer Agent and the Trust, a computer tape
or electronic data transmission consistent in all respects with the
Transfer Agent's record format, as it may be amended from time to time,
which is reasonably believed by the Transfer Agent to be furnished by
or on behalf of any servicing agent approved by the Trust ("Servicing
Agent"). The Transfer Agent reserves the right to approve, in advance,
any Servicing Agent, which approval shall not be unreasonably withheld.
c. On each Fund business day, the Transfer Agent shall, as of the
time of the computation of the net asset value of the Fund, issue to
and redeem from the accounts specified in a purchase order, redemption
request, or computer tape or electronic data transmission, the
appropriate number of full and fractional Fund Shares based on the net
asset value per Fund Share specified in a written advice received with
respect to the Fund on such Fund business day. Notwithstanding the
foregoing, if a redemption specified in a computer tape or electronic
data transmission is for a dollar value of Fund Shares in excess of the
dollar value of Fund Shares in the specified account, the Transfer
Agent shall not effect such redemption, in whole or in part, and shall
within 24 hours orally advise the Servicing Agent which supplied such
tape of the discrepancy.
d. In connection with a reinvestment of a dividend or distribution
on Shares of the Fund, the Transfer Agent shall as of each Fund
business day, as specified in certified resolutions of the Fund's Board
of Trustees, issue Shares of the Fund based on the net asset value per
Share of such Fund specified in a written advice received from the
Trust with respect to the Fund on such Fund business day.
e. On each Fund business day, the Transfer Agent shall supply the
Trust with respect to the Fund, with a written statement specifying
with respect to the immediately preceding Fund business day: the total
number of Shares of the Fund (including fractional Shares) issued and
outstanding at the opening of business on such day; the total number of
Shares of the Fund sold on such day; the total number of Shares of the
Fund redeemed on such day; the total number of Shares of the Fund
issued, if any, pursuant to Section 3d hereof; and the total number of
Shares of the Fund issued and outstanding.
f. In connection with each purchase and each redemption of Shares,
the Transfer Agent shall send such written statements as are prescribed
by the Federal securities laws applicable to transfer agents or as
described in the Fund Prospectus and Statement of Additional
Information.
g. As of each Fund business day, the Transfer Agent shall furnish
the Trust with a written advice setting forth the number and dollar
amount of Shares to be redeemed on such Fund business day.
h. Upon receipt of a proper redemption request and moneys paid to
it by the Fund's custodian ("Custodian") in connection with a
redemption of Shares, the Transfer Agent shall cancel the redeemed
Shares and after making appropriate deduction for any withholding of
taxes required by applicable law, (i) in the case of a redemption of
Shares pursuant to a redemption described in Section 3a hereof, make
payment in accordance with the redemption and payment procedures
described in the Fund's Prospectus and Statement of Additional
Information, and (ii) in the case of a redemption of Shares pursuant to
a computer tape or electronic data transmission described in Section 3b
hereof, make payment by directing a Federal funds wire order to the
account previously designated by the Servicing Agent specified in said
computer tape or electronic data transmission.
i. The Transfer Agent shall not be required to issue any Shares
after it has received from an officer of the Trust or from an
appropriate Federal or state authority written notification that the
sale of Shares has been suspended or discontinued, and the Transfer
Agent shall be entitled to rely upon such written notification.
j. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the payment
of any original issue or other taxes required to be paid in connection
with such issuance of any Fund Shares.
k. Except as otherwise provided in this Agreement, the Transfer
Agent shall transfer or redeem Shares upon presentation to the Transfer
Agent of instructions properly endorsed for transfer or redemption,
accompanied by such documents as the Transfer Agent deems necessary to
evidence the authority of the person making such transfer or
redemption, and bearing satisfactory evidence of the payment of stock
transfer taxes. The Transfer Agent shall have the right to refuse to
transfer or redeem Shares until it is satisfied that the instructions
are valid and genuine, and for that purpose it will require, unless
otherwise instructed in writing by an authorized officer of the Trust,
a guarantee of signature by an "Eligible Guarantor Institution" as that
term is defined by Rule 17Ad-15 under the 1934 Act. The Transfer Agent
shall also have the right to refuse to transfer or redeem Shares until
it is satisfied that the requested transfer or redemption is legally
authorized. The Transfer Agent shall not be liable for its refusal to
make transfers or redemptions which the Transfer Agent, in its
reasonable judgment, deems improper or unauthorized, or until it is
satisfied that there is no basis to any claims adverse to such transfer
or redemption. The Transfer Agent may, in effecting transfers and
redemptions of Shares, rely upon those provisions of the Uniform
Commercial Code or other laws relating to the transfer of securities,
as the same may be amended from time to time.
l. If instructed by the Trust the Transfer Agent shall issue
certificates representing Shares ("Certificates"). The Trust shall
supply to the Transfer Agent a sufficient number of blank Fund Share
Certificates and, from time to time, shall supply additional blank
Certificates upon the request of the Transfer Agent. Such blank
Certificates shall be signed manually or by facsimile signature by the
duly authorized officers of the Trust, and shall bear the corporate
seal or facsimile thereof of the Trust. Notwithstanding the death,
resignation or removal of any officer of the Trust, such executed
Certificates bearing the manual or facsimile signature of such officers
shall remain valid and may be issued to shareholders until the Trust
provides to the Transfer Agent a written advice to the contrary. The
Transfer Agent may issue new Certificates to replace Certificates
represented to have been lost, destroyed or stolen upon receiving an
appropriate bond of indemnity satisfactory to the Transfer Agent, and
may issue new Certificates in exchange for and upon surrender of
mutilated Certificates. Except as otherwise provided in Section 3k
hereof, the Transfer Agent shall issue new Certificates to evidence
transfers of Shares upon surrender of outstanding Certificates in the
form deemed by the Transfer Agent to be properly endorsed for transfer
with all necessary endorser's signatures guaranteed by an Eligible
Guarantor Institution.
4. DIVIDENDS AND DISTRIBUTIONS. The Transfer Agent shall pay dividends
and make other distributions in accordance with the following procedures:
a. The Trust shall furnish to the Transfer Agent certified
resolutions of the Trust's Board of Trustees, either (i) setting forth
the date of the declaration of a dividend or distribution, the date of
accrual or payment, the record date as of which shareholders entitled
to payment or accrual shall be determined, the amount per Fund Share of
such dividend or distribution, the payment date on which all previously
accrued and unpaid dividends are to be paid, and the total amount, if
any, payable to the Transfer Agent on such payment date, or (ii)
authorizing the declaration of dividends and distributions on a daily
or other periodic basis.
b. Upon the mail date specified in such resolutions, the Trust
shall, in the case of a cash dividend or distribution, cause the Fund's
Custodian to deposit in an account in the name of the Transfer Agent on
behalf of the Fund an amount of cash, if any, sufficient for the
Transfer Agent to make the payment, specified in such resolution to the
shareholders of record on the record date. The Transfer Agent shall,
upon receipt of any such cash, make payment of such cash dividends or
distributions to the shareholders of record as of the record date by:
(i) mailing a check, payable to the registered shareholder, to the
address of record or dividend mailing address, or (ii) wiring such
amounts to the accounts previously designated by a Servicing Agent, as
the case may be. If the Transfer Agent does not receive from the
Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Trust, withhold payment to all
shareholders of record as of the record date until sufficient cash is
provided to the Transfer Agent. In lieu of receiving from the
Custodian and paying the shareholders cash dividends or distributions,
the Transfer Agent may arrange for direct payment of cash dividends and
distributions to shareholders by the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time
by and among the Trust, the Transfer Agent and the Custodian.
c. The Transfer Agent shall file such appropriate information
returns concerning the payment of dividends and distributions with the
proper Federal, state and local authorities as are required by law to
be filed by the Trust with respect to the Fund, but shall in no way be
responsible for the collection or withholding of taxes due on such
dividends or distributions due to shareholders, except and only to the
extent required by applicable law.
5. RECORDKEEPING AND OTHER INFORMATION. The Transfer Agent shall
create and maintain all necessary records in accordance with all applicable
laws, rules and regulations, including, but not limited to, records
identified on Schedule B hereto and 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. 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 Transfer Agent for the periods and in the places required by Rule
31a-2 under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. The Transfer 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 Fund, the Transfer 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.
7. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as
otherwise provided herein, the Trust with respect to the Fund assumes full
responsibility for ensuring that the Fund complies with all applicable
requirements of the 1933 Act, the 1934 Act, the 1940 Act and rules
thereunder, and any other applicable laws, rules and regulations are
complied with.
8. COMPENSATION. The Trust shall pay to the Transfer Agent out of Fund
assets as compensation for 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 out of Fund assets the
Transfer Agent for its out-of-pocket expenses related to the performance of
its duties hereunder, including, without limitation, telecommunications
charges (such as toll-free lines and voice response system); postage and
delivery services; record retention costs (such as microfilm, microfiche
and off-site storage); reproduction charges; custom programming; and
traveling and lodging expenses incurred by officers and employees of the
Transfer Agent (subject to pre-approval of C. David Dickinson unless such
travel is required to perform Transfer Agent duties under this Agreement).
The Trust shall pay out of Fund assets the Transfer Agent's monthly
invoices for transfer agency fees and out-of-pocket expenses within 5 days
of the end of the 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 out of Fund assets the Transfer Agent a transfer agency 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 Transfer Agent as of the termination date
shall survive the termination of this Agreement.
9. APPOINTMENT OF AGENTS. The Transfer 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 Transfer Agent
may from time to time direct; provided, however, that the appointment of
any such agent shall not relieve the Transfer Agent of any of its
responsibilities or liabilities hereunder.
10. USE OF TRANSFER AGENT'S NAME. The Trust shall not use the name of
the Transfer Agent or any of its affiliates in any 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 Transfer Agent; provided, however, that the Transfer Agent 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 a 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 Transfer 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, Dickinson Asset Management, Inc.; provided,
however, that the Advisor shall approve all uses of the Fund's name that
merely refer in accurate terms to the appointment of the Transfer Agent
hereunder or that are required by the SEC or state securities commission;
and further provided, that in no event shall such approval be unreasonably
withheld.
12. LIABILITY OF TRANSFER AGENT. The Transfer Agent's liability shall
be limited as follows:
a. The duties of the Transfer Agent shall be limited to those
expressly set forth herein, and no implied duties are assumed by or may
be asserted against the Transfer Agent hereunder.
b. The Transfer Agent shall not be liable for any error of
judgement or mistake of law or for any loss suffered by the Trust with
respect to 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.
c. The Transfer 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 Transfer Agent's duties, and
the Transfer Agent shall not be liable for any action taken or omitted
by the Transfer Agent in good faith in reliance on the oral or written
advice of such counsel, accountants or other experts.
d. The Transfer Agent shall not be liable for any action taken or
omitted by the Transfer Agent in reliance on the oral or written
instruction, authorization, approval or information provided to the
Transfer Agent by any person reasonably believed by the Transfer Agent
to be authorized by the Trust to give such instruction, authorization,
approval or information.
e. Any person, even though also an officer, director, employee or
agent of the Transfer Agent or any of its affiliates, who may be or
become an officer or Trustee of the Trust, shall be deemed, when
rendering services on behalf of the Fund as such officer or Trustee to
be rendering such services to or acting solely for the Trust and not as
an officer, employee, director or agent or one under the control or
direction of the Transfer Agent or any of its affiliates, even though
paid by one of those entities.
f. The Transfer Agent shall not be liable or responsible for any
acts or omissions of any predecessor transfer 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
Transfer Agent be responsible for reviewing any such act or omissions.
g. The Transfer Agent shall not be liable for any loss suffered by
the Fund or its shareholders in the event that a computer tape or
electronic data transmission from a Servicing Agent may not be
processed by the Transfer Agent for any reason beyond the reasonable
control of the Transfer Agent, or if any of the information on such
tape or transmission is reasonably believed by the Transfer Agent to be
incorrect.
h. The Transfer Agent shall not be liable for any action taken or
omitted by the Transfer Agent in reliance upon an opinion of counsel
respecting the provisions of the Uniform Commercial Code or other laws
relating to the transfers of securities, as the same may be amended
from time to time.
i. The Transfer Agent shall not be liable for its refusal to
transfer or redeem Shares in accordance with Section 3k hereof.
j. The Transfer Agent shall not be liable for any improper
dividend payments or distributions made in reliance on certified
resolutions of the Trust's Board of Trustees. In addition, the
Transfer Agent shall not be liable for the determination of the rate or
form of dividends or distributions due or payable to the shareholders
as set forth in the certified resolutions. The Transfer Agent shall
not be liable for any loss to the Fund resulting from processing by the
Transfer Agent of a dividend or distribution based on incorrect
information provided in the certified resolutions, and the Trust shall
pay to the Transfer Agent out of Fund assets any and all costs, both
direct and out-of-pocket, incurred to remedy such error.
k. The Transfer Agent shall not be liable to the Trust with
respect to the Fund for any redemption drafts processed in accordance
with written redemption draft procedures established by the Transfer
Agent and the Trust; it being understood that the Transfer Agent's sole
responsibility with respect to inspecting redemption drafts is to use
reasonable care to verify the drawer's signature against signatures on
file.
l. The Transfer Agent shall not be liable for permitting any
person to inspect shareholder records of the Fund, if it receives an
opinion from its counsel that there is a reasonable likelihood that the
Transfer Agent will be held liable for failure to permit access to such
shareholder records. The Transfer Agent shall promptly notify the
Trust that such disclosure has been made or is to be made.
m. The Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for: the legality of the issue or
sale of any Fund Shares, the sufficiency of the amount to be received
therefor, or the authority of a Servicing Agent or of the Trust, to
request such sale or issuance; the legality of a transfer of Shares, or
of a redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Servicing Agent or the Trust to
request such transfer or redemption; the legality of the declaration of
any dividend by the Trust, or the legality of the issue of any Shares
in payment of any stock dividends; or the legality of any
recapitalization or readjustment of Shares.
As used in this Section 12 (except Section 12e) and in Section 13, the
term "Transfer Agent" shall include officers, employees and other agents of
the Transfer Agent).
13. INDEMNIFICATION. The Trust shall indemnify and hold harmless the
Transfer 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 Transfer Agent (i) in connection with the performance of its duties
under this Agreement or (ii) for which it is not liable pursuant to Section
12 of this Agreement. This indemnity shall apply to any liability and
expense arising under applicable securities laws. The Transfer Agent shall
not be entitled to indemnity hereunder for any liability or expense
resulting from the Transfer 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 in the event of any pending or threatened
litigation; provided, however, that the Transfer Agent 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 form the Transfer Agent's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement.
The Transfer 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 the Transfer Agent'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 Transfer Agent; provided, however, that if the defendants include
both the Transfer Agent and the Trust, and the Transfer 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 the claim on behalf of the Transfer Agent, and the Transfer Agent
shall have the right to select separate counsel to defend such claim on
behalf of the Transfer 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 Transfer Agent, the Transfer 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. 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 Transfer 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 Transfer Agent, at the election of the Transfer Agent, out of
Fund assets, the reasonable fees and expenses of any counsel retained by
the Transfer Agent, including reasonable investigation costs providing such
fees and expenses are reimbursable to the Transfer Agent according to the
terms of this Agreement.
14. SCOPE OF DUTIES. The Transfer Agent and the Trust shall regularly
consult with each other regarding the Transfer Agent's performance of its
obligations and its compensation under the foregoing provisions. In
connection therewith, the Trust shall submit to the Transfer Agent, at a
reasonable time in advance of filing with the SEC, copies of any amended or
supplemented Registration Statement of the Fund (including exhibits) under
the 1933 Act and the 1940 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 any change in the Transfer Agent's
obligations under the foregoing provisions shall be subject to the Transfer
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 Transfer
Agent of performing its obligations hereunder, the Transfer Agent 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 mutually agreed to by the parties hereto.
b. Either the Trust, the Fund or the Transfer 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. 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 one of the other
parties (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
Transfer Agent 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 that the Trust designates a successor to
any of the Transfer Agent's obligations hereunder, the Transfer Agent
shall, at the expense and direction of the Fund, transfer to such successor
all relevant books, records and other data established or maintained by the
Transfer Agent under the foregoing provisions.
Sections 8, 10, 11, 12, 13, 16, 17, 21, 22, 23, 24, 25 and 26 shall
indefinitely survive any termination of this Agreement.
17. FORCE MAJEURE. The Transfer 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 Transfer Agent and not primarily attributable to the failure
of the Transfer Agent to reasonably maintain or provide for the maintenance
of such equipment, the Transfer 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.
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 Transfer Agent and the Trust.
19. NON-EXCLUSIVE SERVICES. The services of the Transfer Agent
rendered to the Trust on behalf of the Fund are not exclusive. The
Transfer Agent 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 specified in the
1940 Act and rules enacted thereunder as now in effect or hereafter
amended.
21. CONFIDENTIALITY. The Transfer Agent and the Trust 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.
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 21 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(b) if to the Trust:
Declaration Trust
555 North Lane, Suite 6160
Conshohocken, PA 19428
ATTN: Mr. Terence P. Smith, Secretary
with a copy to:
Dickinson Asset Management, Inc.
301 MAC Avenue
East Lansing, MI 48823
ATTN: Mr. C. David Dickinson
(b) if to the Transfer Agent:
Declaration Services Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
Attn: Mr. Terence Smith, President
or to such other respective addresses as the Trust or the Transfer
Agent 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/ Terence P. Smith
By: -------------------------------
Terence P. Smith, Secretary
DECLARATION SERVICE COMPANY
/S/ Terence P. Smith
By: ---------------------------
Terence P. Smith, President
<PAGE>
SCHEDULE A
The Michigan Heritage Fund
Portfolio and Fee Schedule
Portfolios covered by Transfer Agency and Shareholder Services Agreement:
The Michigan Heritage Fund
Fees for Transfer Agent services on
behalf of the Portfolios:
System setup, development of statements, etc. $75.00/hour Inside personnel
$150.00/hour Outside personnel
Transfer Agent, Dividend Disbursing & $ 18 Annual per account
Shareholder Services
1st Year Minimum Fee $ 18,000
2nd Year Minimum Fee 21,000
3rd Year Minimum Fee 24,000
Plus standard out of pocket expenses including (but not limited to):
postage, courier, telephone line, travel (subject to pre-approval by C.
David Dickinson unless such travel is required to perform Transfer Agent
duties under this Agreement), statement and confirmation costs, Fund
specific costs related to Fund/SERV and Networking, printing, bank service
charges, wire charges, and other standard miscellaneous items.
<PAGE>
SCHEDULE B
Transfer Agent, Shareholders Servicing Agent and
Dividend Disbursing Agent Services provided by Declaration Services Company
1. Examine and process new accounts, subsequent payments, liquidations,
exchanges, transfers, telephone transactions, check redemptions,
automatic withdrawals, and wire order trades.
2. Reinvest or pay dividends and make other distributions.
3. Answer investor and dealer telephone and/or written inquiries, except as
otherwise agreed by the Transfer Agent and the Fund.
4. Process and confirm address changes.
5. Process standard account record changes as required, i.e. Dividend
Codes, etc.
6. Microfilm and/or store source documents for transactions, such as
account applications and correspondence.
7. Perform backup withholding for those accounts in accordance with Federal
regulations.
8. Solicit missing taxpayer identification numbers.
9. Provide remote access inquiry to Fund records via Fund supplied hardware
(Fund responsible for connection line and monthly fee).
10. Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
a. Name and address, including zip code.
b. Balance of Shares.
c. Number of Shares, issuance date of each Share outstanding and
cancellation date of each Share no longer outstanding, if issued.
d. Balance of dollars available for redemption.
e. Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash).
f. Type of account code.
g. Establishment date indicating the date an account was opened,
carrying forward pre-conversion data as available.
h. Original establishment date for accounts opened by exchange.
i. W-9 withholding status and periodic reporting.
j. State of residence code.
k. Social security or taxpayer identification number, and indication of
certification.
l. Historical transactions on the account for the most recent 18
months, or other period as mutually agreed to from time to time.
m. Indication as to whether phone transaction can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant,
etc.
11. Provide the following reports and statements:
a. Prepare daily journals for Fund reflecting all Shares and dollar
activity for the previous day.
b. Supply information monthly for Fund's preparation of Blue Sky
reporting.
c. Supply monthly purchase, redemption and liquidation information for
use in Fund's N-SAR report.
d. Provide monthly average daily balance reports for Fund.
e. Prepare and mail copies of summary statements to dealers and
investment advisors.
f. Mail transaction confirmation statements daily to investors.
g. Address and mail four periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent).
h. Mail periodic statement to investors.
i. Compute, prepare and furnish all necessary reports to governmental
authorities: Forms 1099R, 1099DIV, 1099B, 1042 and 1042S.
j. Enclose various marketing material as designated by the Fund in
statement mailings, i.e. monthly and quarterly statements (material
must be adaptable to mechanical equipment as reasonably specified by
the Transfer Agent).
12. Prepare and mail confirmation statements to dealers daily.
13. Prepare certified list of stockholders for proxy mailing.
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, Dickinson 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, Dickinson 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
555 North Lane, Suite 6160
Conshohocken, PA 19428
ATTN: Mr. Terence P. Smith, Secretary
with a copy to:
Dickinson Asset Management, Inc.
301 Mac Avenue
East Lansing, MI 48823
Attn: Mr. C. David Dickinson
(b) if to the Accounting Services Agent:
Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
Attn: Mr. Terence Smith, 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/ Terence P. Smith
By: -------------------------------
Terence P. Smith, Secretary
DECLARATION SERVICE COMPANY
/S/ Terence P. Smith
By: ------------------------------
Terence P. Smith, President
<PAGE>
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.
David Dickinson 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.
<PAGE>
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.
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, mark-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, Dickinson 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. David Dickinson, 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
555 North Lane, Suite 6160
Conshohocken, PA 19428
ATTN: Mr. Terence P. Smith, Secretary
with a copy to:
Dickinson Asset Management, Inc.
301 MAC Avenue
East Lansing, MI 48823
Attn: Mr. C. David Dickinson
(b) if to the Administrator:
Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
Attn: Mr. Terence Smith, 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/ Terence P. Smith
By: ---------------------------
Terence P. Smith, Secretary
DECLARATION SERVICE COMPANY
/S/ Terence P. Smith
By: ---------------------------
Terence P. Smith, President
<PAGE>
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. David Dickinson 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.
<PAGE>
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.
EXHIBIT 10
Declaration Fund February 20, 1997
555 North Lane, Suite 6160
Conshohocken, PA 19428
Gentlemen:
As counsel for Declaration Fund, a Pennsylvania business trust (the
"Trust"), I have been asked to provide this opinion to you with respect to
the beneficial interest in the Trust which shall at all times be divided
into an unlimited number of transferable shares without par value that may
be issued in separate classes or series.
On March 14, 1990 the Board of Trustees of Consolidated Asset
Management Fund ("CAM Fund") approved the reorganization of CAM Fund as a
series fund authorized to issue its shares in one or more classes or
series, and change CAM Fund's name to "Declaration Fund". The Board
further authorized the creation of a series within Declaration Fund to be
designated "Declaration Cash Account, and authorized the exchange of the
whole and fractional shares of CAM Fund held by CAM Fund shareholders for
an equivalent number of whole or fractional shares of Declaration Cash
Account. CAM Fund's portfolio of assets would become Declaration Cash
Account's portfolio of assets.
On May 15, 1990, the shareholders of CAM Fund approved an amendment to
CAM Fund's trust indenture to (1) authorize the Fund to issue shares in
more than one series; (2) reclassify the Fund's outstanding shares as the
Declaration Cash Account series; and (3) change the name of the Fund to
Declaration Fund. On May 16, 1990, an Amended and Restated Declaration of
Trust was filed with the Pennsylvania Department of State to reflect that
the Trust existed pursuant to Chapter 95 of Section 15 of Pennsylvania
Consolidated Statutes Annotated, and that the Trust was being amended to
reflect, among other things, the above matters approved by the Board at its
March 14th meeting.
On February 12, 1992, the Board of Trustees of the Trust authorized the
creation of three additional series within Declaration Fund to be
designated, respectively, CAMCO 100% U.S. Treasury Short Term Fund, CAMCO
100% U.S. Treasury Intermediate Term Fund, and CAMCO 100% U.S. Treasury
Long Term Fund (subsequently renamed CAMCO 100% U.S. Treasury Total Return
Fund) (hereinafter collectively the "CAMCO Funds").
On August 23, 1995 the Board of Trustees approved an amendment to the
trust indenture to authorize the termination by the Trustees of any
separate series of Declaration Fund if there are no outstanding shares of
the separate series. At that time there were no outstanding shares of any
of the CAMCO Funds. The trust indenture was accordingly amended effective
October 5, 1995. The CAMCO Funds Series were terminated.
On February 19, 1997, the Board of Trustees of the Trust authorized the
creation of an additional series within Declaration Fund to be designated
The Michigan Heritage Fund.
MATTERS CONSIDERED
In connection with rendering this opinion, I have examined and am
familiar with the Amended and Restated Declaration of Trust dated March 14,
1990, and Bylaws, as the same have been amended, and the Minutes of the
Trust's proceedings found in the official Minute Book of the Trust. In
particular, I have examined the language of the Declaration of Trust
relating to Limitation on Shareholder Liability, as set forth in Section VI
of the said document, which provides, in pertinent part, as follows:
The trustees shall have no power to bind any shareholder personally or
to call upon any shareholder for the payment of any sum of money or
assessment whatsoever other than such sums as the shareholder may agree
to pay by way of subscription to any shares or otherwise...
With respect to the good standing of the Trust I have relied upon the
absence of any evidence in the Trust's Minute Book of the Trust's adoption
of a plan of liquidation or dissolution in accordance with the provisions
of paragraph 12.4 of the Declaration Trust.
I am a member of the bar of, and authorized to practice law by the
Courts of the Commonwealth of Pennsylvania. Accordingly, my opinion is
limited to the substantive laws of this and no other jurisdiction.
OPINION
Based upon the foregoing and subject to the limitations stated herein,
it is my opinion that:
1. The Trust is a validly organized and subsisting entity under the
laws of the Commonwealth of Pennsylvania. The Trust is legally authorized
to issue shares representing units of beneficial interest in the Trust at
prices determined and in the manner prescribed by the Trusts's currently
effective prospectus and statement of additional information, and provided
that such shares are properly registered under all applicable federal and
state securities laws.
2. The shares of the Trust issued with respect to the Declaration Cash
Account series and The Michigan Heritage Fund series when sold, issued and
delivered in accordance with the provisions of the registration statement
of the Trust on Form N-1A, as amended and in compliance with any and all
applicable "blue sky" state law requirements, will be validly issued, fully
paid and non-assessable.
The opinion is given as of the date hereof. No opinion is given as to
the personal liability of any shareholders of the Trust solely arising by
reason of his or her having been a shareholder of the Trust.
I consent to the inclusion of this opinion as an Exhibit to Post
Effective Amendment No. 27.
Very truly yours,
/S/ MARTIN V. MILLER
--------------------------------------
Martin V. Miller
EXHIBIT 15(B)
DISTRIBUTION PLAN OF THE MICHIGAN HERITAGE FUND
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by
DECLARATION FUND (the "Trust") on behalf of THE MICHIGAN HERITAGE FUND (the
"Fund"), a series of the Trust, for the use of the Fund. The Plan has been
approved by a majority of the Trust's Board of Trustees, including a
majority of the Trustees who are not interested persons of the Trust and
who have no direct or indirect financial interest in the operation of the
Plan (the "non-interested Trustees"), cast in person at a meeting called
for the purpose of voting on such Plan.
In reviewing the Plan, the Board of Trustees considered the proposed
schedule and nature of payments and terms of the ADVISORY AGREEMENT between
the Trust on behalf of the Fund and DICKINSON ASSET MANAGEMENT, INC. (the
"Advisor"), and the DISTRIBUTION AGREEMENT between the Trust on behalf of
the Fund, the Advisor, and DECLARATION DISTRIBUTORS, INC. (the
"Distributor").
The Board determined that the Plan should provide for distribution
payments and that adoption of the Plan would be prudent and in the best
interests of the Fund and its shareholders. Such approval included a
determination that in the exercise of their reasonable business judgment
and in light of their fiduciary duties, there is a reasonable likelihood
that the Plan will benefit the Fund and its shareholders. The Plan has
also been approved by a vote of the sole initial Fund shareholder.
The Provisions of the Plan are:
1. The Trust shall pay the Advisor, the Distributor or others out of
Fund assets for all expenses incurred by such parties in the promotion and
distribution of the shares of the Fund, including but not limited to,
personal services provided to prospective and existing Fund shareholders,
the costs of printing of prospectuses and reports used for sales purposes,
expenses of preparation of sales literature and promotional materials,
advertisements, and other distribution-related expenses, making slides and
charts for sales presentations, travel and related expenses as well as any
distribution or service fees paid to securities dealers or others who have
executed a servicing agreement with the Distributor, which form of
agreement has been approved by the Trustees, including the non-interested
Trustees of the Trust.
2. The maximum aggregate amount which may be paid by the Trust out of
Fund assets to such parties pursuant to Paragraph 1 herein shall be 0.25%
per annum of the average daily net assets of the Fund. Said payments shall
be made monthly to such parties.
3. The Advisor and the Distributor shall collect and monitor the
documentation of Fund payments made under Paragraphs 1 and 2 above, shall
furnish to the Board of Trustees of the Trust, for their review, on a
quarterly basis, a written report of the monies paid to the Advisor and to
the Distributor under the Plan and an accounting of the uses to which such
monies were put. They shall also furnish the Board of Trustees of the
Trust such other information as the Board may reasonably request in
connection with the Fund payments made under the Plan in order to enable
the Board to make an informed determination of whether the Plan should be
continued.
4. The Plan shall continue in effect for a period of more than one year
only so long as such continuance is specifically approved at least annually
by the Trust's Board of Trustees, including a majority of the
non-interested Trustees, cast in person at a meeting called for the purpose
of voting on the Plan.
5. The Plan, or any agreements entered into pursuant to this Plan, may
be terminated at any time, without penalty, by vote of a majority of the
outstanding voting securities of the Fund, or by vote of a majority of the
non-interested Trustees of the Trust, on not more than 60 days' written
notice, and shall terminate automatically in the event of the assignment of
the Advisory Agreement between the Trust with respect to the Fund and the
Advisor.
6. The Plan and any agreements entered into pursuant to the Plan may
not be amended to increase materially the amount to be reimbursed out of
Fund assets for distribution pursuant to Paragraph 2 hereof, without the
approval by a majority of the Fund's outstanding voting securities.
7. All material amendments to the Plan, or any agreements entered into
pursuant to the Plan, shall be approved by the non-interested Trustees of
the Trust cast in person at a meeting called for the purpose of voting on
any such amendment.
8. So long as the Plan is in effect, the selection and nomination of
the Trust's non-interested Trustees shall be committed to the discretion
of such non-interested Trustees.
9. This Plan shall take effect on the 19th day of February, 1997.
The Plan and the terms and provisions thereof are hereby accepted and
agreed to by the Trust with respect to the Fund, the Advisor and the
Distributor, as evidenced by their execution hereof.
DICKINSON ASSET MANAGEMENT, INC.
/S/ C. David Dickinson
By: -------------------------------------
Mr. C. David Dickinson, President
DECLARATION FUND with respect to
The Michigan Heritage Fund
/S/ Terence P. Smith
By: -------------------------------------
Mr. Terence P. Smith, Secretary
DECLARATION DISTRIBUTORS, INC.
/S/ Terence P. Smith
By: -------------------------------------
Mr. Terence P. Smith, President
EXHIBIT 16(A)
Declaration Fund - The Michigan Heritage Fund series
Expense Table Calculation
March 11, 1997
$1,000 invested, no-load 5% annual return, 1.75% expense,
$10 adminstrative service fee
5% - 1.75% = 3.25%
Year Amounts Average Expense Cumulative Redemption Total
% Total Fee
- -----------------------------------------------------------------------------
1 1,000 1,017 1.75% 18 10 28
1,033
2 1,033 1,050 1.75% 36 10 46
1,067
3 1,067 1,085 1.75% 55 10 65
1,102
4 1,102 1,120 1.75% 74 10 84
1,138
5 1,138 1,157 1.75% 94 10 104
1,175
6 1,175 1,194 1.75% 115 10 125
1,213
7 1,213 1,233 1.75% 136 10 146
1,252
8 1,252 1,273 1.75% 158 10 168
1,293
9 1,293 1,314 1.75% 181 10 191
1,335
10 1,335 1,357 1.75% 204 10 214
1,378
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, The Registrant has duly caused this Post-
Effective Amendment No. 27 to its Registration Statement under the
Investment Company Act of 1940, to be signed on its behalf by the
Undersigned, thereunto duly authorized, in Conshohocken, Pennsylvania on
the 19th day of February 1997.
DECLARATION FUND
/S/ Stephen B. Tily, III
BY: ------------------------
President
As required by the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ Stephen B. Tily, III February 19, 1997
- ------------------------- Trustee, Chairman of
Stephen B. Tily, III the Board, President
/S/ Arthur S. Filean March 7, 1997
- ------------------------- Trustee
Arthur S. Filean
/S/ William F. Lee, Jr. March 10, 1997
- ------------------------- Trustee
William F. Lee, Jr.
/S/ Thomas S. Stewart February 24, 1997
- ------------------------- Trustee
Thomas S. Stewart
/S/ Terence P. Smith March 3, 1997
- ------------------------- Secretary
Terence P. Smith
/S/ Paul L. Giorgio March 3, 1997
- ------------------------- Treasurer
Paul L. Giorgio
