U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.___
Post-Effective Amendment No.___
___________________________HARDING, LOEVNER FUNDS, INC._____________________
(Exact Name of Registrant as Specified in Charter)
_______________600 Fifth Avenue, 26th Floor New York, New York 10020________
(Address of Principal Executive Offices) (Zip Code)
___________________________(212) 332-5211_______________________________
(Registrant's Telephone Number, Including Area Code)
William E. Vastardis, ________
Harding, Loevner Funds, Inc.
600 Fifth Avenue, 26th Floor
New York, New York 10020
(Name and Address of Agent for Service of Process)
Copies to: William Goodwin, Esq.
Dechert Price & Rhoads
477 Madison Avenue
New York, New York 10022
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement becomes effective.
It is proposed that this filing will become effective thirty days after filing
pursuant to paragraph (a) of Rule 488.
The Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) under the Investment Company
Act of 1940; accordingly no fee is payable herewith.
HARDING, LOEVNER FUNDS, INC.
FORM N-14
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Letters to Shareholders
Notice of Special Meeting
PART A
Combined Prospectus/Proxy Statement
PART B
Statement of Additional Information
PART C
Other Information
Signatures
Exhibit
HARDING, LOEVNER FUNDS, INC.
REGISTRATION STATEMENT OF FORM N-14
CROSS REFERENCE SHEET
N-14 Location in
Item No. Registration Statement
Part A: Information Required In
Prospectus/Proxy Statement
1. Beginning of Registration
Statement and Outside Front
Cover Page of Prospectus Cover Page; Cross Reference Sheet
2. Beginning and Outside Back
Cover Page of Prospectus Table of Contents
3. Synopsis Information and Risk
Factors Synopsis; Principal Risk Factors
4. Information About the
Transaction Synopsis; Proposal 1 and Comparative
Expense Table
5. Information About the Registrant
Synopsis; Principal Risk Factors;
Additional Information About Harding,
Loevner Funds, Inc. and Its Shares;
Preliminary Statement of Additional
Information; Miscellaneous;
Preliminary Prospectus of the shares
of International Equity Portfolio, a
portfolio of Harding, Loevner Funds, Inc.
6. Information About the Company
Being Acquired Synopsis; Principal Risk Factors;
Additional Information About AMT
Capital Fund, Inc. and Its Shares;
Miscellaneous; Current Prospectus of
HLM International Equity Portfolio, a
portfolio of AMT Capital Fund, Inc.
7. Voting Information Introduction and Voting Information;
Synopsis
8. Interest of Certain Persons
and Experts Introduction and Voting Information:
Proposal 1 The Plan of Reorganization
9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters Not Applicable
Part B: Information Required In
Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
N-14
Item No. Location in
Registration Statement
12. Additional Information About
the Registrant Preliminary Statement of Additional
Information of The shares of
International Equity Portfolio, a
portfolio of the Harding, Loevner
Funds, Inc.
13. Additional Information About
the Company Being Acquired Current Statement of Additional
Information of HLM International
Equity Portfolio, a series of AMT
Capital Fund, Inc.
14. Financial Statements Current Annual Report of AMT
Capital Fund, Inc.
Part C. Other Information
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
HLM International Equity Portfolio __________, 1996
A Series of
AMT Capital Fund, Inc.
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of the
HLM International Equity Portfolio (the "Current Portfolio"), an investment
portfolio of AMT Capital Fund, Inc. ("AMT Fund"), to be held on _________,
1996 at 10:00 a.m. Eastern time at the offices of AMT Fund on the 26th floor,
located at 600 Fifth Avenue, New York, New York 10020.
At this meeting, shareholders will be asked to consider and take action on the
proposed reorganization (the "Reorganization") of the Current Portfolio as the
shares of the newly-formed International Equity Portfolio ("Successor
Portfolio") of Harding, Loevner Funds, Inc. ("HL Fund"). The formal Notice of
Special Meeting of the Shareholders and the Proxy Statement setting forth in
detail the matters to come before the meeting are attached, and a Proxy Card
is enclosed for you to complete and facsimile, telephone, or return in the
pre-addressed, postage-paid envelope provided.
IT IS IMPORTANT THAT YOU RETURN THE PROXY WHETHER OR NOT
YOU PLAN TO ATTEND THIS MEETING.
The proposed Reorganization provides that each shareholder of the Current
Portfolio will receive a number of shares of common stock in the Successor
Portfolio equal to the number of shares in the Current Portfolio each such
shareholder held. Also, as a part of the Reorganization, the Current
Portfolio will transfer all of its assets to the Successor Portfolio. The
investment objective, policies, restrictions, risk factors, and investment
approach of the Successor Portfolio are substantially similar to those of the
Current Portfolio. The new Investment Advisory Agreement is substantially
similar to the current Investment Advisory Agreement.
Harding, Loevner Management, L.P. ("HLM"), the investment adviser responsible
for the day-to-day investment management of the Current Portfolio, will serve
as investment adviser of the Successor Portfolio in which HLM will have the
same investment management discretion and decision-making authority over the
Successor Portfolio as it exercised over the Current Portfolio. AMT Capital
Services, Inc. will serve as administrator and distributor to the Successor
Portfolio.
The Board of Directors of AMT Fund believes that the proposed Reorganization
is in the best interests of the shareholders. The Reorganization will allow
Current Portfolio shareholders to continue to receive the same investment
management services of HLM. The investment advisory fee to be paid by the
Successor Portfolio will be the same as that currently paid by the Current
Portfolio, and until further notice from HLM, the total expense ratio of the
Successor Portfolio will not exceed the total expense ratio of the Current
Portfolio during its last fiscal year.
At its meeting on May 30,1996, the Board of Directors approved the proposed
Reorganization.
Again, whether or not you expect to attend the meeting, it is important that
your shares be represented. Therefore, we urge you to vote FOR each of the
proposals contained in the Combined Prospectus/Proxy Statement.
Sincerely,
Alan M. Trager
President
HLM INTERNATIONAL EQUITY PORTFOLIO
A Series of
AMT CAPITAL FUND, INC.
- -------------------------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on ______, 1996
- -------------------------------------------------------------------------------
A Special Meeting (the "Meeting") of the Shareholders of HLM International
Equity Portfolio (the "Current Portfolio"), a series of AMT Capital Fund,
Inc., a Maryland corporation ("AMT Fund"), will be held on ________, 1996, at
10:00 a.m. Eastern time at the offices of AMT Fund on the 26th floor, located
at 600 Fifth Avenue New York, New York 10020, or at such adjourned time as may
be necessary for the holders of a majority of Current Portfolio's outstanding
shares to vote for the following purposes:
(1) To approve the proposed Agreement and Plan of Reorganization by and
between AMT Fund, on behalf of its Current Portfolio, and Harding, Loevner
Funds, Inc. ("HL Fund"), on behalf of its International Equity Portfolio (the
"Successor Portfolio"), providing for the transfer of all of the assets,
subject to all of the liabilities, of Current Portfolio in exchange for shares
of the Successor Portfolio (the "Successor Shares"), and the distribution of
such Successor Shares to the shareholders of Current Portfolio in complete
liquidation of Current Portfolio, as more fully described in the accompanying
Combined Prospectus/Proxy Statement; and
(2) To consider and act upon any other matters that may properly come before
the meeting and any adjournments thereof.
The Agreement and Plan of Reorganization, the transactions contemplated
thereby and related matters are described in the attached Combined
Prospectus/Proxy Statement. A copy of the Agreement and Plan of
Reorganization is attached as Appendix A to this Combined Prospectus/Proxy
Statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE PROPOSAL
Only shareholders of record as of the close of business on ________________
will be entitled to vote at the meeting and any adjournments thereof.
YOUR COOPERATION IN PROMPTLY COMPLETING, SIGNING, FAXING, TELEPHONING, OR
RETURNING THE ENCLOSED PROXY WILL BE APPRECIATED.
By order of the Board of Directors,
Alan M. Trager
President
Place: 600 Fifth Avenue, 26th Floor, New York, New York 10020
Date: ___________, 1996
IMPORTANT: We urge you to sign, date and facsimile, telephone, or return your
proxy in the enclosed envelope which requires no postage and is intended for
your convenience. If you attend the meeting, you may vote your shares in
person.
HLM INTERNATIONAL EQUITY PORTFOLIO
A Series of
AMT CAPITAL FUND, INC.
600 Fifth Avenue, 26th Floor
New York, New York 10020
(212) 332-5211
HARDING, LOEVNER FUNDS, INC.
600 Fifth Avenue, 26th Floor
New York, New York 10020
(212) 332-5211
COMBINED PROSPECTUS/PROXY STATEMENT
____________________________
SOLICITATION OF PROXIES
This Combined Prospectus/Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of AMT Capital Fund, Inc.
(the "AMT Fund") to be voted at a Special Meeting of Shareholders of the HLM
International Equity Portfolio (the "Current Portfolio") to be held on
_________, 1996 at 10:00 a.m. Eastern time, at the offices of AMT Capital
Fund, Inc. on the 26th floor, located at 600 Fifth Avenue, New York, New York
10020, at any adjournment(s) thereof (the "Meeting").
The purpose of the Meeting is to consider an Agreement and Plan of
Reorganization (the "Reorganization Plan") among the AMT Fund, on behalf of
the Current Portfolio, an investment portfolio of AMT Fund, and Harding,
Loevner Funds, Inc. (the "HL Fund"), on behalf of the newly-formed
International Equity Portfolio (the "Successor Portfolio"), an investment
portfolio of HL Fund, that would effect the reorganization of the Current
Portfolio into the Successor Portfolio and certain transactions and other
actions contemplated thereby, as described below (the "Reorganization" or
"Proposal 1"). Pursuant to the Reorganization Plan, which has been approved
by the Board of Directors of AMT Fund, all of the assets of the Current
Portfolio would be acquired by the Successor Portfolio in exchange for shares
of common stock (the "Successor Shares") in the Successor Portfolio and the
assumption by Successor Portfolio of all of the liabilities of the Current
Portfolio. Such Successor Shares then would be distributed to Current
Portfolio shareholders at the rate of one IEP Share (or fraction thereof) for
each share (or fraction thereof) of common stock in the Current Portfolio. As
a result of the proposed transactions, each shareholder of the Current
Portfolio would receive a number of full or fractional Successor Shares equal
to the number of Current Portfolio shares owned by such Current Portfolio
shareholder at the time of the Reorganization. Such Successor Shares would
have an aggregate net asset value on the effective date of the Reorganization
equal to the aggregate net asset value of the Current Portfolio shares. A
copy of the form of the Reorganization Plan is set forth in Appendix A to this
Combined Prospectus/Proxy Statement.
AMT Fund and HL Fund are both open-end, diversified investment companies
(i.e., mutual funds) incorporated in the state of Maryland. The investment
policies and restrictions of the Successor Portfolio are substantially similar
to those of the Current Portfolio. Each of the Current Portfolio and
Successor Portfolio has the investment objective of seeking long-term capital
appreciation through investments in equity securities of companies based
outside the United States.
This Combined Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about Successor Portfolio, HL
Fund, Current Portfolio and AMT Fund, and the transactions contemplated by the
proposed Reorganization Plan, that an investor should know before voting on
the proposed Reorganization Plan. A copy of the preliminary prospectus of the
Successor Portfolio, dated _____________, is included with this Combined
Prospectus/Proxy Statement and is incorporated by reference herein.
A preliminary statement of additional information regarding the Successor
Portfolio, dated _____________, has been filed with the Securities and
Exchange Commission (the "Commission"). Copies of this document may be
obtained without charge by contacting AMT Capital Services, Inc. located at
600 Fifth Avenue, 26th Floor New York, New York 10020 or by telephoning AMT
Capital Services, Inc. at 1-800-762-4848.
The current prospectus and statement of additional information regarding the
Current Portfolio, each dated __________, 1996, are incorporated by reference
herein. A copy of the current prospectus of the Current Portfolio and a copy
of the current statement of additional information of the Current Portfolio
each may be obtained without charge by contacting AMT Capital Services, Inc.
located at 600 Fifth Avenue, 26th Floor New York, New York 10020 or by
telephoning AMT Capital Services, Inc. at 1-800-762-4848.
A statement of additional information, dated ____________ relating to the
proposed transactions and other actions described in this Combined
Prospectus/Proxy Statement, including historical financial statements, has
been filed with the Commission and is incorporated by reference herein.
Copies of this statement of additional information may be obtained without
charge by contacting AMT Capital Services, Inc. located at 600 Fifth Avenue,
26th Floor New York, New York 10020 or by telephoning AMT Capital Services,
Inc. at 1-800-762-4848.
_______________________
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.
__________________________
The date of this Combined Prospectus/Proxy Statement is __________, 1996.
COMBINED PROSPECTUS/PROXY STATEMENT
TABLE OF CONTENTS
Page
Introduction and Voting Information
Special Meeting: Voting of Proxies; Adjournment
Synopsis
Proposal 1- Approval of the Proposed Agreement and Plan of Reorganization
and the Transactions Contemplated Thereby.
The Proposed Reorganization
Costs and Expenses of the Reorganization
Continuation of Shareholder Accounts
Forms of Organization of AMT Fund and HL Fund
Operation of the Successor Portfolio Following the Reorganization
Purchases of Successor Shares
Redemptions
Exchanges
Dividends and Distributions
Advisory and Distribution Fees and Expenses
Investment Objective and Policies
Federal Income Tax Consequences of the Proposed Reorganization
Principal Risk Factors
Proposal 1- Approval of the Proposed Agreement and Plan of Reorganization
and the Transactions Contemplated Thereby.
Reasons for the Proposed Reorganization
Continuity of Portfolio Management
Constant Investment Advisory Fees
Comparative Expense Table
Federal Income Tax Consequences of the Proposed Reorganization
Pro Forma Capitalization and Ratios
Summation
Description of HL Fund and the Successor Portfolio
Description of Investment Adviser
Description of Administrator
Description of Distributor and Distribution Arrangements
Comparative Information on Shareholder Rights
General
Shares
Management of the Affairs of HL Fund
Shareholder Meetings
Liability and Indemnification of Directors and Officers
Removal of Directors
Comparative Information on Investment Advisory Agreements
Additional Information about Harding, Loevner Funds, Inc. and the International
Equity Portfolio
Additional Information About AMT Capital Fund, Inc. and the HLM International
Equity Portfolio
Miscellaneous
Available Information
Legal Matters
Financial Statements and Experts
Other Business
Proposals for Future Meetings
Part B
Statement of Additional Information for the International Equity Portfolio
Statement of Additional Information Table of Contents
Part C. Other Information
Indemnification
Exhibits
Signatures
Index to Exhibits Included in Part C
Appendix A: Agreement and Plan of Reorganization
HLM INTERNATIONAL EQUITY PORTFOLIO
A Series of
AMT CAPITAL FUND, INC.
600 Fifth Avenue, 26th Floor
New York, New York 10020
COMBINED PROSPECTUS/PROXY STATEMENT
Special Meeting of Shareholders to be
held on ________, 1996.
_________________________
INTRODUCTION AND VOTING INFORMATION
- --------------------------------------------------------------------------------
Special Meeting: Voting of Proxies: Adjournment
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of the Current Portfolio in connection with the solicitation by
the Board of Directors of AMT Fund of proxies to be voted at a Special Meeting
of Shareholders of the Current Portfolio to be held on _________, 1996 at
10:00 a.m. Eastern time, at the offices of AMT Fund on the 26th floor, located
at 600 Fifth Avenue, New York, New York 10020 and at any adjournment(s)
thereof. The purpose of the Meeting is to approve or disapprove the
Reorganization Plan by and between AMT Fund, on behalf of the Current
Portfolio, and HL Fund, on behalf of the newly-formed Successor Portfolio,
providing for the transfer of all of the assets, subject to all of the
liabilities, of Current Portfolio to the Successor Portfolio in exchange for
Successor Shares, and the distribution of such Successor Shares to the
shareholders of Current Portfolio in complete liquidation of the Current
Portfolio, as fully described hereafter in this Combined Prospectus/Proxy
Statement; and to consider and act upon any other matters that may properly
come before the meeting and any adjournments thereof.
Record holders of shares of common stock of the Current Portfolio at the close
of business on ________, 1996, the record date, will be entitled to one vote
per share and proportionate fractional votes for fractional shares on all
business to be presented at the Meeting. On the record date, _____________
shares of common stock of the Current Portfolio were outstanding and entitled
to be voted at the meeting. As of the record date there were ___ 5%
beneficial shareholders.
The enclosed form of proxy, if properly executed and returned, will be voted
in accordance with the choices specified thereon. Shareholders may telephone,
mail, facsimile or use other similar communication methods to vote their
shares. If no choice is specified with respect to a proposal, the proxy will
be voted in favor of the proposal being considered, and, in the discretion of
the proxies named in the proxy card, on any other matter properly brought
before the Meeting. The representation in person or by proxy of a majority of
the outstanding shares of Current Portfolio is necessary to constitute a
quorum for voting on the proposals herein. If a quorum is present at the
meeting, the approval of the Reorganization Plan will require the affirmative
vote of at least a majority of the outstanding shares of the Current
Portfolio. In the event that a quorum is present at the meeting but
sufficient votes to approve a proposal are not received, or if a quorum is not
present, an affirmative vote of the majority of shares represented at the
meeting for adjournment will cause the meeting to be adjourned to permit the
further solicitation of proxies. Such solicitation may be made by mail,
telephone, facsimile and other similar means. Such solicitations may be
conducted by, among others, officers and employees of the Fund, AMT Capital
Services, Inc. and Harding, Loevner Management, L.P. ("HLM") (collectively
referred to as the "Solicitors"). The cost of such solicitation, if any, will
be nominal.
As the meeting date approaches, certain shareholders of the Current Portfolio
may receive calls from the Solicitors if the AMT Fund has not yet received
their votes. Authorization to permit the Solicitors to execute proxies may be
obtained by telephonic or electronically transmitted instructions from
shareholders of the Current Portfolio. Proxies that are obtained
telephonically will be recorded in accordance with the procedures set forth
below. Management of the AMT Fund believes that these procedures are
reasonable designed to ensure that the identity of the shareholders casting
the vote is accurately determined and the voting instructions of the
shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the Solicitors are
required to ask the shareholder for such shareholder's full name, address,
social security or employer identification number, title (if the person giving
the proxy is authorized to act on behalf of an entity, such as the
corporation), the number of shares owned and to confirm that the shareholder
has received the Proxy Statement in the mail. If the information solicited
agrees with the information provided to the Solicitors by the AMT Fund, the
Solicitors have the responsibility to explain the process, read the proposals
listed on the proxy card, and ask for the shareholder's instructions on each
proposal. The Solicitors, although he or she is permitted to answer questions
about the process, is not permitted to recommend to the shareholder how to
vote, other than read any recommendations set forth in the proxy statement.
The Solicitors will record the shareholder's instructions on the card. Within
72 hours, the Solicitors will send the shareholder a letter or mailgram to
confirm the shareholder's vote and asking the shareholder to call the
Socilitors immediately if the shareholder's instructions are not correctly
reflected in the confirmation.
If a shareholder wishes to participate in the Special Meeting of Shareholders,
but does not wish to give a proxy by telephone, such shareholder may still
submit the proxy card originally sent with the Proxy Statement or attend in
person. Any proxy given by a shareholder, whether in writing or by telephone,
is revocable. A shareholder may revoke the accompanying proxy or a proxy
given telephonically at any time prior to its use by filing with the AMT Fund
a written revocation or duly executed proxy bearing a later date. In
addition, any shareholder who attends the Meeting in person may vote by ballot
at the Meeting, thereby canceling any proxy previously given.
For purposes of establishing a quorum, abstentions and broker non-votes will
be treated as shares that are present. Broker "non-votes" are proxies
received by the Current Portfolio from brokers or nominees when the broker or
nominee has neither received instructions from the beneficial owner or other
persons entitled to vote on a particular matter. Abstentions and broker "non-
votes" are equivalent to a vote against the proposals.
The Reorganization Plan provides that the expenses of the Reorganization
including the costs and expenses incurred in the preparation and mailing of
the notice, this Combined Prospectus/Proxy Statement and the proxy, and
solicitation of proxies and the legal expenses of the Reorganization will be
borne by HLM.
The enclosed proxy is revocable by you at any time prior to the exercise
thereof by submitting a written notice of revocation or subsequently executed
proxy. Signing, faxing, voting by telephone or mailing the proxy will not
affect your right to give a later proxy or to attend the Meeting and vote your
shares in person.
This Proxy Statement, the Notice of Special Meeting of Shareholders and the
form of proxy are being first mailed to shareholders on or about
_____________, 1996.
The Board of Directors of AMT Fund has unanimously approved, and recommends
that shareholders vote FOR, Proposal 1, Approval of the Agreement and Plan of
Reorganization and the transactions contemplated thereby described below.
SYNOPSIS
The following is a summary of certain information contained elsewhere in this
Combined Prospectus/Proxy Statement, the prospectuses of AMT Fund and HL Fund,
and the Reorganization Plan. AMT Fund shareholders should read this entire
Combined Prospectus/Proxy Statement carefully.
PROPOSAL 1:
APPROVAL OF THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION AND THE
TRANSACTIONS CONTEMPLATED THEREBY.
The Proposed Reorganization
Current Portfolio shareholders will be asked at the Meeting to vote upon and
approve the Reorganization Plan. The Reorganization Plan is set forth in
Appendix A to this Combined Prospectus/Proxy Statement. Pursuant to the
Reorganization Plan, the Current Portfolio, a series of AMT Fund, would
effectively be reorganized into the shares of the newly-formed Successor
Portfolio, a series of HL Fund. The Reorganization Plan sets forth the terms
and conditions under which the proposed transactions contemplated by the
Reorganization are to be consummated. The Board of Directors of AMT Fund,
including the "non-interested persons" of AMT Fund, as that term is defined in
Section 2(a)(19) of the 1940 Act (the "AMT Fund Independent Directors"), and
the Board of Directors of HL Fund including the "non-interested persons" of HL
Fund, as that term is defined in Section 2 (a)(19) of the 1940 Act (the "HL
Fund Independent Directors"), have unanimously approved the Reorganization Plan.
The consummation of the transactions contemplated by the proposed
Reorganization is subject to a number of conditions set forth in the
Reorganization Plan, some of which conditions may be waived by AMT Fund (see
"The Proposed Reorganization-- Agreement and Plan of Reorganization" under
Proposal 1 below). Among the significant conditions (which may not be waived)
are (i) the receipt by AMT Fund and HL Fund of an opinion of counsel as to
certain Federal income tax aspects of the Reorganization (see "The Proposed
Reorganization--Federal Income Tax Consequences of the Proposed
Reorganization" under Proposal 1, below) and (ii) the approval of the
Reorganization Plan by the affirmative vote of the holders of at least a
Majority of the outstanding shares of the Current Portfolio. The
Reorganization Plan provides for the acquisition of all of the assets of the
Current Portfolio by the Successor Portfolio in exchange for Successor Shares
and the assumption by Successor Portfolio of all of the liabilities of the
Current Portfolio. The Successor Shares then would be distributed to the
Current Portfolio shareholders at a rate of one IEP Share (or fraction
thereof) for each Current Portfolio share (or fraction thereof) held. The
aggregate net asset value of a IEP Share received by an Current Portfolio
shareholder would be equal to the aggregate net asset value of a share of the
Current Portfolio immediately prior to the closing of the Reorganization. The
Reorganization is anticipated to occur on __________, 1996, or such later date
as the parties may agree (the "Reorganization Closing Date").
For the reasons set forth below under "The Proposed Reorganization--Reasons
for the Proposed Reorganization" under "Proposal 1", AMT Fund's Board,
including all of the Independent Directors, has unanimously concluded that the
Reorganization would be in the best interest of the Current Portfolio and its
shareholders and that the interests of the existing Current Portfolio
shareholders would not be diluted as a result of the transactions contemplated
by the Reorganization. AMT Fund's Board, therefore, has submitted the
Reorganization Plan effecting the Reorganization for approval by the Current
Portfolio shareholders at the Meeting, and recommends the approval of the
Reorganization Plan.
Costs and Expenses of the Reorganization
The Reorganization Plan provides that HLM will bear all the costs and expenses
of the Reorganization of the Current Portfolio, including professional fees
and the costs of the Meeting, such as the costs and expenses incurred in the
preparation and mailing of the notice, this Combined Prospectus/Proxy
Statement, and the solicitation of proxies, which may include reimbursement to
broker-dealers and others who forward proxy materials to their clients. Such
costs and expenses to be paid by HLM will not result in an increase in
management or distribution fees payable by the Current Portfolio or the
Successor Portfolio (see "Advisory and Distribution Fees and Expenses" below).
Continuation of Shareholder Accounts
As a result of the proposed transactions contemplated by the Reorganization,
each Current Portfolio shareholder will cease to be a shareholder of the
Current Portfolio and, as described below, will receive Successor Shares at
the rate of one IEP Share (or fraction thereof) for each Current Portfolio
share (or fraction thereof) held on the Reorganization Closing Date, and the
Successor Shares will have an aggregate net asset value equal to the aggregate
net asset value of such shareholder's Current Portfolio shares as of the close
of business on the Reorganization Closing Date.
The Successor Portfolio will establish accounts for all Current Portfolio
shareholders containing the appropriate number of Successor Shares. Receipt
of Successor Shares by an Current Portfolio shareholder will be deemed to
authorize the Successor Portfolio and its agents to establish for the Current
Portfolio shareholder, with respect to the Successor Portfolio, all of the
same (i) account options, including telephone redemptions, if any, (ii)
dividend and distribution options, and (iii) options for payment that Current
Portfolio shareholders had elected previously with respect to the Current
Portfolio. Similarly, no further action will be necessary in order to
continue any retirement plan currently maintained by a Current Portfolio
shareholder, with respect to Successor Shares.
No fees will be imposed in connection with the issuance of Successor Shares to
the Current Portfolio shareholders pursuant to the Reorganization.
Forms of Organization of AMT Fund and HL Fund
Current Portfolio is an investment portfolio of AMT Fund, a Maryland
corporation and an open-end management investment company registered under the
1940 Act. The operations of AMT Fund and the Current Portfolio are governed
by the Articles of Incorporation and the By-Laws of AMT Fund, and by Maryland
Law, as applicable.
The Successor Portfolio is a series of HL Fund, a Maryland corporation
organized on July 31, 1996, and an open-end management investment company
registered under the 1940 Act. In addition, HL Fund has three other series:
the Global Equity Portfolio, the Emerging Markets Portfolio, and the Multi-
Asset Global Portfolio. The operations of the HL Fund and of the Successor
Portfolio are governed by the Articles of Incorporation and the By-Laws of HL
Fund, and by Maryland Law, as applicable.
The AMT Fund (including the Current Portfolio) and HL Fund (including the
Successor Portfolio) are also subject to the provisions of the 1940 Act, and
the rules and regulations of the Securities and Exchange Commission (the
"Commission") thereunder.
Operation of the Successor Portfolio Following the Reorganization
Upon consummation of the Reorganization, Successor Portfolio will operate in a
manner that is substantially similar to the current operation of the Current
Portfolio. The Successor Portfolio will be governed by the Board of Directors
and officers of HL Fund. Background information with respect to HL Fund's
directors and officers is set forth in Successor Portfolio's statement of
additional information, which is available upon request from AMT Capital
Services. The responsibilities, powers, and fiduciary duties of the directors
of HL Fund are substantially similar to those of the directors of AMT Fund.
HL Fund's directors supervise the business affairs and investments of the
Successor Portfolio, which will be managed on a daily basis by HLM who will
have the same investment management discretion and decision-making authority
over the new Successor Portfolio as it exercised over the Current Portfolio.
AMT Capital Services Inc. ("AMT Capital Services") will serve as administrator
and distributor to the Successor Portfolio. The investment objective,
policies, and restrictions of the Successor Portfolio will be substantially
similar to those of the Current Portfolio.
Purchases of Successor Shares
The Successor Shares have rights that are substantially similar to the shares
currently offered by Current Portfolio. For information regarding the terms
under which shares of the Successor Portfolio are offered and applicable
distribution charges, see "Purchase of Shares" in the preliminary prospectus
of the Successor Portfolio.
The Successor Portfolio will have AMT Capital Services serve as the
distributor pursuant to a Distribution Agreement (the "Distribution
Agreement") with HL Fund. The Distribution Agreement between HL Fund and AMT
Capital Services is substantially similar to the distribution agreement
between AMT Capital Services and the AMT Fund.
Redemptions
Successor Portfolio offers the same redemption rights and privileges currently
offered by the Current Portfolio, and such rights and privileges are subject
to the same restrictions and procedures currently prescribed by the Current
Portfolio. For information regarding redemption of Successor Portfolio shares,
see "Redemption of Shares" in the preliminary prospectus of the Successor
Portfolio.
Exchanges
Shares of the Successor Portfolio may be exchanged for shares of another
portfolio in the HL Fund based on the respective net asset values of the shares
involved in the exchange, assuming that shareholders wishing to exchange shares
reside in states where these mutual funds are qualified for sale. The IEP's
Portfolio minimum amounts of $100,000 would still apply. An exchange order is
treated the same as a redemption followed by a purchase.
Dividends and Distributions
The Successor Portfolio, similar to the Current Portfolio, will declare and pay
a dividend from its net investment income on an annual basis. The Successor
Portfolio will distribute its realized net short-term capital gains (i.e. with
respect to assets held one year or less) and net long-term capital gains (i.e.
with respect to assets held more than one year) at least annually by
automatically reinvesting (unless a shareholder has elected to receive cash)
such short-term or long-term capital gains in additional shares of the
Successor Portfolio at the net asset value on the ex-date of the distribution.
Advisory and Distribution Fees and Expenses
HLM, the current investment adviser to the Current Portfolio, will serve as
investment adviser to the Successor Portfolio, subject to the approval of the
Reorganization by Current Portfolio shareholders. HLM's current Investment
Advisory Agreement with the Current Portfolio is substantially similar to
HLM's Investment Advisory Agreement with the Successor Portfolio.
As described below under Proposal 1, the respective terms of the new
Investment Advisory Agreement and Distribution Agreement with respect to the
Successor Portfolio are substantially similar to those of the current
Investment Advisory Agreement and current Distribution Agreement for the
Current Portfolio. Accordingly, the aggregate contractual rates payable by
the Successor Portfolio for investment advisory services and distribution
services will remain the same under the new Investment Advisory Agreement and
Distribution Agreement, respectively.
Investment Objective and Policies
Upon consummation of the Reorganization, the investment objective, policies and
restrictions of the Successor Portfolio will be substantially similar to those
of the Current Portfolio. Accordingly, the objective of the Successor
Portfolio is to seek long-term capital appreciation through investments in
equity securities of companies based outside the United States. The investment
objective of the Successor Portfolio is a fundamental policy and may not be
changed without the approval of vote of at least a 1940 Act Majority of the
outstanding voting securities of the Successor Portfolio. As defined in the
Investment Act of 1940 (the "1940 Act"), the term "majority of the outstanding
voting securities" means the vote of the lesser of (i) 67% of the voting shares
of the Current Portfolio present in person or by proxy at a meeting where
more than 50% of the outstanding voting shares are present in person or by
proxy; or (ii) more than 50% of the outstanding voting shares of the Fund (a
"1940 Act Majority"). The investment objective, policies, and restrictions of
the Successor Portfolio and the investment risks are described under
"Investment Policies" in the preliminary prospectus of the Successor Portfolio
and under "Investment Restrictions" in the preliminary statement of additional
information of the Successor Portfolio.
Federal Income Tax Consequences of the Proposed Reorganization
The Successor Portfolio and the Current Portfolio will receive, as a condition
to the Reorganization, an opinion from Dechert Price & Rhoads, counsel to the
Successor Portfolio, to the effect that the proposed Reorganization will
constitute a tax-free reorganization within the meaning of Section 368(a) of
the U.S. Internal Revenue Code of 1986, as amended (the "Code"). Accordingly,
no gain or loss generally will be recognized by the Successor Portfolio, the
Current Portfolio or their respective shareholders. For additional
information regarding the federal income tax consequences of the Proposed
Reorganization, see "The Proposed Reorganization--Federal Income Tax
Considerations of the Proposed Reorganization" under Proposal 1, below.
PRINCIPAL RISK FACTORS
Because the investment objective, policies, and restrictions of the Successor
Portfolio are substantially similar to those of the Current Portfolio, the
risks associated with the particular investment policies and strategies that
the Successor Portfolio and the Current Portfolio are authorized to employ
also are substantially similar. Investment in the Successor Portfolio
involves risks not associated with investments in securities issued by United
States entities and there is no assurance that the Successor Portfolio will
achieve its investment objective. For additional information regarding the
principal risk factors of investing in the Successor Portfolio, see "Risks
Associated with the Fund's Investment Policies and Investment Techniques" in
the preliminary prospectus of the Successor Portfolio.
PROPOSAL 1
APPROVAL OF THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION AND THE
TRANSACTIONS CONTEMPLATED THEREBY.
On May 30, 1996, the Board of Directors of AMT Fund, including all of the
Independent Directors, approved the Reorganization Plan, subject to approval
by the shareholders of Current Portfolio. The Reorganization Plan provides
for (a) the transfer of all of the assets and liabilities of the Current
Portfolio to the Successor Portfolio, subject to all of the liabilities of
Successor Shares, in exchange solely for Successor Shares, and (b) the
distribution by the Current Portfolio to its shareholders of Successor Shares
in complete liquidation of the Current Portfolio.
As a result of the Reorganization, each shareholder of the Current Portfolio
will become a shareholder of the Successor Portfolio and will hold, immediately
after the Reorganization Closing Date, the same number of Successor Shares that
such shareholder held in the Current Portfolio immediately before the
Reorganization Closing Date. The investment objective, policies, restrictions,
risk factors, and investment approach of the Successor Portfolio will be
substantially similar to those of the Current Portfolio. The terms of the new
Investment Advisory Agreement are substantially similar to the current
Investment Advisory Agreement. Under the new Investment Advisory Agreement,
HLM will serve as investment adviser of the Successor Portfolio and will have
the same investment management discretion and decision-making authority over
the Successor Portfolio as it currently exercises over the Current Portfolio.
HL Fund is a registered investment company, organized as a corporation under
the laws of Maryland in 1996, with its principal place of business at 600
Fifth Avenue, 26th floor, New York, New York 10020. HL Fund offers four
portfolios, the Successor Portfolio, the Emerging Markets Portfolio, the
Global Equity Portfolio, and the Multi-Asset Global Portfolio, of which only
the Successor Portfolio is involved in the Reorganization. In the event that
shareholders of Current Portfolio do not approve the Reorganization Plan, the
Directors of AMT Fund will consider the alternatives available to them.
A copy of the Reorganization Plan is attached to this Combined
Prospectus/Proxy Statement as Appendix A, and the description of the
Reorganization Plan herein is qualified in its entirety by reference to
Appendix A.
Reasons for the Proposed Reorganization
Continuity of Investment Management. HLM has served as investment adviser to
Current Portfolio (and sub-adviser when the Current Portfolio was formerly the
International Equity Portfolio of AMT Fund) since its inception in May, 1994,
and has been primarily responsible for the day-to-day investment management of
the Current Portfolio and thus responsible for its current track record.
In light of the recent decision by the Directors of the AMT Fund to seek
alternative investment opportunities for its current shareholders, the
Reorganization allows current shareholders to continue to access the
investment management expertise of HLM. Consequently, the transition of HLM
from advising the Current Portfolio to advising the Successor Portfolio will
be uninterrupted.
Constant Investment Advisory Fees. Under the current Investment Advisory
Agreement between AMT Fund and HLM, the Current Portfolio pays HLM a monthly
fee at the annual rate of 0.75% of the average daily net assets of the Current
Portfolio. Under the new Investment Advisory Agreement between HL Fund and HLM
the Successor Portfolio will pay HLM a monthly fee at the annual rate of 0.75%
of the average daily net assets of the Successor Portfolio.
HLM has voluntarily agreed to reimburse the Current Portfolio for "Total Fund
Operating Expenses," in excess of 1.00% of its average net assets. HLM has
similarly voluntarily agreed to reimburse the Successor Portfolio for "Total
Fund Operating Expenses," in excess of 1.00% of its average net assets. As a
result and until further notice from HLM, the total expense ratio of the
Successor Portfolio will not be greater than that of the Current Portfolio for
its most recent fiscal year.
The following table and example provide a comparison of the annual operating
expenses (as a percentage of average net assets) the Current Portfolio
currently pays and the estimated amounts the Successor Portfolio would pay
following consummation of the Reorganization:
Comparative Expense Table
Annual Fund Operating Expenses
Current Portfolio Successor Portfolio
Existing Expense Estimated Expense
Investment Advisory Fees 0.7 0.75% 0.75%
Other Expenses-
including Administration Fees
(after reimbursement) 0.25% (a) 0.25% (a)
Total Operating Expenses (after
reimbursement) 1.00% (a) 1.00% (a)
(a) This amount reflects voluntary expense reimbursements as explained
hereinafter. Absent these voluntary expense reimbursements, the ratio of
"Other Expenses" to average net assets would have been 1.12% for the
Current Portfolio (of which 0.30% is "other expenses"), and is estimated to
be 1.12% for the Successor Portfolio.
Example
You would pay the following expenses on a $1,000 investment in each of the
Current Portfolio and the Successor Portfolio, assuming (1) 5% annual return
and (2) redemption at the end of each time period.
1 Year 3 Years 5 Years 10 Years
Current Portfolio $10 $32 $55 $122
Successor Portfolio $10 $32 $55 $122
These examples should not be considered a representation of future expenses or
performance. Actual operating expenses and annual returns may be greater or
less than those shown.
Federal Income Tax Consequences of the Proposed Reorganization. The Current
Portfolio and AMT Fund will receive, as a condition to the Reorganization, an
opinion from Dechert Price & Rhoads, counsel to the Successor Portfolio, to
the effect that, based on the facts, assumptions and representations of the
parties, for federal income tax purposes: (i) the acquisition by the
Successor Portfolio of substantially all of the assets of the Current
Portfolio in exchange solely for Successor Shares and the assumption by the
Successor Portfolio of the liabilities of the Current Portfolio, followed by
the distribution of such Successor Shares to the Current Portfolio
shareholders in exchange for their shares of the Current Portfolio in complete
liquidation of the Current Portfolio, will constitute a "reorganization"
within the meaning of Section 368(a) of the U.S. Internal Revenue Code of
1986, as amended (the "Code"), and the Successor Portfolio and the Current
Portfolio will each be "a party to a reorganization" within the meaning of
Section 368(b) of the Code; (ii) no gain or loss will be recognized to the
Current Portfolio upon the transfer of substantially all of its assets to the
Successor Portfolio in exchange solely for Successor Shares and the assumption
by the Successor Portfolio of the liabilities of the Current Portfolio, or
upon the distribution to the target shareholders of such Successor Shares;
(iii) the basis of the assets of the Current Portfolio in the hands of the
Successor Portfolio will be, in each instance, the same as the basis of those
assets in the hands of the Current Portfolio immediately prior to the
Reorganization; (iv) the holding period of the assets of the Current Portfolio
in the hands of the Successor Portfolio will include the period during which
the assets were held by the Current Portfolio; (v) no gain or loss will be
recognized by the Successor Portfolio upon the receipt of the assets of the
Current Portfolio in exchange for Successor Shares; (vi) no gain or loss will
be recognized by the shareholders of the Current Portfolio upon the receipt of
Successor Shares solely in exchange for their shares of the Current Portfolio;
(vii) the basis of the Successor Shares received by the shareholders of the
Current Portfolio will be the same as the basis of the shares of the Current
Portfolio surrendered in exchange therefor; and (viii) the holding period of
the Successor Shares received by the shareholders of the Current Portfolio
will include the holding period of the shares of the Current Portfolio
surrendered in exchange therefore, provided that on the date of the exchange
the shares of the Current Portfolio were held as capital assets in the hands
of the shareholders of the Current Portfolio.
The foregoing is only intended to be a summary of the principal federal income
tax consequences of the Reorganization and should not be considered tax
advice. In addition, while it is believed that the foregoing is correct, it
is not certain that the U.S. Internal Revenue Service will agree with the
conclusions stated above. Shareholders of the Current Portfolio may wish to
consult their own tax advisers regarding the federal, state and local tax
consequences with respect to the foregoing matters and any other
considerations which may be applicable to the shareholders of the Current
Portfolio.
Pro Forma Capitalization and Ratios. The following table shows the
capitalization of the Current Portfolio and the Successor Portfolio separately
as of August 31, 1996 (unaudited), and combined in the aggregate on a pro
forma basis (unaudited), as of that date giving effect to the Reorganization:
Current Portfolio Successor Portfolio Pro Forma Combined
Net Assets: $ $0 $
NetAssetValue
("NAV")
Per Share: $ $0 $
Shares Outstanding 0
The following table shows the ratio of expenses to average net assets and the
ratio of net investment income to average net assets of the Current Portfolio
and the Successor Portfolio separately for the year ended August 31, 1996
(unaudited), and combined in the aggregate on a pro forma basis (unaudited),
as of that date, giving effect to the Reorganization:
Current Portfolio Successor Portfolio Pro Forma Combined
Ratio of
Expenses to
Average Net
Assets 1.00%(a) 0% 1.00%(a)
Ratio of Net
Investment
Income to
Average Net
Assets 0%
(a) This amount reflects voluntary expense reimbursements as explained
hereinafter. Absent these voluntary expense reimbursements, the ratio of
"Other Expenses" to average net assets would have been 1.12% for the
Current Portfolio (of which 0.30% is "other expenses"), and is estimated to
be 1.12% for the Successor Portfolio.
Summation. Based upon the foregoing, AMT Fund's Board of Directors has
determined that the Reorganization is in the best interests of the
shareholders of the Current Portfolio, and has determined further that the
interests of the shareholders will not be diluted as a result of the
Reorganization.
In reaching this conclusion, the Board of Directors of AMT Fund considered
many factors, including without limitation the following: the compatibility
of the investment objective, policies and restrictions of the Successor
Portfolio to the Current Portfolio; the advantages of continued access to
HLM's investment management skills; the capabilities and resources of the
other proposed service providers in the areas of administration, fund
accounting, transfer agency, custody, marketing and shareholder servicing, as
applicable; the expense ratios and available information regarding the fees
and expenses of the Current Portfolio and the Successor Portfolio as well as
similar funds; the terms and conditions of the Reorganization and whether the
Reorganization would result in a dilution of shareholder interests; costs to
be incurred by the Current Portfolio and the Successor Portfolio in connection
with the Reorganization; tax consequences of the Reorganization; the
commitment of HLM and its affiliates to maintain and enhance the business of
the Successor Portfolio for the benefit of shareholders of the Successor
Portfolio, including former shareholders of the Current Portfolio; and
possible alternatives to the Reorganization, including the liquidation of the
Current Portfolio.
Description of HL Fund and the Successor Portfolio
The HL Fund, an open-end registered investment company, was incorporated in
the state of Maryland on July 31, 1996. The HL Fund and the Successor
Portfolio were organized specifically for the purpose of effectuating the
Reorganization of the Current Portfolio. Prior to the Reorganization Closing
Date, the Successor Portfolio will have no assets (other than a nominal
investment by David R. Loevner, as the sole initial shareholder of the
Successor Portfolio) and no liabilities. The investment objective, policies,
restrictions, risk factors, and investment approach of Successor Portfolio
will be substantially similar to those of the Current Portfolio at the
Reorganization Closing Date. The Successor Portfolio will be advised by HLM.
AMT Capital Services will serve as the administrator and distributor to the
Successor Portfolio.
The manner in which Successor Shares are distributed and the distribution
system will be substantially similar for the Current Portfolio. In addition,
dividends on Successor Shares are anticipated to be declared and paid on the
same basis and at the same times as dividends are paid to shareholders of the
Current Portfolio. Further, all rights, privileges and obligations of
shareholders existing immediately prior to the reorganization are
substantially similar in all material respects to those which shareholders
will be entitled as shareholders of the Successor Portfolio.
Description of Investment Adviser
HLM, established in 1989, is a registered investment adviser that specializes
in global investment management for private investors and institutions. HLM
currently has approximately $1 billion in assets under management. HLM is
located at 50 Division Street, Suite 401, Somerville, NJ 08876. HLM manages
assets for several other registered investment companies.
Subject to the direction and authority of the Fund's Board of Directors, HLM
provides investment advisory services to the Current Portfolio pursuant to the
Investment Advisory Agreement dated June 13, 1995. Under the Investment
Advisory Agreement, HLM is responsible for providing investment research and
advice, determining which portfolio securities shall be purchased or sold by
the Current Portfolio, purchasing and selling securities on behalf of the
Current Portfolio and determining how voting and other rights with respect to
the portfolio securities of the Current Portfolio are exercised in accordance
with Current Portfolio's investment objective, policies, and restrictions. HLM
also provides office space, equipment, and personnel necessary to manage the
Current Portfolio.
HLM would provide such investment management services to the Successor
Portfolio as it currently provides to the Current Portfolio if Current
Portfolio shareholders vote to approve the Reorganization.
Description of Administrator
AMT Capital Services will serve as the administrator to the Successor
Portfolio pursuant to an Administration Agreement with HL Fund, on behalf of
the Successor Portfolio, which is substantially similar in all material
respects to the current Administration Agreement AMT Capital Services has with
the Current Portfolio.
AMT Capital Services will provide administrative services to, and assist in
managing and supervising all aspects of, the general day-to-day business
activities and operations of the Successor Portfolio other than investment
advisory activities, including oversight of custodial, transfer agency,
dividend disbursing, accounting, auditing, compliance and related services.
AMT Capital Services presently performs such administrative services as
administrator responsible for managing all aspects of the Current Portfolio's
operations. As administrator to the Current Portfolio, it focuses on
selecting, managing, and replacing, if necessary, the other service providers
to secure the best services at the best prices available on the market.
Founded in early 1992, AMT Capital Services is a registered broker-dealer
whose senior managers are former officers of Morgan Stanley and The Vanguard
Group, where they were responsible for the administration and distribution of
The Pierpont Funds, a $5 billion fund complex now owned by J.P. Morgan, and
the private label administration group of Vanguard, which administered over
$10 billion in assets in the aggregate for 45 portfolios.
Description of Distributor and Distribution Arrangements
AMT Capital Services will also serve as the distributor to the Successor
Portfolio under the Distribution Agreement with HL Fund. HL Fund's
Distribution Agreement relating to the Successor Shares is substantially
similar in all material respects to AMT Fund's Distribution Agreement
currently in place for the Current Portfolio.
Comparative Information on Shareholder Rights
General. AMT Fund and HL Fund are both Maryland corporations. AMT Fund is an
open-end registered investment company governed by its Articles of Incorporation
dated August 3, 1993, as amended and restated, its By-Laws and applicable
Maryland law. HL Fund is governed by its Articles of Incorporation dated July
31, 1996, its By-Laws, and applicable Maryland law. The business and affairs of
each of the Current Portfolio and the Successor Portfolio are managed under the
direction of their respective Boards of Directors.
Shares. The number of authorized shares of common stock of the AMT Fund and
the HL Fund are Two Billion Five Hundred Million (2,500,000,000). Under the
Articles of Incorporation of both the HL Fund and AMT Fund the Board of
Directors may, without shareholder approval, provide for the issuance of
additional sub-classes of Common Stock of a particular class or portfolio with
such preferences, conversions or other rights and characteristics as shall be
determined by resolution of the Board of Directors.
The distribution system for the Successor Shares will be substantially similar
to that currently in place for the HLM Shares.
Management of the Affairs of HL Fund. HL Fund and AMT Fund may suspend
redemptions in such manner as may be approved from time to time by or pursuant
to the discretion of the Board of Directors during any period (i) during which
the New York Stock Exchange is closed other than customary weekend and holiday
closing, (ii) during which trading on the New York Stock Exchange is
restricted, (iii) during which an emergency exists as a result of which
disposal by the applicable Fund of securities owned by such class is not
reasonably practicable or it is not reasonably practicable for the applicable
Fund fairly to determine the value for the net assets of such class, or (iv)
during any other period when the Securities and Exchange Commission (or any
succeeding governmental authority) may for the protection of security holders
of the applicable Fund by order permit suspension of the right of redemption or
postponement of the date of payment on redemption.
Shareholder Meetings. Neither AMT Fund nor HL Fund is required to hold annual
meetings of shareholders, but are required to hold meetings of shareholders
for purposes of voting on certain matters as required under the 1940 Act.
Liability and Indemnification of Directors and Officers. Both AMT Fund and HL
Fund provide for the indemnification of their directors and officers to the
full extent permitted by Maryland General Corporation Law.
The foregoing is only a summary of certain characteristics of the operations
of AMT Fund and HL Fund, their Articles of Incorporation, By-Laws and Maryland
law. The foregoing is not a complete description of the documents cited.
Shareholders should refer to the provisions of Maryland law directly for a
more thorough description.
Comparative Information on Investment Advisory Agreements
The duties and obligations of the investment adviser outlined under the current
and new Investment Advisory Agreements are substantially similar. The new
Investment Advisory Agreement was approved by the Board of Directors of the HL
Fund, including a majority of HL Fund's Independent Directors on ________, 1996
on behalf of the Successor Portfolio, and by the sole shareholder of the
Successor Portfolio on _______, 1996. The new Investment Advisory Agreement
will continue until ____________, 199_ and from year to year thereafter
provided that such continuance is specifically approved at least annually in
the same manner as the current Investment Advisory Agreement. The new
Investment Advisory Agreement, substantially similar to the current Investment
Advisory agreement, is terminable at any time without penalty by a majority of
HL Fund's Independent Directors or by vote of a majority of the outstanding
shares (as defined in the 1940 Act) of the Successor Portfolio on 60 days'
written notice to HLM and by HLM on 60 days' written notice to the HL Fund.
THE DIRECTORS, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMEND THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 1 AND ANY UNMARKED PROXIES WILL BE
SO VOTED.
Additional Information About International Equity Portfolio and the Harding,
Loevner Funds, Inc.
Additional information about International Equity Portfolio is included in the
preliminary prospectus of the HL Fund dated _________, 1996 (the "Successor
Portfolio Prospectus"). A copy of the Successor Portfolio prospectus has been
filed with the Securities and Exchange Commission (the "Commission") and is
enclosed herewith and is incorporated by reference. Additional copies may be
obtained without charge by contacting AMT Capital Services at 600 Fifth Avenue,
26th floor, New York, New York 10020 or by telephoning AMT Capital Services at
1-800-762-4848. A final copy of the prospectus of the International Equity
Portfolio will be provided to shareholders after it is filed with the
Commission. Further information about HL Fund is included in the preliminary
statement of additional information for the Successor Portfolio, dated
__________, 1996, which also has been filed with the Commission and may be
obtained without charge by contacting AMT Capital Services at 600 Fifth Avenue,
26th floor, New York, New York 10020 or by telephoning AMT Capital Services at
1-800-762-4848 and is incorporated by reference herein.
Additional Information About AMT Capital Fund, Inc. and the HLM International
Equity Portfolio
Additional information about HLM International Equity Portfolio is included in
the current prospectus of the AMT Fund and statement of additional information
each dated _____________, 1996. A copy of the HLM International Equity
Portfolio prospectus may be obtained without charge by contacting AMT Capital
Services at 600 Fifth Avenue, 26th floor, New York, New York 10020 or by
telephoning AMT Capital Services at 1-800-762-4848 and is incorporated by
reference herein. Further information about AMT Fund is included in the
current statement of additional information of the Current Portfolio, dated
__________, relating to the proposed transactions and other actions described
in this Combined Prospectus/Proxy Statement, including financial statements,
and has been filed with the Commission. This statement of additional
information may be obtained without charge by contacting AMT Capital Services
at 600 Fifth Avenue, 26th floor, New York, New York 10020 or by telephoning AMT
Capital Services at 1-800-762-4848 and is incorporated by reference herein.
Miscellaneous
Available Information
HL Fund and AMT Fund are each registered under the 1940 Act and are subject to
the informational requirements of the 1940 Act and, in accordance therewith,
each files reports, proxy materials, and other information with the Commission.
Such reports, proxy materials and other information may be inspected at the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such material also may be obtained from the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
Legal Matters
Certain legal matters in connection with the issuance of the shares of the
Successor Portfolio will be passed upon by Dechert Price & Rhoads, 477 Madison
Avenue, New York, New York 10022. Dechert Price & Rhoads will render an
opinion as to certain Federal income tax consequences of the Reorganization.
Financial Statements and Experts
The audited financial statements of the AMT Fund included in the statement of
additional information related to this Combined Prospectus/Proxy Statement (the
"SAI") have been audited by Ernst & Young LLP, independent auditors, for the
period indicated in the report of independent auditors thereon which appears in
the SAI. Copies of these financial statements, as included in the SAI, may be
obtained without charge by contacting AMT Capital Services, Inc. at 600 Fifth
Avenue, 26th floor, New York, New York 10020 or by telephoning AMT Capital
Services at 1-800-762-4848. Also, included are copies of the AMT Fund's Semi-
Annual Report for the period ended June 30, 1996 which have not been audited.
There are no financial statements for the Successor Portfolio since it has not
yet commenced operations.
OTHER BUSINESS
The Directors know of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, proxies will be
voted in accordance with the judgment of the Board of Directors.
Proposals for Future Meetings
As a Maryland corporation, HL Fund is not required to hold annual Shareholder
meetings in any year in which no meeting is required under the 1940 Act.
Consequently, HL Fund does not intend to hold annual shareholder meetings each
year, but meetings may be called by the Directors from time to time. Proposals
of shareholders that are intended to be presented at a future shareholder
meeting must be received by HL Fund by a reasonable time prior to HL Fund's
mailing of information statements relating to such meeting.
By Order of the Board of Directors
William E. Vastardis, Secretary
HLM International Equity Portfolio
A Series of
AMT Capital Fund, Inc.
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
DATE: __________, 1996
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF AMT Capital Fund, Inc.
("AMT Fund") for use at a special meeting of the shareholders of HLM
International Equity Portfolio ("Current Portfolio") a series of AMT Fund, which
meeting will be held at 10:00 a.m. at the offices of AMT Fund located on the
26th floor at 600 Fifth Avenue New York, New York 10020, and any adjournments
thereof (the "Meeting").
The undersigned shareholder of Current Portfolio, revoking any and all
previous proxies heretofore given for shares of Current Portfolio held by the
undersigned ("Shares"), does hereby appoint Carla E. Dearing and William E.
Vastardis, or any of them, with full power of substitution to each, to be the
attorneys and proxies of the undersigned (the "Proxies"), to attend the
Meeting of the shareholders of Current Portfolio, and to represent and direct
the voting interest represented by the undersigned as of the record date for
said Meeting for the Proposals specified below.
This proxy, if properly executed, will be voted in the manner as directed
herein by the undersigned shareholder. Unless otherwise specified below in
the squares provided, the undersigned's vote will be cast "FOR" Proposal One.
In their discretion, the Proxies are authorized to transact and vote upon such
other matters and business as may come before the meeting or
any adjournments thereof.
Proposal One. To approve the Agreement and Plan of Reorganization by and
between AMT Fund, on behalf of its Current Portfolio, and Harding,
Loevner Funds, Inc. ("HL Fund"), on behalf of its International
Equity Portfolio (the "Successor Portfolio"), providing for the
transfer of all of the assets, subject to all of the liabilities,
of Current Portfolio in exchange for shares of the Successor
Portfolio (the "Successor Shares"), and the distribution of such
Successor Shares to the shareholders of Current Portfolio in
complete liquidation of Current Portfolio.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal Two. To transact such other business as properly may come before
the Meeting or any adjournment(s) thereof.
To avoid adjourning the Meeting to a subsequent date, please facsimile,
telephone, or return this proxy in the enclosed self-addressed, postage-paid
envelope. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMT
FUND, WHICH RECOMMENDS A VOTE FOR PROPOSAL ONE.
Dated:________________, 199_
_________________________ ________________________
Beneficial Shareholder Signature of Shareholder
_________________________ ________________________
Number of Shares on Record Date Signature of Shareholder
This proxy may be revoked by the shareholder(s) at any time prior to the
special meeting.
NOTE: Please sign exactly as your name appears hereon. If shares are
registered in more than one name, all registered shareholders should sign
this proxy; but if one shareholder signs, this signature binds the other
shareholder. When signing as an attorney, executor, administrator, agent,
trustee, or guardian, or custodian for a minor, please give full title as
such. If a corporation, please sign in full corporate name by an authorized
person. If a partnership, please sign in partnership name by an authorized
person.
PART B
International Equity Portfolio
A Series of
Harding, Loevner Funds, Inc.
600 Fifth Avenue, 26th Floor
New York, New York 10020
(212) 332-5211
________________
STATEMENT OF ADDITIONAL INFORMATION
This statement of additional information is not a prospectus and should be read
in conjunction with the Combined Prospectus/Proxy Statement dated ___________,
1996 (the "Combined Prospectus/Proxy Statement"), for the special meeting of
shareholders of the Current Portfolio, a series of AMT Fund, an open-end
management investment company, to be held on __________, 1996 (the "Meeting").
The Combined Prospectus/Proxy Statement describes certain transactions and
other actions contemplated by the Reorganization Plan pursuant to which all of
the assets of Current Portfolio, a series of AMT Fund would be acquired by
Successor Portfolio, a portfolio of HL Fund, in exchange for shares of the
Successor Portfolio and the assumption by the Successor Portfolio of all of
the liabilities of the Current Portfolio. As described in the Combined
Prospectus/Proxy Statement, Successor Portfolio has an investment objective
and investment policies that are substantially similar to the Current
Portfolio. The Combined Prospectus/Proxy Statement also describes a new
Investment Advisory Agreement between Successor Portfolio and HL Fund and a
new Distribution Agreement between the Successor Portfolio and AMT Capital
Services, Inc. The shareholders of Current Portfolio are being requested to
approve the Reorganization Plan and the transactions contemplated thereby at
the Meeting.
Pro Forma financial statements are not presented herewith inasmuch as the
Reorganization Plan does not involve a change in the net assets of Current
Portfolio or the net asset value of Current Portfolio shares. Pursuant to the
Reorganization Plan shares will be exchanged at the same net asset value, and
the number of outstanding Successor Shares immediately following the
Reorganization will be the same as the number of HLM Shares outstanding
immediately prior to the Reorganization. The capitalization of the Successor
Portfolio will be the same as the Current Portfolio and Successor Portfolio
will report its financial highlights and per share data in the same form as
Current Portfolio. The annual report of the Current Portfolio for its fiscal
year ended December 31, 1995, which was filed on ___________, 1996 with the
Securities and Exchange Commission electronically on Form N30B-2, and is
incorporated by reference into this Statement of Additional Information.
The Combined Prospectus/Proxy Statement may be obtained without charge from
AMT Capital Services, the Distributor for the Successor Portfolio at 600 Fifth
Avenue, 26th floor, New York, New York 10020 or by telephoning AMT Capital
Services at 800-762-4848. This statement of additional information contains
additional and more detailed information about the operations and activities
of AMT Fund and HL Fund and the operations and activities of Current Portfolio
and Successor Portfolio.
The date of this statement of additional information is _____________, 1996.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Preliminary Statement of Additional Information of
Harding, Loevner Funds, Inc.
dated _____________, 1996
Current Statement of Additional Information of
Current Portfolio, a series of
AMT Capital Fund, Inc.
dated _________, 1996
Current Semi-Annual Report (unaudited) of
several series of AMT Capital Fund, Inc., including the
Current Portfolio, dated ________, 1996
Annual Report of several series of
AMT Capital Fund, Inc., including the
Current Portfolio, dated ________, 1995
PART C
HARDING, LOEVNER FUNDS, INC.
INTERNATIONAL EQUITY PORTFOLIO
PART C. OTHER INFORMATION
Item 15. Indemnification
The Registrant shall indemnify directors, officers, employees and
agents of the Registrant against judgments, fines, settlements and
expenses to the fullest extent allowed, and in the manner provided,
by applicable federal and Maryland law, including Section 17(h) and
(i) of the Investment Company Act of 1940.
Item 16. Exhibits
(1) Articles of Incorporation, dated July 31, 1996 (previously filed
as Exhibit (1) to Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A, File Nos. 333-09341, 811-07739)
and incorporated herein by reference.
(2) By-laws (previously filed as Exhibit (2) to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A,
File Nos. 333-09341, 811-07739) and incorporated herein by reference.
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization annexed hereto as
Appendix A.
(5) Not Applicable.
(6) Form of Investment Advisory Agreement between the Registrant and
Harding, Loevner Funds, Inc. filed herewith.
(7) Form of Distribution Agreement between the Registrant and AMT
Capital Services, Inc. filed herewith.
(8) Not Applicable.
(9) Form of Custodian Agreement between the Registrant and Investors
Bank & Trust Company filed herewith.
(10) Not Applicable.
(11) Opinion and Consent of Dechert Price & Rhoads filed herewith.
(12) Opinion of Dechert Price & Rhoads regarding certain tax matters
and consequences to shareholders to be filed.
(13)(a) Form of Transfer Agency and Service Agreement between the
Registrant and Investors Bank & Trust Company filed herewith.
13(b) Form of Administration Agreement between the Registrant and AMT
Capital Services, Inc.
(14) Consents of Ernst & Young LLP independent auditors for the
Current Portfolio and the AMT Capital Fund, Inc. to be filed.
(15) There are no financial statements omitted pursuant to Item
14(a)(1).
(16) Not applicable.
Item 17. Undertakings
The Registrant shall indemnify directors, officers, employees and
agents of the Registrant against judgments, fines, settlements and
expenses to the fullest extent allowed, and in the manner
provided, by applicable federal and Maryland law, including
Section 17(h) and (i) of the Investment Company Act of 1940. In
this regard, the Registrant undertakes to abide by the provisions
of Investment Company Act Releases No. 11330 and 7221 until
amended or superseded by subsequent interpretation of legislative
or judicial action.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrawill,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Somerville and
State of New Jersey on the ___ day of ___________, 1996.
HARDING, LOEVNER FUNDS, INC.
By:/s/ David R. Loevner
David R. Loevner, President
(Principal Executive,
Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement had been signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
/s/ Eric P. Nachimovsky Secretary
Eric P. Nachimovsky
INDEX TO EXHIBITS INCLUDED IN PART C
Exhibit 4 Form of Agreement and Plan of Reorganization annexed hereto
as Appendix A.
Exhibit 6 Form of Investment Advisory Agreement between the Registrant
and Harding, Loevner Funds, Inc.
Exhibit 7 Form of Distribution Agreement between the Registrant and
AMT Capital Services, Inc.
Exhibit 9 Form of Custodian Agreement between the Registrant and
Investors Bank & Trust Company
Exhibit 11 Opinion and Consent of Dechert Price & Rhoads
Exhibit 13(a) Transfer Agency and Service Agreement between the
Registrant and Investors Bank & Trust Company
Exhibit 13(b) Form of Administration Agreement between the
Registrant and AMT Capital Services, Inc.
Appendix A
Agreement and Plan of Reorganization
THIS AGREEMENT AND PLAN OF REORGANIZATION made this __th day of __________,
199_, by and between the AMT Capital Fund, Inc., a Maryland corporation ("AMT
Fund"), on behalf of HLM International Equity Portfolio, a separate series of
the AMT Fund (the "HLM Portfolio"), and Harding, Loevner Funds, Inc., a Maryland
corporation ("HLM Fund"), on behalf of International Equity Portfolio, a
separate series of the HLM Fund (the "IEP Portfolio").
WITNESSETH:
WHEREAS, the AMT Fund and the HLM Fund are open-end, registered investment
companies of the management type;
WHEREAS, the AMT Fund is authorized to issue its shares of common stock,
and the HLM Fund is authorized to issue its shares of common stock, in separate
series, each of which maintains a separate and distinct portfolio of assets;
WHEREAS, the HLM Portfolio is one separate series of the AMT Fund and the
IEP Portfolio is one separate series of the HLM Fund, each of which is
diversified;
WHEREAS, the HLM Portfolio owns securities which are assets of the character
in which the IEP Portfolio is permitted to invest;
WHEREAS, AMT Fund wishes to effect a transfer of all of the assets and
liabilities of the HLM Portfolio to the IEP Portfolio;
WHEREAS, the Board of Directors of the AMT Fund has (a) pursuant to Section
3-105(b) of the Maryland General Corporation Law of the State of Maryland,
declared that the transfer of all of the assets and liabilities of the HLM
Portfolio to the IEP Portfolio is advisable on substantially the terms and
conditions set forth herein and has directed that such proposed transaction
be submitted for consideration at either an annual or special meeting of the
HLM Portfolio's shareholders, (b) determined that such transaction is in the
best interests of the HLM Portfolio and its shareholders, and that the interests
of the existing shareholders of the HLM Portfolio would not be diluted as a
result of this transaction, and (c) determined that subsequent to the
consummation of the transaction contemplated by this Agreement the HLM Portfolio
will cease operations;
WHEREAS, the Board of Directors of the HLM Fund has determined that the
transfer of all of the assets and liabilities of the HLM Portfolio to the IEP
Portfolio is in the best interest of the IEP Portfolio and its shareholders (it
being understood that David R. Loevner is the sole shareholder of the IEP
Portfolio prior to the consummation of the Reorganization); and
WHEREAS, the parties hereto intend to provide for the reorganization of the
HLM Portfolio through the transfer to the IEP Portfolio of all of the assets,
subject to all of the liabilities, of the HLM Portfolio in exchange for voting
shares of common stock, $0.001 par value, of the IEP Portfolio (the "IEP
Portfolio Shares"), the dissolution of the HLM Portfolio and the distribution
to the HLM Portfolio shareholders of such IEP Portfolio Shares, all pursuant to
the provisions of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code");
NOW THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. Plan of Reorganization and Liquidation
(a) the AMT Fund, on behalf of the HLM Portfolio, shall transfer to the
IEP Portfolio at the closing provided for in Section 2 (the "Closing") all of
the then existing assets of the HLM Portfolio of every kind and nature. In
consideration therefor, the IEP Portfolio shall at the Closing (i) assume all
of the HLM Portfolio's liabilities then existing, whether absolute, accrued,
contingent or otherwise and (ii) deliver to the HLM Portfolio that number of
full and fractional IEP Portfolio shares equal to the number of full and
fractional shares of the HLM Portfolio then outstanding. The number of
shares of the HLM Portfolio issued and outstanding and the number of IEP
Portfolio Shares to be issued to the HLM Portfolio shall be determined by
Investors Bank & Trust Company ("IBT"), the fund accounting agent to the HLM
Portfolio at 4:00 p.m., Eastern Time, on the Closing Date (as defined in Section
2 herein) after the declaration of any dividends on that date. IBT's
determination shall be conclusive and binding on the HLM Portfolio, the IEP
Portfolio and their respective shareholders.
(b) Upon consummation of the transactions described in paragraph (a) of this
Section 1, the HLM Portfolio shall distribute in complete liquidation to its
shareholders of record as of the Closing Date (on a pro rata basis) the IEP
Portfolio Shares that were received by the HLM Portfolio. Such distribution and
liquidation shall be accomplished by the establishment of an open account on the
share records of the IEP Portfolio in the name of each shareholder of the HLM
Portfolio representing a number of IEP Portfolio Shares equal to the number of
shares of the HLM Portfolio owned of record by the shareholder at the Closing
Date.
(c) After the Closing Date, the HLM Portfolio shall not conduct any business
except in connection with its liquidation.
(d) Any reporting responsibility of the AMT Fund including (but not limited
to) the responsibility for any periods ending on or before the Closing Date for
filing of regulatory reports, tax returns, or other documents with the
Securities and Exchange Commission (the "SEC"), any state securities commission,
and any federal, state, or local tax authorities or any other relevant
regulatory authority, is and shall remain the responsibility of the AMT Fund.
2. Closing and Closing Date.
The Closing shall occur at the offices of AMT Capital Services, Inc., 600 Fifth
Avenue, 26th floor, New York, New York, 10020 at 4:00 p.m., Eastern Time, on
_________, 1996 or at such later time and date, or at such other location, as
the parties may mutually agree (the "Closing Date"). All acts taking place at
the Closing shall be deemed to take place simultaneously as of the close of
business on the Closing Date unless otherwise provided.
2.1 Portfolio securities held by the HLM Portfolio and represented by a
certificate or written instrument shall be made available by the AMT Fund or
on its behalf to the custodian of the IEP Portfolio for examination no later
than five (5) business days preceding the Closing date. Such portfolio
securities (together with any cash or other assets) shall be delivered by the
HLM Portfolio to the custodian for the account of the IEP Portfolio on or before
the Closing Date in conformity with applicable custody provisions under the
Investment Company Act of 1940 (the "1940 Act") and duly endorsed in proper form
for transfer in such condition as to constitute good delivery thereof. Portfolio
securities and instruments deposited with a securities depository shall be
delivered by book entry in accordance with customary practices of such
depositories and the custodian. All necessary taxes including without
limitation all necessary federal and state stock transfer stamps shall have
been paid prior to delivery. The cash delivered shall be in the form of a
Federal Funds wire, payable to the order of "Investors Bank & Trust Company,
Custodian for the HLM Fund: International Equity Portfolio."
3. Representations and Warranties.
3.1 The AMT Fund represents and warrants to the HLM Fund as follows:
(a) The AMT Fund is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Maryland and the HLM Portfolio
is a series of the AMT Fund;
(b) The AMT Fund is a registered open-end investment company and its
registration with the SEC as an investment company under the 1940 Act and the
registration of its shares under the Securities Act of 1933 (the "1933 Act')
are in full force and effect;
(c) The AMT Fund is not, and the execution, delivery and performance of the
Agreement will not result, in a material violation of AMT Fund's Articles of
Incorporation or By-Laws or of any material agreement, indenture, instrument,
contract, lease or other undertaking to which the AMT Fund is a party or
by which it is bound;
(d) The AMT Fund has no material contracts or other commitments (other than
this Agreement) which will be terminated prior to the Closing Date where such
termination will result in any liability to the HLM Portfolio not reflected on
the HLM Portfolio's balance sheet other than liabilities in the ordinary course
of business incurred subsequent to December 31, 1995 or otherwise disclosed to
the HLM Fund;
(e) No material litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its knowledge
threatened against the AMT Fund or any properties or assets held by it. The AMT
Fund knows of no facts which might form the basis for the institution of any
such proceedings which would materially and adversely affect its business and is
not a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the HLM Portfolio at December
31, 1995 has been audited by Ernst & Young LLP and is in accordance with
generally accepted accounting principles ("GAAP") consistently applied, and
such statement (a copy of which has been furnished to the HLM Fund) presents
fairly, in all material respects, the financial position of the HLM Portfolio
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the HLM Portfolio required to be reflected on the balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(g) Since December 31, 1995, there has not been any material adverse change
in the financial condition of the HLM Portfolio assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the HLM Portfolio of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the IEP Portfolio;
(h) At the Closing Date all material federal and other tax returns and reports
of the HLM Portfolio required by law to have been filed by such date shall have
been filed and are or will be correct and, to the best of AMT Fund's knowledge,
all federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and, to the best of the AMT Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(i) For each taxable year of operation since inception (including the taxable
year including the Closing Date) the HLM Portfolio has met the requirements of
Subchapter M of the Code for qualification as a regulated investment company and
has elected to be treated as such, has been eligible to and has computed its
federal income tax under Section 852 of the Code, and will have distributed
all of its investment company taxable income and net capital gain (as defined
in the Code) that has accrued through the Closing Date;
(j) No facts have come to the attention of the AMT Fund which have led the
AMT Fund to conclude that the HLM Portfolio will fail to qualify as a regulated
investment company under Subchapter M for the taxable year that includes the
Closing Date;
(k) All issued and outstanding shares of the HLM Portfolio are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable. All of the issued and outstanding shares of the HLM Portfolio,
will, at the time of Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent. The HLM Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the HLM Portfolio, nor is there outstanding any security
convertible into any shares of the HLM Portfolio;
(l) At the Closing Date, the AMT Fund will have good and valid title to the
HLM Portfolio's assets to be transferred to the IEP Portfolio and full right,
power, and authority to sell, assign, transfer and deliver such assets
hereunder, and upon delivery and payment for such assets, the HLM Fund will
acquire good and valid title thereto, subject to no restrictions on the full
transfer thereof, including such restrictions as might arise under the 1933
Act, other than, in each case, as disclosed to the HLM Fund or as permitted by
the then current prospectus of the HLM Portfolio;
(m) The execution, delivery and performance of this Agreement has been duly
authorized prior to the Closing Date by all necessary action on the part of AMT
Fund's Board of Directors, and, subject to the approval of the shareholders of
the HLM Portfolio, this Agreement constitutes a valid and binding obligation of
the AMT Fund, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent, transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights and to general equity principles; and
(n) The information to be furnished by the AMT Fund for use in registration
statements or proxy materials or for use in any other document filed or to be
filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.) which may be necessary in
connection with the transaction contemplated hereby shall be accurate and c
omplete in all material respects and shall comply in all material respects with
Federal securities and the laws and regulations thereunder applicable thereto.
3.2 The HLM Fund represents and warrants to the AMT Fund as follows:
(a) The HLM Fund is a corporation duly formed, validly existing and in good
standing under the laws of the State of Maryland and the IEP Portfolio is a
series of the AMT Fund;
(b) The HLM Fund is a registered open-end investment company and its
registration with the SEC as an investment company under the 1940 Act, and the
registration of its shares under the 1933 Act, are in full force and effect;
(c) The current prospectus and statement of additional information of the
HLM Fund conform in all material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations of the SEC thereunder
and do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(d) At the Closing Date, the HLM Fund will have good and marketable title to
its assets;
(e) The HLM Fund is not, and the execution, delivery and performance of this
Agreement will not result, in a material violation of the HLM Fund's Articles of
Incorporation or By-Laws or any material agreement, indenture, instrument,
contract, lease or other undertaking to which the HLM Fund is a party or by
which it is bound;
(f) The information to be furnished by the HLM Fund for use in proxy materials
and other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material respects and
shall comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(g) HLM Fund has no material contracts or other commitments (other than this
Agreement) which will be terminated prior to the Closing Date where such
termination will result in any liability to the IEP Portfolio other than
liabilities disclosed to the AMT Fund;
(h) No material litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its knowledge
threatened against the HLM Fund or any properties or assets held by it. The HLM
Fund knows of no facts which might form the basis for the institution of any
such proceedings which would materially and adversely affect its business and
is not a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions herein contemplated;
(i) Any and all issued and outstanding shares of the IEP Portfolio are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. The IEP Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any shares of the IEP
Portfolio, nor is there outstanding any security convertible into any shares
of the IEP Portfolio;
(j) The execution, delivery and performance of this Agreement have been duly
authorized prior to the Closing Date by all necessary action on the part of the
HLM Fund's Board of Directors, and this Agreement constitutes a valid and
binding obligation of the HLM Fund, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors' rights and to
general equity principles; and
(k) At the Closing Date, all material federal and other tax returns and reports
of the IEP Portfolio required by law to have been filed by such date shall have
been filed and are or will be correct and, to the best of the HLM Fund's
knowledge, all federal and other taxes shown as due or required to be shown as
due on said returns and reports shall have been paid or provision shall have
been made for the payment thereof, and, to the best of the HLM Fund's knowledge,
no such return is currently under audit and no assessment has been asserted with
respect to such returns.
4. Conditions Precedent. The obligations of the HLM Fund and the AMT Fund to
effect the transactions contemplated hereunder shall be subject to the
satisfaction of each of the following conditions:
(a) All filings shall have been made with, and all authority and orders shall
have been received from, the SEC and state securities commissions as may be
necessary in the opinion of Dechert Price & Rhoads, counsel to the IEP Portfolio
and to the HLM Portfolio, to permit the parties to carry out the transactions
contemplated by this Agreement;
(b) The investment objective and permitted investments of the IEP Portfolio
are substantially similar to the HLM Portfolio and the rate of investment
management fees are identical to those of the HLM Portfolio;
(c) The HLM Fund and the AMT Fund shall have received an opinion of Dechert
Price & Rhoads substantially to the effect that, based on the facts, assumptions
and representations of the parties, the transaction contemplated by this
Agreement constitutes a tax free organization for federal income tax purposes
and as a result no gain or loss will be recognized by HLM Fund, the AMT Fund or
the shareholders of the HLM Portfolio as a result of the Transaction;
(d) This Agreement and Plan of Reorganization and the reorganization
contemplated hereby shall have been approved by the Board of Directors of the
AMT Fund and by the Board of Directors of the HLM Fund and shall have been
recommended for approval to the shareholders of the HLM Portfolio by the AMT
Fund's Board of Directors;
(e) This Agreement and Plan of Reorganization and the reorganization
contemplated hereby shall have been approved by the affirmative vote of holders
of the outstanding shares of common stock of the HLM Portfolio representing at
least a majority of all of the outstanding shares of the HLM Portfolio;
(f) The HLM Fund, on behalf of the IEP Portfolio, shall have entered into an
Investment Advisory Agreement with Harding, Loevner Management, L.P. ("HLM
Management") and a Distribution Agreement with AMT Capital Services, Inc., such
Agreements to be in each case substantially similar in form and substance to the
respective Agreement in effect at the Closing Date between the AMT Fund, on
behalf of the HLM Portfolio, and HLM Management (in the case of the Investment
Advisory Agreement) or AMT Capital Services (in the case of the Distribution
Agreement), which Agreements have been approved by the Board of Directors of the
HLM Fund and, to the extent required by law, by the members of the Board of
Directors who are not "interested persons," as defined in the 1940 Act, of HLM
Fund, as well as by the shareholders of the IEP Portfolio (it being understood
that David R. Loevner as sole shareholder of the IEP Portfolio prior to the
consummation of the reorganization, will vote for such ratification);
(g) The HLM Fund shall have filed with the SEC a Registration Statement on
Form N-14 complying in all material respects with the requirements of the 1933
Act, the Securities Exchange Act of 1934, as amended, the 1940 Act, and
applicable rules and regulations thereunder, relating to a meeting of the
shareholders of the HLM Portfolio to be called to consider and act upon the
transactions contemplated herein, and such Registration Statement shall have
been declared effective. The AMT Fund agrees to provide the HLM Fund with
information applicable to the AMT Fund required under such Acts, rules and
regulations for inclusion in the Registration Statement on Form N-14;
(h) All securities owned by the HLM Portfolio at the time of the Closing will
be owned by the HLM portfolio free and clear of any liens, claims, charges,
options and encumbrances (except such liens, claims, charges, options and
encumbrances as are permitted by the then current prospectus of the HLM
Portfolio), and none of such securities is or, after the reorganization as
contemplated hereby, will be subject to any restrictions, legal or contractual,
on the disposition thereof, including restrictions as to the public offering or
sale thereof under the 1933 Act, as amended (except for such restrictions as
are permitted by the then current prospectus of the HLM Portfolio, which
restrictions do not prohibit the transfer of such securities from the HLM
Portfolio to the IEP Portfolio), and all such securities are or will be readily
marketable (except such securities which are not readily marketable and which
the HLM Portfolio is permitted to purchase by its then current prospectus); and
(i) The AMT Fund, on behalf of the HLM Portfolio, shall have filed Articles
of Transfer with the Maryland Department of Assessments and Taxation in
accordance with Section 3-109 of the Maryland General Corporation Law and such
Articles of Transfer shall have been accepted by such agency.
5. Amendment. This Agreement and Plan of Reorganization may be amended at any
time by the mutual agreement of the AMT Fund and the HLM Fund, notwithstanding
approval thereof by the shareholders of the HLM Portfolio, provided that no
amendment shall have a material adverse effect on the interests of the
shareholders of the HLM Portfolio or the IEP Portfolio.
6. Termination. The AMT Fund and the HLM Fund may by mutual consent terminate
this Agreement and Plan of Reorganization and abandon the reorganization
contemplated hereby, notwithstanding approval thereof by the shareholders of
the HLM Portfolio, at any time prior to the Closing, if circumstances should
develop that, in their judgment, make proceeding with the Agreement inadvisable.
7. No Broker's or Finder's Fee. The AMT Fund and the HLM Fund each represents
that there is no person with whom it has dealt who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or commission arising
out of the transactions contemplated by this Agreement and Plan of
Reorganization.
8. No Survival of Representations, etc. The representations, warranties,
covenants and agreements of the parties contained herein shall not survive the
Closing Date, except for the provisions of Section 1(c).
9. Waiver. The AMT Fund or the HLM Fund, after consultation with its counsel
and by consent of its Board of Directors, Executive Committee or an officer
authorized by such Board of Directors, may waive any condition to its
obligations hereunder if in its judgment such waiver will not have a material
adverse affect of the interests of its shareholders. If the transactions
contemplated by this Agreement and Plan of Reorganization have not been
substantially completed by _________, 1996, the Agreement shall automatically
terminate on that date unless a later date is agreed to by both the HLM Fund
and the AMT Fund.
10. Reliance. All covenants, agreements, representations and warranties made
under this Agreement and Plan of Reorganization shall be deemed to have been
material and relied upon by each of the parties notwithstanding any
investigation made by such party or on its behalf.
11. Notices. All notices required or permitted under this Agreement and Plan
of Reorganization shall be given in writing:
To the AMT Fund at: AMT Capital Fund, Inc.
600 Fifth Avenue, 26th floor
New York, NY 10020
Attn: Carla E. Dearing
To the HLM Fund at: Harding, Loevner Funds, Inc.
600 Fifth Avenue
New York, NY 10020
Attn: William E. Vastardis
12. Expenses. Expenses of the reorganization including legal expenses will
be borne by HLM Management. Any expenses borne by HLM Management will be solely
and directly related to the Reorganization within the meaning of Revenue Ruling
73-54, 1973-1 C.B. 187.
13. Miscellaneous Provisions. This Agreement and Plan of Reorganization shall
bind and inure to the benefit of the parties and their respective successors and
assigns. It shall be governed by and carried out in accordance with the laws of
the State of New York.
The name "AMT Capital Fund, Inc." is the designation of the Directors for the
time being under the Articles of Incorporation dated August 3, 1993, and all
persons dealing with the AMT Fund must look solely to the HLM Fund property for
the enforcement of any claim against the AMT Fund, as neither the Directors,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of the AMT Fund. No series of the AMT Fund shall be
liable for claims against any other series of the AMT Fund.
The name "Harding, Loevner Management, L.P." is the designation of the
Directors for the time being under the Articles of Incorporation dated July 31,
1996, and all persons dealing with the HLM Fund must look solely to the HLM Fund
property for the enforcement of any claim against the HLM Fund, as neither the
Directors, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the HLM Fund. No series of the HLM Fund
shall be liable for claims against any other series of the HLM Fund.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement and Plan
of Reorganization to be executed and delivered by their duly authorized officers
as of the day and year first written above.
AMT CAPITAL FUND, INC. (on behalf
of the HLM International Equity
Portfolio)
Attest: (Seal)
By:____________________________ By:_______________________________
Title:_________________________ Title:____________________________
HARDING, LOEVNER FUNDS, INC. (on
behalf of the International Equity
Portfolio)
Attest: (Seal)
By:____________________________ By:_______________________________
Title:_________________________ Title:____________________________
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated ___________, 1996, between Harding, Loevner Funds,
Inc., a Maryland corporation (the "Fund"), and Harding, Loevner Management,
L.P., a New Jersey limited partnership (the "Adviser").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Attorney-in-Fact. The Fund appoints the Adviser as its attorney-in-fact
to invest and reinvest the assets of the (insert name of Portfolio) (the
"Portfolio"), as fully as the Fund itself could do. The Adviser hereby accepts
this appointment.
2. Duties of the Adviser. (a) The Adviser shall be responsible for managing
the investment portfolio of the Portfolio, including, without limitation,
providing investment research, advice and supervision, determining which
portfolio securities shall be purchased or sold by the Portfolio, purchasing
and selling securities on behalf of the Portfolio and determining how voting and
other rights with respect to portfolio securities of the Portfolio shall be
exercised, subject in each case to the control of the Board of Directors of the
Fund (the "Board") and in accordance with the objective, policies and principles
of the Portfolio set forth in the Registration Statement, as amended, of the
Fund, the requirements of the Investment Company Act of 1940, as amended, (the
"Act") and other applicable law. In performing such duties, the Adviser shall
provide such office space, and such executive and other personnel as shall be
necessary for the investment operations of the Portfolio. In managing the
Portfolio in accordance with the requirements set forth in this paragraph 2,
the Adviser shall be entitled to act upon advice of counsel to the Fund or
counsel to the Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be liable to the
Fund for any error of judgment or mistake of law or for any loss arising out of
any investment or for any act or omission in the management of the Portfolio and
the performance of its duties under this Agreement except for losses arising out
of the Adviser's willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement. It is agreed that the Adviser
shall have no responsibility or liability for the accuracy or completeness of
the Fund's Registration Statement under the Act and the Securities Act of
1933 except for information about the Adviser contained in the Prospectus
included as part of such Registration Statement supplied by the Adviser for
inclusion therein. The Fund agrees to indemnify and hold the Adviser harmless
from and against all claims, losses, costs, damages and expenses, including
reasonable fees and expenses for counsel, incurred by it resulting from any
claim, demand, action or suit in connection with or arising out of any action or
omission by the Adviser in the performance of this Agreement except for those
claims, losses, costs, damages and expenses resulting from the Adviser's willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement.
(c) The Adviser and its officers may act and continue to act as investment
advisers and managers for others (including, without limitation, other
investment companies), and nothing in this Agreement will in any way be
deemed to restrict the right of the Adviser to perform investment management
or other services for any other person or entity, and the performance of such
services for others will not be deemed to violate or give rise to any duty or
obligation to the Fund.
(d) Except as provided in Section 5, nothing in this Agreement will limit
or restrict the Adviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own account or
accounts. The Fund acknowledges that the Adviser and its officers, affiliates
or employees, and its other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at the same time
being acquired or disposed of for the account of the Portfolio. The Adviser
will have no obligation to acquire for the Portfolio a position in any
investment which the Adviser, its officers, affiliates or employees may acquire
for its or their own accounts or for the account of another client, if in the
sole discretion of the Adviser, it is not feasible or desirable to acquire a
position in such investment for the account of the Portfolio, provided that
the Adviser shall have acted in good faith and in a manner deemed equitable
to the Portfolio. The Adviser represents that it has adopted a code of ethics
governing personal trading that complies in all material respects with the
recommendations contained in the Investment Company Institute "Report of the
Advisory Group on Personal Investing," dated May 9, 1994, and the Adviser agrees
to furnish a copy of such code of ethics to the Directors of the Fund.
(e) If the purchase or sale of securities consistent with the investment
policies of the Portfolio and one or more other clients serviced by the Adviser
is considered at or about the same time, transactions in such securities will be
allocated among the Portfolio and clients in a manner deemed fair and reasonable
by the Adviser. Although there is no specified formula for allocating such
transactions, the various allocation methods used by the Adviser, and the
results of such allocations, are subject to periodic review by the Board.
3. Expenses. The Adviser shall pay all of its expenses arising from the
performance of its obligations under this Agreement. Except as provided below,
the Adviser shall not be required to pay any other expenses of the Fund
(including out-of-pocket expenses, but not including the Adviser's overhead or
employee costs), including without limitation, organization expenses of the
Fund; brokerage commissions; maintenance of books and records which are required
to be maintained by the Fund's custodian or other agents of the Fund; telephone,
telex, facsimile, postage and other communications expenses; expenses relating
to investor and public relations; freight, insurance and other charges in
connection with the shipment of the Fund's portfolio securities; indemnification
of Directors and officers of the Fund; travel expenses (or an appropriate
portion thereof) of Directors and officers of the Fund to the extent that such
expenses relate to attendance at meetings of the Board of Directors of the Fund
or any committee thereof or advisors thereto held outside of Somerville, New
Jersey; interest, fees and expenses of independent attorneys, auditors,
custodians, accounting agents, transfer agents, dividend disbursing agents and
registrars; payment for portfolio pricing or valuation service to pricing
agents, accountants, bankers and other specialists, if any; taxes and government
fees; cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares; expenses of
registering and qualifying shares of the Fund under Federal and state laws and
regulations; expenses of printing and distributing reports, notices, dividends
and proxy materials to existing stockholders; expenses of printing and filing
reports and other documents filed with governmental agencies, expenses of
printing and distributing prospectuses; expenses of annual and special
stockholders' meetings; costs of stationery, fees and expenses (specifically
including travel expenses relating to Fund business) of Directors of the Fund
who are not employees of the Adviser or its affiliates; membership dues in the
Investment Company Institute; insurance premiums and extraordinary expenses such
as litigation expenses.
4. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Adviser pursuant to this Agreement,
the Fund will pay to the Adviser promptly at the end of each calendar month, a
fee, calculated on each day during such month, at an annual rate of (insert
compensation rate) of the Portfolio's average daily net assets. The Adviser
shall be entitled to receive during any month such interim payments of its fee
hereunder as the Adviser shall request, provided that no such payment shall
exceed 50% of the amount of such fee then accrued on the books of the Portfolio
and unpaid.
(b) If the Adviser shall serve hereunder for less than the whole of any
month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net assets" of the
Portfolio shall mean the average of the values placed on the Portfolio's net
assets on each day pursuant to the applicable provisions of the Fund's
Registration Statement, as amended.
5. Purchase and Sale of Securities. The Adviser shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers as the Adviser shall deem appropriate in order to carry out the policy
with respect to the allocation of portfolio transactions as set forth in the
Registration Statement of the Fund, as amended, or as the Board may direct from
time to time. The Adviser will use its reasonable efforts to execute all
purchases and sales with dealers and banks on a best net price basis. The
Adviser will consider the full range and quality of services offered by the
executing broker or dealer when making these determinations. Neither the
Adviser nor any of its officers, affiliates or employees will act as principal
or receive any compensation from the Portfolio in connection with the purchase
or sale of investments for the Portfolio other than the fee referred to in
Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full force and effect
until two years from the date hereof, and will continue in effect from year to
year thereafter if such continuance is approved in the manner required by the
Act, provided that this Agreement is not otherwise terminated. The Adviser may
terminate this Agreement at any time, without the payment of any penalty, upon
60 days' written notice to the Fund. The Fund may terminate this Agreement with
respect to the Portfolio at any time, without the payment of any penalty, on 60
days' written notice to the Adviser by vote of either the majority of the non-
interested members of the Board or a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the Act) of the Portfolio. This
Agreement will automatically terminate in the event of its assignment (the term
"assignment" for this purpose having the meaning defined in Section 2(a)(4) of
the Act).
7. Changes in Membership. The Adviser is a limited partnership and, pursuant
to the New Jersey Uniform Securities Law and the Investment Advisers Act of
1940, shall notify the Fund of any change in the membership of such partnership
within a reasonable time after the change.
8. Notices. Any notice or other communication authorized or required
hereunder shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed to the Fund at 50 Division
Street, Suite 401, Somerville, New Jersey 08876, Attention: President; and to
AMT Capital Services, Inc., 600 Fifth Avenue, 26th Floor, New York, New York
10020, Attention: Carla E. Dearing. Either party may designate a different
address by notice to the other party. Any such notice or other communication
shall be deemed given when actually received.
9. Amendment. This Agreement may be amended by the parties hereto with
respect to a Series only if such amendment is specifically approved (i) by the
Board of Directors of the Fund or by the vote of a majority of outstanding
Shares, and (ii) by a majority of the Non-Interested Directors of the Fund,
which vote must be cast in person at a meeting called for the purpose of voting
on such approval.
10. Right of Adviser In Corporate Name. The Adviser and the Fund each agree
that the phrase "HLM," which comprises a component of the Portfolio's corporate
name, is a property right of the Adviser. The Fund agrees and consents that (i)
it will only use the phrase "HLM" as a component of its corporate name and for
no other purpose; (ii) it will not purport to grant to any third party the right
to use the phrase "HLM" for any purpose; (iii) the Adviser or any corporate
affiliate of the Adviser may use or grant to others the right to use the phrase
"HLM" or any combination or abbreviation thereof, as all or a portion of a
corporate or business name or for any commercial purpose, including a grant of
such right to any other investment company, and at the request of the Adviser,
the Fund will take such action as may be required to provide its consent to such
use or grant; and (iv) upon the termination of any investment advisory agreement
into which the Adviser and the Fund may enter, the Fund shall, upon request by
the Adviser, promptly take such action, at its own expense, as may be necessary
to change the Portfolio's corporate name to one not containing the phrase "HLM"
and following such a change, shall not use the phrase "HLM" or any combination
thereof, as part of the Portfolio's corporate name or for any other commercial
purpose, and shall use its reasonable efforts to cause its officers, directors
and stockholders to take any and all actions which the Adviser may request to
effect the foregoing and recovery to the Adviser any and all rights to such
phrase.
11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or
to impose any duty upon either of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the date first written
above.
ATTEST HARDING, LOEVNER FUNDS, INC.
By:_______________________________ By:_____________________________
, Secretary David R. Loevner, President
ATTEST HARDING, LOEVNER MANAGEMENT, L.P.
BY: HLM HOLDINGS, INC., GENERAL
PARTNER
By:_______________________________ By:___________________________
, Secretary David R. Loevner, President
DISTRIBUTION AGREEMENT
AGREEMENT dated as of _____________,1996 by and between Harding, Loevner
Funds, Inc., an open-end management investment company organized as a
corporation under the laws of the State of Maryland (the "Fund"), and AMT
Capital Services, Inc., a Delaware corporation ("AMT Capital").
WHEREAS, the Fund desires that AMT Capital shall be, for the period of
this Agreement, the distributor of shares of the Fund (the "Shares");
WHEREAS, the Fund offers shares of three separate series (individually,
a "Series," and collectively, the "Series"), which have been registered under
the Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, the Fund desires to appoint AMT Capital as the distributor of
the Shares, and AMT Capital wishes to become the distributor of the Shares.
NOW, THEREFORE, in consideration of the above premises and of other good
and valuable consideration, the parties hereto, intending to be legally bound,
agree as follows:
1. Appointment of Distributor
The Fund hereby appoints AMT Capital as the distributor of the Fund's Shares
for the period and on the terms set forth in this Agreement. This appointment
applies to each existing Series of Shares, as well as any future series provided
(i) the Fund does not object to AMT Capital in writing on anybasis or (ii) AMT
Capital does not object to the Fund in writing on the basis of the capabilities
of AMT Capital. AMT Capital accepts such appointment and agrees to render the
services and provide, at its own expense, the office space, furnishings and
equipment, and the personnel required by it to perform the services on the terms
herein provided.
2. Representation and Warranties of AMT Capital
AMT Capital represents and warrants to the Fund that:
A. AMT Capital is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full power
and authority, corporate and otherwise, to consummate the transactions
contemplated by this Agreement. AMT Capital is duly qualified to carry out
its business, and is in good standing, in the State of New York.
B. The Board of Directors and stockholders of AMT Capital have taken
all action required by law and AMT Capital's Certificate of Incorporation and
By-Laws to authorize the execution and delivery of this Agreement by AMT Capital
and the consummation on behalf of AMT Capital of the transactions contemplated
by this Agreement. This Agreement constitutes a legal, valid and binding
obligation of AMT Capital enforceable in accordance with its terms. Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will result in a breach of, or constitute a
default under, or with lapse of time or giving of notice or both will result in
a breach of or constitute a default under, or otherwise give any party thereto
the right to terminate (a) any mortgage, indenture, loan or credit agreement or
any other agreement or instrument evidencing indebtedness for money borrowed to
which AMT Capital is a party or by which AMT Capital or any of its properties
is bound or affected, or pursuant to which AMT Capital has guaranteed the
indebtedness of any person, or (b) any lease, license, contract or other
agreement to which AMT Capital is a party or by which AMT Capital or any of
its properties is bound or affected. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
result in, or require, the creation or imposition of any mortgage, deed or
trust, pledge, lien, security interest, or other charge or encumbrance of any
nature upon or with respect to any of the properties now or hereafter owned by
AMT Capital.
C. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate any
provision of the Certificate of Incorporation or By-Laws of AMT Capital.
D. Except such as have been obtained and as are in full force and
effect and subject to no dispute, claim or challenge, no permit, license,
franchise, approval, authorization, qualification or consent of, registration
or filing with, or notice to, any governmental authority is required in
connection with the execution and delivery by AMT Capital of this Agreement or
in connection with the consummation by AMT Capital of any transactions
contemplated by this Agreement, and no such permit, license, franchise,
approval, authorization, qualification or consent of, registration or filing
with, or notice to any federal, state or local governmental authority is
required in connection with AMT Capital's business or operations as currently
conducted or as currently contemplated to be conducted. AMT Capital has
conducted its business and operations in compliance with all applicable laws
and regulations.
E. AMT Capital is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and is a member of the
National Association of Securities Dealers, Inc. (the "NASD").
3. Duties of the Fund
The Fund shall use its reasonable efforts to cooperate in the maintenance
by the investment adviser or other service provider of the registration
of the Fund's securities under the 1940 Act and the 1933 Act, and the Fund
and/or such service providers shall bear all expenses in connection therewith.
It is understood that this Agreement shall not require AMT Capital to bear
any expenses related to the Fund's registration or maintenance of the Fund's
registration.
The Fund shall cooperate in the qualification by the investment adviser
or other service provider of the Fund of each Series of Shares under the laws
of such states and other jurisdictions of the United States as the Fund shall
determine and shall execute and deliver such documents as may reasonably be
required for such purpose, but the Fund shall not be required to qualify as
a foreign business entity in any jurisdiction, nor effect any modification of
its policies or practices without prior approval of the Fund's Board of
Directors. The Fund's officers, subject to the direction of the Board of
Directors of the Fund and with the advice of AMT Capital, shall determine
whether it is desirable to qualify or continue to offer Shares of any Series
in any jurisdiction. AMT Capital shall have no obligation hereunder to assist
in the qualification of Shares of any Series in any jurisdiction or in the
maintenance of any qualification, other than its obligation to serve as
registered agent to the Fund and execute required filings.
The Fund will deliver to AMT Capital copies of each of the following
documents and will deliver to AMT Capital all future amendments and supplements,
if any:
A. a certified copy of the Articles of Incorporation of the Fund as amended
and currently in effect ("Charter");
B. a copy of the Fund's By-laws as amended and currently in effect
("By-laws") certified by the Secretary of the Fund;
C. the Fund's prospectus and statement of additional information (including
supplements thereto) which relate to the Shares (the "Prospectus" and "SAI");
and
D. the Fund's current Registration Statement on Form N-1A as filed under
the 1940 and 1933 Acts, as such shall be amended from time to time (the
"Registration Statement").
The Fund and/or other service providers to the Fund shall also furnish
AMT Capital, with respect to a Series or the Fund, as applicable:
E. annual audit reports of the Fund's books and accounts made by independent
public accountants regularly retained by the Fund;
F. such additional copies of the Prospectus and SAI and annual, semi-annual
and other reports and communications to shareholders which relate to the Shares
as AMT Capital may reasonably require for sales purposes;
G. a monthly itemized list of the securities held by each Series;
H. monthly balance sheets of the Fund as soon as practicable after the end
of each month;
I. a survey indicating the states and jurisdictions in which each Series is
qualified for sale or exempt from the requirements of the securities laws of
such state or jurisdiction and the amounts of Shares of such Series that may
be sold in such states and jurisdictions, as such may be amended from time to
time ("Blue Sky Report"); and
J. from time to time such additional information regarding the Fund's
financial condition or the financial condition of a Series of Shares as AMT
Capital may reasonably request.
4. Duties of AMT Capital
AMT Capital shall act as agent for the distribution of, and shall use
appropriate efforts to solicit orders to purchase Shares of each Series. AMT
Capital agrees that all solicitations of orders to purchase and all sales of
Shares of each Series shall be made in accordance with the Charter, By-Laws,
and the Registration Statement, to the extent such documents have been provided
to AMT Capital, and in accordance with the Prospectus and the SAI, and shall not
at any time or in any manner violate any provisions of the laws of the United
States or of any state or other jurisdiction in which solicitations are then
being made, or of any rules and regulations made or adopted by duly authorized
agencies thereunder, including without limitation those promulgated by the U.S.
Securities and Exchange Commission (the "SEC") and the NASD; provided that AMT
Capital shall not be deemed to have violated any state securities laws if it has
acted in good faith and in accordance with the Blue Sky Report.
AMT Capital will transmit any orders received by it for purchase or
redemption of Shares of any Series to the transfer agent and custodian for
that Series.
AMT Capital acknowledges that the only information provided to it by the
Fund is that contained in the Registration Statement, the Prospectus, the SAI,
and reports and financial information referred to in Section 2 herein. Neither
AMT Capital nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in such
documents and any sales literature or advertisements approved by appropriate
representatives of the Fund.
AMT Capital may undertake or arrange for such advertising and promotion
as it believes reasonable in connection with the solicitation of orders to
purchase Shares; provided, however, that it shall provide the Fund with and
obtain the Fund's approval of copies of any advertising and promotional
materials approved, produced or used by AMT Capital prior to their use. AMT
Capital shall file such materials with the SEC and the NASD to the extent
required by the 1934 Act and the 1940 Act and the rules and regulations
thereunder, and by the rules of the NASD.
In carrying out its obligations hereunder, AMT Capital shall take, on
behalf of the Fund, all actions which appear to the Fund necessary to carry
into effect the distribution of the Shares of each Series.
5. Distribution of Shares of each Series
The price at which Shares of each Series may be sold shall be the net
asset value per Share of such Series computed in the manner set forth in the
Fund's Prospectus and SAI in effect at the time of sale of the Shares of such
Series.
It is mutually understood and agreed that AMT Capital does not undertake
to sell all or any specific portion of the Shares of any Series. The Fund
shall not sell Shares of any Series except through AMT Capital, except that
the Fund may issue Shares of any Series at their net asset value to any
shareholder of the Fund (i) purchasing Shares with dividends or other
distributions received from the Fund pursuant to an offer made to all
shareholders, (ii) in connection with a pro rata distribution directly to the
shareholders of any Series, and (iii) otherwise in accordance with any then-
current Prospectus of the Fund. In addition, the Fund may issue Shares in
connection with the merger or consolidation of any other investment company or
series thereof with the Fund or one of its Series, or in connection with its
acquisition, by purchase or otherwise, of all or substantially all of the assets
of any investment company or series thereof or all or substantially all of the
outstanding shares of any such company or series thereof. Without limitation
of the foregoing, the phrase "any investment company" as used in this paragraph
shall include any private investment company organized as a limited partnership
or other entity.
AMT Capital may, and when requested by the Fund shall, suspend its efforts
to effectuate sales of Shares of any Series at any time when in the opinion
of AMT Capital or of the Fund no sales should be made because of market or
other economic considerations or abnormal circumstances of any kind. The Fund
may withdraw the offering of Shares of any Series at any time with or without
the consent of AMT Capital and shall withdraw the offering of Shares of any
Series when so required by the provisions of any statute or of any order, rule
or regulation of any governmental body having jurisdiction.
Whenever in the judgment of the Fund's officers such action is warranted
by unusual market, economic or political conditions, or by abnormal
circumstances of any kind, the Fund's officers may decline to accept any orders
for, or make any sales of the Shares of any Series until such time as those
officers deem it advisable to accept such orders and to make such sales. In
the event of such suspension of sales and until AMT Capital receives written
notification from the Fund that AMT Capital may resume accepting orders for and
making sales of the Shares of such Series, AMT Capital's duty to distribute
Shares of such Series shall be suspended.
AMT Capital will act only on its own behalf as principal if it chooses to
enter into selling arrangements with selected dealers or others.
6. Effectiveness of Registration
None of the Shares of any Series shall be offered by either AMT Capital or
the Fund under any of the provisions of this Agreement and no orders for the
purchase or sale of the Shares of any Series shall be accepted by the Fund if
and so long as the effectiveness of the Registration Statement then in effect
or any necessary amendments thereto shall be suspended under any of the
provisions of the 1933 Act or if and so long as a current Prospectus as required
by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided,
however, that nothing contained in this paragraph shall in any way restrict or
have application to or bearing upon the Fund's obligation to repurchase Shares
of any Series from any shareholder in accordance with the provisions of the
Prospectus, SAI, or Charter.
The Fund agrees to advise AMT Capital as soon as reasonably practicable
in writing:
(a) of any request by the SEC for amendments to the Registration Statement,
Prospectus or SAI then in effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement, Prospectus or SAI then in
effect or the initiation by service of process on the Fund of any proceeding
for that purpose; and
(c) of the happening of any event that makes untrue any statement of a
material fact made in the Registration Statement, Prospectus or SAI then in
effect or that requires the making of a change in such Registration Statement,
Prospectus or SAI in order to make the statement therein not misleading in any
material respect.
For the purpose of this Section, informal requests by or action of the staff
of the SEC shall not be deemed requests by or actions of the SEC.
7. Expenses
The expenses connected with the Fund shall be allocable between the Fund
and AMT Capital as follows:
(a) AMT Capital shall furnish, at its expense and without cost to the
Fund, the services of personnel to the extent that such services are required
to carry out its obligations under this Agreement.
(b) The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including, with limitation: the fees of the Fund's
investment adviser; the charges and expenses of any registrar, any custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer, dividend or accounting
agent or agents appointed by the Fund; the fees of any Fund administrator;
brokers' commissions chargeable to the Fund in connection with portfolio
securities transactions to which the Fund is a party; any fee paid pursuant to
any distribution plan, if and when adopted by the Fund pursuant to Rule 12b-1
under the 1940 Act; all taxes, including securities issuance and initial
transfer taxes, and corporate fees payable by the Fund to federal, state or
other governmental agencies; all costs and expenses in connection with the
organization of the Fund and the Series and the registration of the Shares with
the SEC and under state securities laws and in connection with maintenance of
registration of the Fund, Series and the Shares with the SEC and various states
and other jurisdictions (including filing fees and legal fees and disbursements
of counsel); the expenses of printing, including printing setup charges, and
distributing Prospectuses and SAIs of the Fund and supplements thereto to the
Fund's shareholders; all expenses of shareholders' and Directors' meetings and
of preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Directors who are not interested
persons (as such term is defined in the 1940 Act) of the Fund ("Non-Interested
Directors") or members of any advisory board or committee established by the
Non-Interested Directors; all expenses incident to the payment of any
dividend, distribution, withdrawal or redemption, whether in Shares or in
cash; charges and expenses of any outside service used for pricing of the
Fund's Shares; charges and expenses of legal counsel to the Fund and to the
Non-Interested Directors, and of independent accountants to the Fund, in
connection with any matter relating to the Fund; membership dues paid by the
Fund to industry associations; interest payable on Fund borrowings; postage;
insurance premiums on property or personnel (including officers and directors)
of the Fund which inure to its benefit; extraordinary expenses of the Fund
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto); and all other charges and
costs of the Fund's operation unless otherwise explicitly provided herein.
8. Indemnity by Fund
The Fund agrees to indemnify and hold AMT Capital, its officers and directors
and each person (if any) who controls AMT Capital within the meaning of Section
15 of the 1933 Act harmless from and against any losses, claims, damages or
liabilities to which any of such persons may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus, or the SAI or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
any material respect, and will reimburse such persons for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim; provided, however, that the Fund shall not
be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Prospectus or the SAI in reliance upon and in conformity with
written information furnished to the Fund by AMT Capital expressly for use
therein. AMT Capital, its officers, directors and control persons shall be
entitled to advances from the Fund for payment of the reasonable expenses
incurred by it or them in connection with the matter as to which it or they
are seeking indemnification in the manner and to the fullest extent permissible
under the Maryland General Corporation law.
AMT Capital agrees that, promptly upon its receipt of notice of the
commencement of any action against AMT Capital, its officers and/or directors
or against any person so controlling AMT Capital, in respect of which
indemnity or reimbursement may be sought from the Fund on account of its
agreement in the preceding paragraph, notice in writing will be given to the
Fund within 10 days after the summons or other first legal process shall have
been served. The failure to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to the person
against whom such action is brought other than by reason of the indemnity
agreement contained in this Section 7. Thereupon, the Fund shall be entitled
to participate, to the extent that it shall wish (including the selection of
counsel with AMT Capital's reasonable approval), in defense thereof. In the
event the Fund elects to assume the defense of any such suit and retain
counsel of good standing reasonably approved by AMT Capital, the defendant or
defendants in such suit shall bear the expense of any additional counsel
retained by any of them; but in the case the Fund does not elect to assume the
defense of any such suit or in the case AMT Capital does not reasonably
approve of counsel chosen by the Fund, the Fund will reimburse AMT Capital,
its officers and directors or the controlling person or persons named as
defendant or defendants in such suit for the fees and expenses of any one
counsel or firm which may be retained on behalf of AMT Capital, its officers
and directors and such control persons.
In the event that any such claim for indemnification is made by any
director or person in control of AMT Capital who is also an officer or
director of the Fund, the Fund, at its expense to the extent permitted by law,
will submit to a court of appropriate jurisdiction the question of whether or
not indemnification by it is against public policy as expressed in the 1933
Act, the 1934 Act, and the 1940 Act, and the Fund and AMT Capital will be
governed by the final adjudication of such question.
The Fund's indemnification agreement contained in this Section and the
Fund's representations and warranties in this Agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of AMT Capital, its officers and directors or any control person and
shall survive the sale of any of the Shares made pursuant to this Agreement.
This agreement of indemnity will inure exclusively to the benefit of AMT
Capital, its officers, directors and control persons, and to the extent
permitted by the 1940 Act to the benefit of any of their successors and
assigns. The Fund agrees promptly to notify AMT Capital of the commencement
of any litigation or proceeding against the Fund in connection with the issue
and sale of any Shares.
9. Indemnity by AMT Capital
AMT Capital agrees to indemnify and hold harmless the Fund, its officers
and directors and persons who control the Fund with the meaning of Section 15
of the 1933 Act from and against any losses, claims, damages or liabilities to
which any of such persons may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof), arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, or the SAI or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in any
material respect, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Prospectus or the SAI in
reliance upon and in conformity with written information furnished to the Fund
by AMT Capital expressly for use therein; and will reimburse such persons for
any legal or other expenses reasonably incurred by the Fund in connection with
investigating or defending any such action or claim. AMT Capital also agrees
to indemnify and hold harmless the Fund, its officers and directors and
control persons from and against any and all losses, claims, damages and
liabilities arising by reason of any person acquiring any Shares, which may be
based upon the 1933 Act or any other statute or at common law, on account of
any unauthorized or wrongful sales activities of AMT Capital or any of its
registered representatives, as defined under the By-Laws of the NASD,
including any failure to conform with any requirement of any state and federal
law relating to the sale of such Shares. Notwithstanding anything contained
herein to the contrary, AMT Capital shall not be responsible to the Fund for
and shall not indemnify and hold harmless the Fund, its officers and directors
and control persons from and against any such losses, claims, damages or
liabilities arising solely as a result of actions taken or omitted by AMT
Capital in good faith reliance on, and in conformity with, the Blue Sky
Report.
AMT Capital shall also indemnify and hold harmless the Fund, its officers
and directors and control persons for any liability to the Fund or to the
holders of Shares by reason of AMT Capital's willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
The Fund, its officers, directors and control persons shall be entitled
to advances from AMT Capital for payment of the reasonable expenses incurred
by it or them in connection with the matters as to which it or they are
seeking indemnification in the manner and to the fullest extent permissible
under the Delaware General Corporation Law.
In case any action shall be brought against the Fund, its officers and
directors and control persons in respect of which it may seek indemnity or
reimbursement from AMT Capital on account of the agreement of AMT Capital
contained in this Section 8, AMT Capital shall have the rights and duties
given to the Fund, and the Fund, its officers and directors and control
persons shall have the rights and duties given to AMT Capital in the second
and third paragraphs of Section 7.
AMT Capital's indemnification agreement contained in this Section and
its representations and warranties in this Agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Fund, its officers and directors or any control person and shall
survive the sale of any of the Shares made pursuant to this Agreement. This
agreement of indemnity will inure exclusively to the benefit of the Fund, its
officers, directors and control persons, to the extent permitted by the 1940
Act to the benefit of any of their successors and assigns. AMT Capital agrees
promptly to notify the Fund of the commencement of any litigation or
proceeding against AMT Capital in connection with the issue and sale of any
Shares.
10. Services Not Exclusive
AMT Capital shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided herein or authorized by the Fund from time
to time, have no authority to act or represent the Fund in any way or otherwise
be deemed an agent of the Fund.
Nothing herein shall be deemed to limit or restrict AMT Capital's right
or that of any of its affiliates or employees, to engage in any other business
or to devote time and attention to the distribution or other related aspects
of any other registered investment company or to render services of any kind
to any other corporation, firm, individual or association.
11. Term
This Agreement shall become effective at the close of business on the
date hereof and shall continue in full force and effect, subject to Section 13
hereof, for two years and thereafter as provided in Section 11 hereof.
12. Renewal
This Agreement shall continue in full force and effect from year to year
with respect to a Series, provided that such continuance is specifically
approved at least annually:
(a) (i) by the Fund's Board of Directors or (ii) by the vote of a majority
of the outstanding voting securities (as defined in Section 2(a)(42) of the
1940 Act) that constitute Shares of such Series; and
(b) by the affirmative vote of a majority of the Non-Interested Directors
of the Fund by votes cast in person at a meeting specifically called for the
purpose of voting on such approval.
13. Amendment
This Agreement may be amended by the parties hereto with respect to a Series
only if such amendment is specifically approved (i) by the Board of Directors
of the Fund or by the vote of a majority of outstanding Shares, and (ii) by a
majority of the Non-Interested Directors of the Fund, which vote must be cast in
person at a meeting called for the purpose of voting on such approval.
14. Termination
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of the Fund's Board of Directors, by vote of a majority of
outstanding Shares (as defined in Section 2(a)(42) of the 1940 Act), or by AMT
Capital, on sixty (60) days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for this purpose having the meaning defined in Section 2(a)(4) of
the 1940 Act.
15. Confidentiality
AMT Capital agrees on behalf of itself and its directors, officers and
employees to treat confidentially and as proprietary information of the Fund
all records and other information relative to the Fund and its prior, present
or potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities hereunder, except (i)
after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld when requested to divulge such
information by duly constituted authorities and may not be withheld where AMT
Capital would be exposed to civil or criminal contempt proceedings for failure
to comply, and AMT Capital shall disclose all such records and information to
the investment adviser to the Fund when so requested by the adviser or the Fund.
16. Notices
Any notice or other communication authorized or required hereunder shall
be in writing or by confirming telegram, cable, telex or facsimile sending
device. Notice shall be addressed to the Fund at 50 Division Street, Suite
401, Somerville, New Jersey 08876, Attention: President; and to AMT Capital
Services, Inc., 600 Fifth Avenue, 26th Floor, New York, New York 10020,
Attention: Carla E. Dearing. Either party may designate a different address
by notice to the other party. Any such notice or other communication shall be
deemed given when actually received.
17. Interpretation: Governing Law
Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any
such court, by rules, regulations or orders of the SEC issued pursuant to the
1940 Act. In addition, where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is revised by rule, regulation or
order of the SEC, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. Otherwise, the provisions of this Agreement
shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: HARDING, LOEVNER FUNDS, INC.
BY:___________________ BY:_______________________
David R. Loevner
Secretary President
ATTEST: AMT CAPITAL SERVICES, INC.
BY:___________________ BY:_______________________
William E. Vastardis Carla E. Dearing
Senior Vice President President
IBT draft 8/28/96
Form Agreement
Full Custody/Foreign Securities
(Yield Calculation)
Company Form (Series)
CUSTODIAN AGREEMENT
BETWEEN
Harding, Loevner Funds, Inc.
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
Page
1. Bank Appointed Custodian 1
2. Definitions 1
2.1 Authorized Person 1
2.2 Board 1
2.3 Security 1
2.4 Portfolio Security 1
2.5 Officers' Certificate 1
2.6 Book-Entry System 2
2.7 Depository 2
2.8 Proper Instructions 2
3. Separate Accounts 2
4. Certification as to Authorized Persons 2
5. Custody of Cash 3
5.1 Purchase of Securities 3
5.2 Redemptions 3
5.3 Distributions and Expenses of Fund 3
5.4 Payment in Respect of Securities 3
5.5 Repayment of Loans 3
5.6 Repayment of Cash 3
5.7 Foreign Exchange Transactions 4
5.8 Other Authorized Payments 4
5.9 Termination 4
6. Securities 4
6.1 Segregation and Registration 4
6.2 Voting and Proxies 5
6.3 Corporate Action 5
6.4 Book-Entry System 6
6.5 Use of a Depository 6
6.6 Use of Book-Entry System for Commercial Paper 7
6.7 Use of Immobilization Programs 8
6.8 Eurodollar CDs 8
6.9 Options and Futures Transactions 8
(a) Puts and Calls Traded on Securities Exchanges,
NASDAQ or Over-the-Counter 8
(b) Puts, Calls, and Futures Traded
on Commodities Exchanges 9
6.10 Segregated Account 9
6.11 Interest Bearing Call or Time Deposits 10
6.12 Transfer of Securities 10
7. Redemptions 12
8. Merger, Dissolution, etc. of Fund 12
9. Actions of Bank Without Prior Authorization 12
10. Collection and Defaults 13
11. Maintenance of Records and Accounting Services 13
12. Fund Evaluation and Yield Calculation 13
12.1 Fund Evaluation 13
12.2 Yield Calculation 14
13. Additional Services 15
14. Duties of the Bank 15
14.1 Performance of Duties and
Standard of Care 15
14.2 Agents and Subcustodians with Respect to Property
of the Fund Held in the United States 15
14.3 Duties of the Bank with Respect to Property
Held Outside of the United States 16
14.4 Insurance 18
14.5 Fees and Expenses of Bank 18
14.6 Advances by Bank 18
15. Limitation of Liability 19
16. Termination 20
17. Confidentiality 21
18. Notices 21
19. Amendments 21
20. Parties 21
21. Governing Law 22
22. Counterparts 22
23. Entire Agreement 22
APPENDICES
Appendix A Fee Schedule
Appendix B Wire Transfer Agreement
Appendix C Additional Services
Appendix D Select Foreign Sub-Custodians
Appendix E Reports
CUSTODIAN AGREEMENT
AGREEMENT made as of this first day of October, 1996, between Harding,
Loevner Funds, Inc. a company organized under the laws of [ ] (the
"Fund") and INVESTORS BANK & TRUST COMPANY (the "Bank").
The Fund, an open-end management investment company, desires to place
and maintain all of its portfolio securities and cash in the custody of the
Bank. The Bank has at least the minimum qualifications required by Section
17(f)(1) of the Investment Company Act of 1940 (the "1940 Act") to act as
custodian of the portfolio securities and cash of the Fund, and has indicated
its willingness to so act, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth. For the services rendered pursuant to this
Agreement the Fund agrees to pay to the Bank the fees set forth on Appendix A
hereto.
2. Definitions. Whenever used herein, the terms listed below will have
the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the
persons duly authorized to give Proper Instructions or otherwise act on
behalf of the Fund by appropriate resolution of its Board, and set forth in a
certificate as required by Section 4 hereof.
2.2 Board. Board will mean the Board of Directors or the Board of
Trustees of the Fund, as the case may be.
2.3 Security. The term security as used herein will have the same
meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security, certificate of deposit,
or group or index of securities (including any interest therein or based on
the value thereof), or any put, call, straddle, option, or privilege entered
into on a national securities exchange relating to a foreign currency, or, in
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to, or
option contract to purchase or sell any of the foregoing, and futures,
forward contracts and options thereon.
2.4 Portfolio Security. Portfolio Security will mean any security
owned by the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Fund.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank,
its successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934
("Exchange Act"), its successor or successors and its nominee or nominees.
The term "Depository" shall further mean and include any other person
authorized to act as a depository under the 1940 Act, its successor or
successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized
Person, such instructions to be given in such form and manner as the Bank and
the Fund shall agree upon from time to time, and (ii) instructions (which may
be continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions
if the Bank reasonably believes them to have been given by an Authorized
Person. The Fund shall cause all oral instructions to be promptly confirmed
in writing. The Bank shall act upon and comply with any subsequent Proper
Instruction which modifies a prior instruction and the sole obligation of the
Bank with respect to any follow-up or confirmatory instruction shall be to
make reasonable efforts to detect any discrepancy between the original
instruction and such confirmation and to report such discrepancy to the Fund.
The Fund shall be responsible, at the Fund's expense, for taking any action,
including any reprocessing, necessary to correct any such discrepancy or
error, and to the extent such action requires the Bank to act, the Fund shall
give the Bank specific Proper Instructions as to the action required. Upon
receipt by the Bank of an Officers' Certificate as to the authorization by
the Board accompanied by a detailed description of procedures approved by the
Fund, Proper Instructions may include communication effected directly between
electro-mechanical or electronic devices provided that the Board and the Bank
agree in writing that such procedures afford adequate safeguards for the
Fund's assets.
3. Separate Accounts. If the Fund has more than one series or
portfolio, the Bank will segregate the assets of each series or portfolio to
which this Agreement relates into a separate account for each such series or
portfolio containing the assets of such series or portfolio (and all
investment earnings thereon). Unless the context otherwise requires, any
reference in this Agreement to any actions to be taken by the Fund shall be
deemed to refer to the Fund acting on behalf of one or more of its series,
any reference in this Agreement to any assets of the Fund, including, without
limitation, any portfolio securities and cash and earnings thereon, shall be
deemed to refer only to assets of the applicable series, any duty or
obligation of the Bank hereunder to the Fund shall be deemed to refer to
duties and obligations with respect to such individual series and any
obligation or liability of the Fund hereunder shall be binding only with
respect to such individual series, and shall be discharged only out of the
assets of such series.
4. Certification as to Authorized Persons. The Secretary or Assistant
Secretary of the Fund will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank,
of (i) the names and signatures of the Authorized Persons and (ii) the names
of the members of the Board, it being understood that upon the occurrence of
any change in the information set forth in the most recent certification on
file (including without limitation any person named in the most recent
certification who is no longer an Authorized Person as designated therein),
the Secretary or Assistant Secretary of the Fund will sign a new or amended
certification setting forth the change and the new, additional or omitted
names or signatures. The Bank will be entitled to rely and act upon any
Officers' Certificate given to it by the Fund which has been signed by
Authorized Persons named in the most recent certification received by the
Bank.
5. Custody of Cash. As custodian for the Fund, the Bank will open and
maintain a separate account or accounts in the name of the Fund or in the
name of the Bank, as Custodian of the Fund, and will deposit to the account
of the Fund all of the cash of the Fund, except for cash held by a
subcustodian appointed pursuant to Sections 14.2 or 14.3 hereof, including
borrowed funds, delivered to the Bank, subject only to draft or order by the
Bank acting pursuant to the terms of this Agreement. Pursuant to the Bank's
internal policies regarding the management of cash accounts, the Bank may
segregate certain portions of the cash of the Fund into a separate savings
deposit account upon which the Bank reserves the right to require seven (7)
days notice prior to withdrawal of cash from such an account. Upon receipt
by the Bank of Proper Instructions (which may be continuing instructions) or
in the case of payments for redemptions and repurchases of outstanding shares
of common stock of the Fund, notification from the Fund's transfer agent as
provided in Section 7, requesting such payment, designating the payee or the
account or accounts to which the Bank will release funds for deposit, and
stating that it is for a purpose permitted under the terms of this Section 5,
specifying the applicable subsection, the Bank will make payments of cash
held for the accounts of the Fund, insofar as funds are available for that
purpose, only as permitted in subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for
the Fund, against contemporaneous receipt of such securities by the Bank or
against delivery of such securities to the Bank in accordance with generally
accepted settlement practices and customs in the jurisdiction or market in
which the transaction occurs registered in the name of the Fund or in the
name of, or properly endorsed and in form for transfer to, the Bank, or a
nominee of the Bank, or receipt for the account of the Bank pursuant to the
provisions of Section 6 below, each such payment to be made at the purchase
price shown on a broker's confirmation (or transaction report in the case of
Book Entry Paper (as that term is defined in Section 6.6 hereof)) of purchase
of the securities received by the Bank before such payment is made, as
confirmed in the Proper Instructions received by the Bank before such payment
is made.
5.2 Redemptions. In such amount as may be necessary for the
repurchase or redemption of common shares of the Fund offered for repurchase
or redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Fund. For the payment on the
account of the Fund of dividends or other distributions to shareholders as
may from time to time be declared by the Board, interest, taxes, management
or supervisory fees, distribution fees, fees of the Bank for its services
hereunder and reimbursement of the expenses and liabilities of the Bank as
provided hereunder, fees of any transfer agent, fees for legal, accounting,
and auditing services, or other operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payments in connection
with the conversion, exchange or surrender of Portfolio Securities or
securities subscribed to by the Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the Fund,
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund for
the purpose of collateralizing the obligation to return to the Fund
certificates borrowed from the Fund representing Portfolio Securities, but
only upon redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions.
(a) For payments in connection with foreign exchange contracts
or options to purchase and sell foreign currencies for spot and future
delivery (collectively, "Foreign Exchange Agreements")which may be entered
into by the Bank on behalf of the Fund upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or
banking institution (which may be the Bank, or any other subcustodian or
agent hereunder, acting as principal) with which the contract or option is
made, and the Bank shall have no duty with respect to the selection of such
currency brokers or banking institutions with which the Fund deals or for
their failure to comply with the terms of any contract or option.
(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Fund agrees that the Bank shall have a continuing lien and
security interest, to the extent of any payment due under any Foreign
Exchange Agreement, in and to any property at any time held by the Bank for
the Fund's benefit or in which the Fund has an interest and which is then in
the Bank's possession or control (or in the possession or control of any
third party acting on the Bank's behalf). The Fund authorizes the Bank, in
the Bank's sole discretion, at any time to charge any such payment due under
any Foreign Exchange Agreement against any balance of account standing to the
credit of the Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions
of the Fund, or other obligations of the Fund incurred for proper Fund
purposes; provided that before making any such payment the Bank will also
receive a certified copy of a resolution of the Board signed by an Authorized
Person (other than the Person certifying such resolution) and certified by
its Secretary or Assistant Secretary, naming the person or persons to whom
such payment is to be made, and either describing the transaction for which
payment is to be made and declaring it to be an authorized transaction of the
Fund, or specifying the amount of the obligation for which payment is to be
made, setting forth the purpose for which such obligation was incurred and
declaring such purpose to be a proper corporate purpose.
5.9 Termination: Upon the termination of this Agreement as
hereinafter set forth pursuant to Section 8 and Section 16 of this Agreement.
In connection with transfers or orders made by the Bank pursuant to
this Section 5, and otherwise under this Agreement, the Fund and the Bank
shall enter into a Wire Transfer Agreement substantially in the form attached
as Appendix B hereto.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided
herein, and except for securities to be delivered to any subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian
will receive and hold pursuant to the provisions hereof, in a separate
account or accounts and physically segregated at all times from those of
other persons, any and all Portfolio Securities which may now or hereafter be
delivered to it by or for the account of the Fund. All such Portfolio
Securities will be held or disposed of by the Bank for, and subject at all
times to, the instructions of the Fund pursuant to the terms of this
Agreement. Subject to the specific provisions herein relating to Portfolio
Securities that are not physically held by the Bank, the Bank will register
all Portfolio Securities (unless otherwise directed by Proper Instructions or
an Officers' Certificate), in the name of a registered nominee of the Bank as
defined in the Internal Revenue Code and any Regulations of the Treasury
Department issued thereunder, and will execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state.
The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or
to register in the name of its registered nominee, any Portfolio Securities
which may from time to time be registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the
Bank will vote any of the Portfolio Securities held hereunder, except in
accordance with Proper Instructions or an Officers' Certificate. The Bank
will execute and deliver, or cause to be executed and delivered, to the Fund
all notices, proxies and proxy soliciting materials delivered to the Bank
with respect to such Securities, such proxies to be executed by the
registered holder of such Securities (if registered otherwise than in the
name of the Fund), but without indicating the manner in which such proxies
are to be voted.
6.3 Corporate Action. If at any time the Bank is notified that
an issuer of any Portfolio Security has taken or intends to take a corporate
action (a "Corporate Action") that affects the rights, privileges, powers,
preferences, qualifications or ownership of a Portfolio Security, including
without limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or
stock dividend, which Corporate Action requires an affirmative response or
action on the part of the holder of such Portfolio Security (a "Response"),
the Bank shall notify the Fund promptly of the Corporate Action, the Response
required in connection with the Corporate Action and the Bank's deadline for
receipt from the Fund of Proper Instructions regarding the Response (the
"Response Deadline"). The Bank shall forward to the Fund via telecopier
and/or overnight courier all notices, information statements or other
materials relating to the Corporate Action within twenty-four (24) hours of
receipt of such materials by the Bank.
(a) The Bank shall act upon a required Response only after
receipt by the Bank of Proper Instructions from the Fund no later than 5:00
p.m. on the date specified as the Response Deadline and only if the Bank (or
its agent or subcustodian hereunder) has actual possession of all necessary
Securities, consents and other materials no later than 5:00 p.m. on the date
specified as the Response Deadline.
(b) The Bank shall have no duty to act upon a required Response
if Proper Instructions relating to such Response and all necessary
Securities, consents and other materials are not received by and in the
possession of the Bank no later than 5:00 p.m. on the date specified as the
Response Deadline. Notwithstanding, the Bank may, in its sole discretion,
use its best efforts to act upon a Response for which Proper Instructions
and/or necessary Securities, consents or other materials are received by the
Bank after 5:00 p.m. on the date specified as the Response Deadline, it being
acknowledged and agreed by the parties that any undertaking by the Bank to
use its best efforts in such circumstances shall in no way create any duty
upon the Bank to complete such Response prior to its expiration.
(c) In the event that the Fund notifies the Bank of a Corporate
Action requiring a Response and the Bank has received no other notice of such
Corporate Action, the Response Deadline shall be 48 hours prior to the
Response expiration time set by the depository processing such Corporate
Action.
(d) Section 14.3(g) of this Agreement shall govern any Corporate Action
involving Foreign Portfolio Securities held by a Selected Foreign Sub-Custodian.
6.4 Book-Entry System. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits
of Fund assets in the Book-Entry System, and (ii) for any subsequent changes
to such arrangements following such approval, the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Board has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry
System provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect
to the Fund's participation in the Book-Entry System through the Bank (or any
such agent) will identify by book entry the Portfolio Securities which are
included with other securities deposited in the Account and shall at all
times during the regular business hours of the Bank (or such agent) be open
for inspection by duly authorized officers, employees or agents of the Fund.
Where securities are transferred to the Fund's account, the Bank shall also,
by book entry or otherwise, identify as belonging to the Fund a quantity of
securities in a fungible bulk of securities (i) registered in the name of the
Bank or its nominee, or (ii) shown on the Bank's account on the books of the
Federal Reserve Bank;
(c) The Bank (or its agent) shall pay for securities purchased
for the account of the Fund or shall pay cash collateral against the return
of Portfolio Securities loaned by the Fund upon (i) receipt of advice from
the Book-Entry System that such Securities have been transferred to the
Account, and (ii) the making of an entry on the records of the Bank (or its
agent) to reflect such payment and transfer for the account of the Fund. The
Bank (or its agent) shall transfer securities sold or loaned for the account
of the Fund upon
(i) receipt of advice from the Book-Entry System that
payment for securities sold or payment of the initial cash collateral against
the delivery of securities loaned by the Fund has been transferred to the
Account; and
(ii) the making of an entry on the records of the Bank (or
its agent) to reflect such transfer and payment for the account of the Fund.
Copies of all advices from the Book-Entry System of transfers of securities
for the account of the Fund shall identify the Fund, be maintained for the
Fund by the Bank and shall be provided to the Fund at its request. The Bank
shall send the Fund a confirmation, as defined by Rule 17f-4 of the 1940 Act,
of any transfers to or from the account of the Fund;
(d) The Bank will promptly provide the Fund with any report
obtained by the Bank or its agent on the Book-Entry System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Book-Entry System;
6.5 Use of a Depository. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits
in DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities including
stock dividends, rights and other items of like nature, and to receive and
remit to the Bank on behalf of the Fund all income and other payments thereon
and to take all steps necessary and proper in connection with the collection
thereof;
(b) Registration of Portfolio Securities may be made in the
name of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made
through the clearing medium employed by such Depository for transactions of
participants acting through it. Upon any purchase of Portfolio Securities,
payment will be made only upon delivery of the securities to or for the
account of the Fund and the Fund shall pay cash collateral against the return
of Portfolio Securities loaned by the Fund only upon delivery of the
Securities to or for the account of the Fund; and upon any sale of Portfolio
Securities, delivery of the Securities will be made only against payment
therefor or, in the event Portfolio Securities are loaned, delivery of
Securities will be made only against receipt of the initial cash collateral
to or for the account of the Fund; and
(d) The Bank shall use its best efforts to provide that:
(i) The Depository obtains replacement of any
certificated Portfolio Security deposited with it in the event such Security
is lost, destroyed, wrongfully taken or otherwise not available to be
returned to the Bank upon its request;
(ii) Proxy materials received by a Depository with respect
to Portfolio Securities deposited with such Depository are forwarded
immediately to the Bank for prompt transmittal to the Fund;
(iii) Such Depository promptly forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to the Fund's account;
(iv) Such Depository prepares and delivers to the Bank
such records with respect to the performance of the Bank's obligations and
duties hereunder as may be necessary for the Fund to comply with the
recordkeeping requirements of Section 31(a) of the 1940 Act and Rule 31(a)
thereunder; and
(v) Such Depository delivers to the Bank all internal
accounting control reports, whether or not audited by an independent public
accountant, as well as such other reports as the Fund may reasonably request
in order to verify the Portfolio Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i)
the Bank has received a certified copy of a resolution of the Board
specifically approving participation in a system maintained by the Bank for
the holding of commercial paper in book-entry form ("Book-Entry Paper") and
(ii) for each year following such approval the Board has received and
approved the arrangements, upon receipt of Proper Instructions and upon
receipt of confirmation from an Issuer (as defined below) that the Fund has
purchased such Issuer's Book-Entry Paper, the Bank shall issue and hold in
book-entry form, on behalf of the Fund, commercial paper issued by issuers
with whom the Bank has entered into a book-entry agreement (the "Issuers").
In maintaining procedures for Book-Entry Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by the
Fund in an account of the Bank that includes only assets held by it for
customers;
(b) The records of the Bank with respect to the Fund's purchase
of Book-Entry Paper through the Bank will identify, by book-entry, commercial
paper belonging to the Fund which is included in the Book-Entry System and
shall at all times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the Fund;
(c) The Bank shall pay for Book-Entry Paper purchased for the
account of the Fund upon contemporaneous (i) receipt of advice from the
Issuer that such sale of Book-Entry Paper has been effected, and (ii) the
making of an entry on the records of the Bank to reflect such payment and
transfer for the account of the Fund;
(d) The Bank shall cancel such Book-Entry Paper obligation upon
the maturity thereof upon contemporaneous (i) receipt of advice that payment
for such Book-Entry Paper has been transferred to the Fund, and (ii) the
making of an entry on the records of the Bank to reflect such payment for the
account of the Fund; and
(e) The Bank will send to the Fund such reports on its system
of internal accounting control with respect to the Book-Entry Paper as the
Fund may reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated
by a bank which meets the requirements of Section 26(a)(1) of the 1940 Act,
and (ii) for each year following such approval the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Board has withdrawn its approval, the Bank shall
enter into such immobilization program with such bank acting as a subcustodian
hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar
CDs may be physically held by the European branch of the U.S. banking
institution that is the issuer of such Eurodollar CD (a "European Branch"),
provided that such Portfolio Securities are identified on the books of the
Bank as belonging to the Fund and that the books of the Bank identify the
European Branch holding such Portfolio Securities. Notwithstanding any other
provision of this Agreement to the contrary, except as stated in the first
sentence of this subsection 6.8, the Bank shall be under no other duty with
respect to such Eurodollar CDs belonging to the Fund.
6.9 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or Over-the-
Counter.
(i) The Bank shall take action as to put options ("puts")
and call options ("calls") purchased or sold (written) by the Fund regarding
escrow or other arrangements (i) in accordance with the provisions of any
agreement entered into upon receipt of Proper Instructions among the Bank,
any broker-dealer registered with the National Association of Securities
Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating to the
compliance with the rules of the Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations.
(ii) Unless another agreement requires it to do so, the
Bank shall be under no duty or obligation to see that the Fund has deposited
or is maintaining adequate margin, if required, with any broker in connection
with any option, nor shall the Bank be under duty or obligation to present
such option to the broker for exercise unless it receives Proper Instructions
from the Fund. The Bank shall have no responsibility for the legality of any
put or call purchased or sold on behalf of the Fund, the propriety of any
such purchase or sale, or the adequacy of any collateral delivered to a
broker in connection with an option or deposited to or withdrawn from a
Segregated Account (as defined in subsection 6.10 below). The Bank
specifically, but not by way of limitation, shall not be under any duty or
obligation to: (i) periodically check or notify the Fund that the amount of
such collateral held by a broker or held in a Segregated Account is
sufficient to protect such broker or the Fund against any loss; (ii) effect
the return of any collateral delivered to a broker; or (iii) advise the Fund
that any option it holds, has or is about to expire. Such duties or
obligations shall be the sole responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action as to puts, calls and
futures contracts ("Futures") purchased or sold by the Fund in accordance
with the provisions of any agreement entered into upon the receipt of Proper
Instructions among the Fund, the Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any Contract Market,
or any similar organization or organizations, regarding account deposits in
connection with transactions by the Fund.
(ii) The responsibilities of the Bank as to futures, puts
and calls traded on commodities exchanges, any Futures Commission Merchant
account and the Segregated Account shall be limited as set forth in
subparagraph (a)(2) of this Section 6.8 as if such subparagraph referred to
Futures Commission Merchants rather than brokers, and Futures and puts and
calls thereon instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for and
on behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account upon receipt of Proper Instructions in the following
circumstances:
(i) in accordance with the provisions of any agreement
among the Fund, the Bank and a broker-dealer registered under the Exchange
Act and a member of the NASD or any Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange or the Commodity Futures Trading Commission or any registered
Contract Market, or of any similar organizations regarding escrow or other
arrangements in connection with transactions by the Fund;
(ii) for the purpose of segregating cash or securities in
connection with options purchased or written by the Fund or commodity futures
purchased or written by the Fund;
(iii) for the deposit of liquid assets, such as cash, U.S.
Government securities or other high grade debt obligations, having a market
value (marked to market on a daily basis) at all times equal to not less
than the aggregate purchase price due on the settlement dates of all the
Fund's then outstanding forward commitment or "when-issued" agreements
relating to the purchase of Portfolio Securities and all the Fund's then
outstanding commitments under reverse repurchase agreements entered into with
broker-dealer firms;
(iv) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;
(v) for other proper corporate purposes, but only, in the
case of this clause (e), upon receipt of, in addition to Proper Instructions,
a certified copy of a resolution of the Board, or of the executive committee
of the Board signed by an officer of the Fund and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes of such
Segregated Account and declaring such purposes to be proper corporate
purposes.
(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in accordance with
the provisions of any agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such agreements;
(ii) with respect to assets deposited pursuant to (a)(iii)
or (a)(iv) above, for sale or delivery to meet the Fund's obligations under
outstanding forward commitment or when-issued agreements for the purchase of
Portfolio Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding forward
commitment or when-issued agreements for the purchase of portfolio securities
or reverse repurchase agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in
the Segregated Account;
(v) for delivery upon settlement of a forward commitment
or when-issued agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant to (e)
above, in accordance with the purposes of such account as set forth in Proper
Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Fund of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated in
such Proper Instructions. The Bank shall include in its records with respect
to the assets of the Fund appropriate notation as to the amount of each such
deposit, the banking institution with which such deposit is made (the
"Deposit Bank"), and shall retain such forms of advice or receipt evidencing
the deposit, if any, as may be forwarded to the Bank by the Deposit Bank.
Such deposits shall be deemed Portfolio Securities of the Fund and the
responsibility of the Bank therefore shall be the same as and no greater than
the Bank's responsibility in respect of other Portfolio Securities of the
Fund.
6.12 Transfer of Securities. The Bank will transfer, exchange,
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section only upon receipt
of Proper Instructions. The Proper Instructions shall state that such
transfer, exchange or delivery is for a purpose permitted under the terms of
this Section 6.11, and shall specify the applicable subsection, or describe
the purpose of the transaction with sufficient particularity to permit the
Bank to ascertain the applicable subsection. After receipt of such Proper
Instructions, the Bank will transfer, exchange, deliver or release Portfolio
Securities only in the following circumstances:
(a) Upon sales of Portfolio Securities for the account of the
Fund, against contemporaneous receipt by the Bank of payment therefor in
full, or against payment to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs, each such payment to be in the amount of the sale price
shown in a broker's confirmation of sale received by the Bank before such
payment is made, as confirmed in the Proper Instructions received by the Bank
before such payment is made;
(b) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of subscription,
purchase or sale or other similar rights represented by such Portfolio
Securities, or for the purpose of tendering shares in the event of a tender
offer therefor, provided, however, that in the event of an offer of exchange,
tender offer, or other exercise of rights requiring the physical tender or
delivery of Portfolio Securities, the Bank shall have no liability for
failure to so tender in a timely manner unless such Proper Instructions are
received by the Bank at least two business days prior to the date required
for tender, and unless the Bank (or its agent or subcustodian hereunder) has
actual possession of such Security at least two business days prior to the
date of tender;
(c) Upon conversion of Portfolio Securities pursuant to their terms
into other securities;
(d) For the purpose of redeeming in-kind shares of the Fund upon
authorization from the Fund;
(e) In the case of option contracts owned by the Fund, for presentation
to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed or retired or
otherwise become payable;
(g) For the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to the Fund
by any bank, including the Bank; provided, however, that such Portfolio
Securities will be released only upon payment to the Bank for the account of
the Fund of the moneys borrowed, provided further, however, that in cases
where additional collateral is required to secure a borrowing already made,
and such fact is made to appear in the Proper Instructions, Portfolio
Securities may be released for that purpose without any such payment. In the
event that any pledged Portfolio Securities are held by the Bank, they will
be so held for the account of the lender, and after notice to the Fund from
the lender in accordance with the normal procedures of the lender and any
loan agreement between the fund and the lender that an event of deficiency or
default on the loan has occurred, the Bank may deliver such pledged Portfolio
Securities to or for the account of the lender;
(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of the fair
market value of such security, as set forth in the Proper Instructions
received by the Bank before such payment is made;
(i) for the purpose of delivering securities lent by the Fund
to a bank or broker dealer, but only against receipt in accordance with
street delivery custom except as otherwise provided herein, of adequate
collateral as agreed upon from time to time by the Fund and the Bank, and
upon receipt of payment in connection with any repurchase agreement relating
to such securities entered into by the Fund;
(j) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer, the
Bank will also receive a certified copy of resolutions of the Board, signed
by an authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to
be an authorized transaction of the Fund or such purpose to be a proper
corporate purpose, and naming the person or persons to whom delivery of such
securities shall be made; and
(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.
7. Redemptions. In the case of payment of assets of the Fund held by
the Bank in connection with redemptions and repurchases by the Fund of
outstanding common shares, the Bank will rely on notification by the Fund's
transfer agent of receipt of a request for redemption and certificates, if
issued, in proper form for redemption before such payment is made. Payment
shall be made in accordance with the Articles of Incorporation or Declaration
of Trust and By-laws of the Fund (the "Articles"), from assets available for
said purpose.
8. Merger, Dissolution, etc. of Fund. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of
the Fund into or the consolidation of the Fund with another investment
company, the sale by the Fund of all, or substantially all, of its assets to
another investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities
held by it under this Agreement and disburse cash only upon the order of the
Fund set forth in an Officers' Certificate, accompanied by a certified copy
of a resolution of the Board authorizing any of the foregoing transactions.
Upon completion of such delivery and disbursement and the payment of the
fees, disbursements and expenses of the Bank, this Agreement will terminate
and the Bank shall be released from any and all obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an
Officers' Certificate to the contrary, the Bank will take the following
actions without prior authorization or instruction of the Fund or the
transfer agent:
9.1 Endorse for collection and collect on behalf of and in the name
of the Fund all checks, drafts, or other negotiable or transferable
instruments or other orders for the payment of money received by it for the
account of the Fund and hold for the account of the Fund all income,
dividends, interest and other payments or distributions of cash with respect
to the Portfolio Securities held thereunder;
9.2 Present for payment all coupons and other income items held by
it for the account of the Fund which call for payment upon presentation and
hold the cash received by it upon such payment for the account of the Fund;
9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Fund all necessary ownership
and other certificates and affidavits required by the Internal Revenue Code
or the regulations of the Treasury Department issued thereunder, or by the
laws of any state, now or hereafter in effect, inserting the Fund's name on
such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so and as may be required to obtain payment in
respect thereof. The Bank will execute and deliver such certificates in
connection with Portfolio Securities delivered to it or by it under this
Agreement as may be required under the provisions of the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder, or
under the laws of any State;
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it
upon payment for the account of the Fund; and
9.6 Exchange interim receipts or temporary securities for
definitive securities.
10. Collections and Defaults. The Bank will use reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of any call for
redemption, offer of exchange, right of subscription, reorganization or other
proceedings affecting such Securities. If Portfolio Securities upon which
such income is payable are in default or payment is refused after due demand
or presentation, the Bank will notify the Fund in writing of any default or
refusal to pay within two business days from the day on which it receives
knowledge of such default or refusal.
11. Maintenance of Records and Accounting Services. The Bank will
maintain records with respect to transactions for which the Bank is
responsible pursuant to the terms and conditions of this Agreement, and in
compliance with the applicable rules and regulations of the 1940 Act. The
Bank will furnish to the Fund such reports at such times as are set forth on
Appendix E hereto. The books and records of the Bank pertaining to its
actions under this Agreement and reports by the Bank or its independent
accountants concerning its accounting system, procedures for safeguarding
securities and internal accounting controls will be open to inspection and
audit at reasonable times by officers of or auditors employed by the Fund and
will be preserved by the Bank in the manner and in accordance with the
applicable rules and regulations under the 1940 Act.
The Bank shall perform fund accounting and shall keep the books of
account and render statements or copies from time to time as reasonably
requested by the Treasurer or any executive officer of the Fund.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. Fund Evaluation and Yield Calculation
12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
directed by the Board, determine as of the close of regular trading on the
New York Stock Exchange on each day on which said Exchange is open for
unrestricted trading and as of such other days, or hours, if any, as may be
authorized by the Board, the net asset value and the public offering price
of a share of capital stock of the Fund, such determination to be made in
accordance with the provisions of the Articles and By-laws of the Fund and
Prospectus and Statement of Additional Information relating to the Fund, as
they may from time to time be amended, and any applicable resolutions of the
Board at the time in force and applicable; and promptly to notify the Fund,
the proper exchange and the NASD or such other persons as the Fund may
request of the results of such computation and determination. In computing
the net asset value hereunder, the Bank may rely in good faith upon
information furnished to it by any Authorized Person in respect of (i) the
manner of accrual of the liabilities of the Fund and in respect of
liabilities of the Fund not appearing on its books of account kept by the
Bank, (ii) reserves, if any, authorized by the Board or that no such reserves
have been authorized, (iii) the source of the quotations to be used in
computing the net asset value, (iv) the value to be assigned to any security
for which no price quotations are available, and (v) the method of
computation of the public offering price on the basis of the net asset value
of the shares, and the Bank shall not be responsible for any loss occasioned
by such reliance or for any good faith reliance on any quotations received
from a source pursuant to (iii) above.
12.2. Yield Calculation. The Bank will compute the performance
results of the Fund (the "Yield Calculation") in accordance with the
provisions of Release No. 33-6753 and Release No. IC-16245 (February 2, 1988)
(the "Releases") promulgated by the Securities and Exchange Commission, and
any subsequent amendments to, published interpretations of or general
conventions accepted by the staff of the Securities and Exchange Commission
with respect to such releases or the subject matter thereof ("Subsequent
Staff Positions"), subject to the terms set forth below:
(a) The Bank shall compute the Yield Calculation for the Fund
for the stated periods of time as shall be mutually agreed upon, and
communicate in a timely manner the result of such computation to the Fund.
(b) In performing the Yield Calculation, the Bank will derive
the items of data necessary for the computation from the records it generates
and maintains for the Fund pursuant Section 11 hereof. The Bank shall have
no responsibility to review, confirm, or otherwise assume any duty or
liability with respect to the accuracy or correctness of any such data
supplied to it by the Fund, any of the Fund's designated agents or any of the
Fund's designated third party providers.
(c) At the request of the Bank, the Fund shall provide, and the
Bank shall be entitled to rely on, written standards and guidelines to be
followed by the Bank in interpreting and applying the computation methods set
forth in the Releases or any Subsequent Staff Positions as they specifically
apply to the Fund. In the event that the computation methods in the Releases
or the Subsequent Staff Positions or the application to the Fund of a
standard or guideline is not free from doubt or in the event there is any
question of interpretation as to the characterization of a particular
security or any aspect of a security or a payment with respect thereto (e.g.,
original issue discount, participating debt security, income or return of
capital, etc.) or otherwise or as to any other element of the computation
which is pertinent to the Fund, the Fund or its designated agent shall have
the full responsibility for making the determination of how the security or
payment is to be treated for purposes of the computation and how the
computation is to be made and shall inform the Bank thereof on a timely
basis. The Bank shall have no responsibility to make independent
determinations with respect to any item which is covered by this Section, and
shall not be responsible for its computations made in accordance with such
determinations so long as such computations are mathematically correct.
(d) The Fund shall keep the Bank informed of all publicly
available information and of any non-public advice, or information obtained
by the Fund from its independent auditors or by its personnel or the
personnel of its investment adviser, or Subsequent Staff Positions related to
the computations to be undertaken by the Bank pursuant to this Agreement and
the Bank shall not be deemed to have knowledge of such information (except as
contained in the Releases) unless it has been furnished to the Bank in
writing.
13. Additional Services. The Bank shall perform the additional
services for the Fund as are set forth on Appendix C hereto. Appendix C may
be amended from time to time upon agreement of the parties to include further
additional services to be provided by the Bank to the Fund, at which time the
fees set forth in Appendix A shall be appropriately increased.
14. Duties of the Bank.
14.1 Performance of Duties and Standard of Care. In performing its
duties hereunder and any other duties listed on any Schedule hereto, if any,
the Bank will be entitled to receive and act upon the advice of independent
counsel of its own selection, which may be counsel for the Fund, and will be
without liability for any action taken or thing done or omitted to be done in
accordance with this Agreement in good faith in conformity with such advice.
The Bank will be under no duty or obligation to inquire into and will
not be liable for:
(a) the validity of the issue of any Portfolio Securities purchased
by or for the Fund, the legality of the purchases thereof or the propriety
of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by or
for the Fund or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares of
the Fund or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares of the
Fund or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by the Fund
or the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; and
(f) any property or moneys of the Fund unless and until
received by it, and any such property or moneys delivered or paid by it
pursuant to the terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held
by it for the account of the Fund are such as may properly be held by the
Fund under the provisions of its Articles, By-laws, any federal or state
statutes or any rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Fund
Held in the United States. The Bank may employ agents in the performance of
its duties hereunder and shall be responsible for the acts and omissions of
such agents as if performed by the Bank hereunder. Without limiting the
foregoing, certain duties of the Bank hereunder may be performed by one or
more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ
subcustodians, provided that any such subcustodian meets at least the minimum
qualifications required by Section 17(f)(1) of the 1940 Act to act as a
custodian of the Fund's assets with respect to property of the Fund held in
the United States. The Bank shall have no liability to the Fund or any other
person by reason of any act or omission of any subcustodian and the Fund
shall indemnify the Bank and hold it harmless from and against any and all
actions, suits and claims, arising directly or indirectly out of the
performance of any subcustodian. Upon request of the Bank, the Fund shall
assume the entire defense of any action, suit, or claim subject to the
foregoing indemnity. The Fund shall pay all fees and expenses of any
subcustodian.
14.3 Duties of the Bank with Respect to Property of the Fund Held
Outside of the United States.
(a) Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Bank to employ as sub-custodians for the Fund's
Portfolio Securities and other assets maintained outside the United States
the foreign banking institutions and foreign securities depositories
designated on the Schedule attached hereto (each, a "Selected Foreign Sub-
Custodian"). Upon receipt of Proper Instructions, together with a certified
resolution of the Fund's Board of Trustees, the Bank and the Fund may agree
to designate additional foreign banking institutions and foreign securities
depositories to act as Selected Foreign Sub-Custodians hereunder. Upon
receipt of Proper Instructions, the Fund may instruct the Bank to cease the
employment of any one or more such Selected Foreign Sub-Custodians for
maintaining custody of the Fund's assets, and the Bank shall so cease to
employ such sub-custodian as soon as alternate custodial arrangements have
been implemented.
(b) Foreign Securities Depositories. Except as may otherwise
be agreed upon in writing by the Bank and the Fund, assets of the Fund shall
be maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as Selected Foreign
Sub-Custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the provisions
set forth in subparagraph (d) hereof. Notwithstanding the foregoing, except
as may otherwise be agreed upon in writing by the Bank and the Fund, the Fund
authorizes the deposit in Euro-clear, the securities clearance and depository
facilities operated by Morgan Guaranty Trust Company of New York in Brussels,
Belgium, of Foreign Portfolio Securities eligible for deposit therein and the
use of Euro-clear in connection with settlements of purchases and sales of
securities and deliveries and returns of securities, until notified to the
contrary pursuant to subparagraph (a) hereunder.
(c) Segregation of Securities. The Bank shall identify on its
books as belonging to the Fund the Foreign Portfolio Securities held by each
Selected Foreign Sub-Custodian. Each agreement pursuant to which the Bank
employs a foreign banking institution shall require that such institution
establish a custody account for the Bank and hold in that account Foreign
Portfolio Securities and other assets of the Fund, and, in the event that
such institution deposits Foreign Portfolio Securities in a foreign
securities depository, that it shall identify on its books as belonging to
the Bank the securities so deposited.
(d) Agreements with Foreign Banking Institutions. Each of the
agreements pursuant to which a foreign banking institution holds assets of
the Fund (each, a "Foreign Sub-Custodian Agreement") shall be substantially
in the form attached as Appendix D hereto and shall provide that: (a) the
Fund's assets will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or its
creditors or agent, except a claim of payment for their safe custody or
administration (including, without limitation, any fees or taxes payable upon
transfers or reregistration of securities); (b) beneficial ownership of the
Fund's assets will be freely transferable without the payment of money or
value other than for custody or administration (including, without
limitation, any fees or taxes payable upon transfers or reregistration of
securities); (c) adequate records will be maintained identifying the assets
as belonging to the Bank; (d) officers of or auditors employed by, or other
representatives of the Bank, including to the extent permitted under
applicable law, the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Bank; and (e) assets of
the Fund held by the Selected Foreign Sub-Custodian will be subject only to
the instructions of the Bank or its agents.
(e) Access of Independent Accountants of the Fund. Upon
request of the Fund, the Bank will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a Selected Foreign
Sub-Custodian insofar as such books and records relate to the performance of
such foreign banking institution under its Foreign Sub-Custodian Agreement.
(f) Reports by Bank. The Bank will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Fund held by Selected Foreign Sub-
Custodians, including but not limited to an identification of entities having
possession of the Foreign Portfolio Securities and other assets of the Fund.
(g) Transactions in Foreign Custody Account. Transactions with
respect to the assets of the Fund held by a Selected Foreign Sub-Custodian
shall be effected pursuant to Proper Instructions from the Fund to the Bank
and shall be effected in accordance with the applicable Foreign Sub-Custodian
Agreement. If at any time any Foreign Portfolio Securities shall be
registered in the name of the nominee of the Selected Foreign Sub-Custodian,
the Fund agrees to hold any such nominee harmless from any liability by
reason of the registration of such securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for Foreign Portfolio Securities received
for the account of the Fund and delivery of Foreign Portfolio Securities
maintained for the account of the Fund may be effected in accordance with the
customary established securities trading or securities processing practices
and procedures in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the purchaser thereof
or to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such securities
from such purchaser or dealer.
In connection with any action to be taken with respect to
the Foreign Portfolio Securities held hereunder, including, without
limitation, the exercise of any voting rights, subscription rights,
redemption rights, exchange rights, conversion rights or tender rights, or
any other action in connection with any other right, interest or privilege
with respect to such Securities (collectively, the "Rights"), the Bank shall
promptly transmit to the Fund such information in connection therewith as is
made available to the Bank by the Foreign Sub-Custodian, and shall promptly
forward to the applicable Foreign Sub-Custodian any instructions, forms or
certifications with respect to such Rights, and any instructions relating to
the actions to be taken in connection therewith, as the Bank shall receive
from the Fund pursuant to Proper Instructions. Notwithstanding the
foregoing, the Bank shall have no further duty or obligation with respect to
such Rights, including, without limitation, the determination of whether the
Fund is entitled to participate in such Rights under applicable U.S. and
foreign laws, or the determination of whether any action proposed to be taken
with respect to such Rights by the Fund or by the applicable Foreign Sub-
Custodian will comply with all applicable terms and conditions of any such
Rights or any applicable laws or regulations, or market practices within the
market in which such action is to be taken or omitted.
(h) Liability of Selected Foreign Sub-Custodians. Each Foreign
Sub-Custodian Agreement with a foreign banking institution shall require the
institution to exercise reasonable care in the performance of its duties and
to indemnify, and hold harmless, the Bank and each Fund from and against
certain losses, damages, costs, expenses, liabilities or claims arising out
of or in connection with the institution's performance of such obligations,
all as set forth in the applicable Foreign Sub-Custodian Agreement. The Fund
acknowledges that the Bank, as a participant in Euro-clear, is subject to the
Terms and Conditions Governing the Euro-Clear System, a copy of which has
been made available to the Fund. The Fund acknowledges that pursuant to such
Terms and Conditions, Morgan Guaranty Brussels shall have the sole right to
exercise or assert any and all rights or claims in respect of actions or
omissions of, or the bankruptcy or insolvency of, any other depository,
clearance system or custodian utilized by Euro-clear in connection with the
Fund's securities and other assets.
(i) Monitoring Responsibilities. The Bank shall furnish
annually to the Fund information concerning the Selected Foreign Sub-
Custodians employed hereunder for use by the Fund in evaluating such Selected
Foreign Sub-Custodians to ensure compliance with the requirements of Rule
17f-5 of the Act. In addition, the Bank will promptly inform the Fund in the
event that the Bank is notified by a Selected Foreign Sub-Custodian that
there appears to be a substantial likelihood that its shareholders' equity
will decline below US$200 million (or the equivalent thereof) or that its
shareholders' equity has declined below US$200 million (in each case computed
in accordance with generally accepted U.S. accounting principles) or any
other capital adequacy test applicable to it by exemptive order, or if the
Bank has actual knowledge of any material loss of the assets of the Fund held
by a Foreign Sub-Custodian.
(j) Tax Law. The Bank shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the
Bank as custodian of the Fund by the tax laws of any jurisdiction, and it
shall be the responsibility of the Fund to notify the Bank of the obligations
imposed on the Fund or the Bank as the custodian of the Fund by the tax law
of any non-U.S. jurisdiction, including responsibility for withholding and
other taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Selected Foreign Sub-
custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the
tax law of jurisdictions for which the Fund has provided such information.
14.4 Insurance. The Bank shall use the same care with respect to
the safekeeping of Portfolio Securities and cash of the Fund held by it as it
uses in respect of its own similar property but it need not maintain any
special insurance for the benefit of the Fund.
14.5. Fees and Expenses of the Bank. The Fund will pay or
reimburse the Bank from time to time for any transfer taxes payable upon
transfer of Portfolio Securities made hereunder, and for all necessary proper
disbursements, expenses and charges made or incurred by the Bank in the
performance of this Agreement (including any duties listed on any Schedule
hereto, if any) including any indemnities for any loss, liabilities or
expense to the Bank as provided above. For the services rendered by the Bank
hereunder, the Fund will pay to the Bank such compensation or fees at such
rate and at such times as shall be agreed upon in writing by the parties from
time to time. The Bank will also be entitled to reimbursement by the Fund for
all reasonable expenses incurred in conjunction with termination of this
Agreement.
14.6 Advances by the Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. Should such a payment or payments, with
advanced funds, result in an overdraft (due to insufficiencies of the Fund's
account with the Bank, or for any other reason) this Agreement deems any such
overdraft or related indebtedness a loan made by the Bank to the Fund payable
on demand. Such overdraft shall bear interest at the current rate charged by
the Bank for such loans unless the Fund shall provide the Bank with agreed
upon compensating balances. The Fund agrees that the Bank shall have a
continuing lien and security interest to the extent of any overdraft or
indebtedness, in and to any property at any time held by it for the Fund's
benefit or in which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's
sole discretion, at any time to charge any overdraft or indebtedness,
together with interest due thereon, against any balance of account standing
to the credit of the Fund on the Bank's books.
15. Limitation of Liability.
15.1 Notwithstanding anything in this Agreement to the contrary, in
no event shall the Bank or any of its officers, directors, employees or
agents (collectively, the "Indemnified Parties") be liable to the Fund or any
third party, and the Fund shall indemnify and hold the Bank and the
Indemnified Parties harmless from and against any and all loss, damage,
liability, actions, suits, claims, costs and expenses, including legal fees,
(a "Claim") arising as a result of any act or omission of the Bank or any
Indemnified Party under this Agreement, except for any Claim resulting solely
from the gross negligence, willful misfeasance or bad faith of the Bank or
any Indemnified Party. Without limiting the foregoing, neither the Bank nor
the Indemnified Parties shall be liable for, and the Bank and the Indemnified
Parties shall be indemnified against, any Claim arising as a result of:
(a) Any act or omission by the Bank or any Indemnified Party in good faith
reliance upon the terms of this Agreement, any Officer's Certificate, Proper
Instructions, resolution of the Board, telegram, telecopier, notice, request,
certificate or other instrument reasonably believed by the Bank to genuine;
(b) Any act or omission of any subcustodian selected by or at the
direction of the Fund;
(c) Any act or omission of a Selected Foreign Sub-Custodian for
to the extent which such Selected Foreign Sub-Custodian is not liable to the
Bank;
(d) Any Corporate Action requiring a Response for which the
Bank has not received Proper Instructions or obtained actual possession of
all necessary Securities, consents or other materials by 5:00 p.m. on the
date specified as the Response Deadline;
(e) Any act or omission of any European Branch of a U.S.
banking institution that is the issuer of Eurodollar CDs in connection with
any Eurodollar CDs held by such European Branch;
(f) Information relied on in good faith by the Bank and supplied
by any Authorized Person in connection with the calculation of (i)
the net asset value and public offering price of the shares of capital stock
of the Fund or (ii) the Yield Calculation; or
(g) Any acts of God, earthquakes, fires, floods, storms or
other disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software)
and computer facilities, the unavailability of energy sources and other
similar happenings or events.
15.2 Notwithstanding anything to the contrary in this Agreement, in
no event shall the total liability of the Bank and the Indemnified Parties
under this Agreement exceed in general money damages a total cumulative
maximum amount of one hundred percent of the amounts actually paid by the
Fund to the Bank under this Agreement. The existence of more than one Claim
will not enlarge or extend this limit.
15.3 Notwithstanding anything to the contrary in this Agreement,
in no event shall the Bank or the Indemnified Parties be liable to the Fund
or any third party for lost profits or lost revenues or any special,
consequential, punitive or incidental damages of any kind whatsoever in
connection with this Agreement or any activities hereunder.
16. Termination.
16.1 The term of this Agreement shall be three years commencing
upon the effective date of the Fund's registration statement] (the "Initial
Term"), unless earlier terminated as provided herein. After the expiration
of the Initial Term, the term of this Agreement shall automatically renew for
successive one-year terms (each a "Renewal Term") unless notice of non-
renewal is delivered by the non-renewing party to the other party no later
than sixty days prior to the expiration of the Initial Term or any Renewal
Term, as the case may be.
(a) Either party hereto may terminate this Agreement prior to
the expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the non-violating party
gives written notice of such violation to the violating party and the
violating party does not cure such violation within 90 days of receipt of
such notice.
(b) Either party may terminate this Agreement during any
Renewal Term upon sixty days written notice to the other party. Any
termination pursuant to this paragraph 16.1(b) shall be effective upon
expiration of such sixty days, provided, however, that the effective date of
such termination may be postponed to a date not more than ninety days after
delivery of the written notice: (i) at the request of the Bank, in order to
prepare for the transfer by the Bank of all of the assets of the Fund held
hereunder; or (ii) at the request of the Fund, in order to give the Fund an
opportunity to make suitable arrangements for a successor custodian.
16.2 In the event of the termination of this Agreement, the Bank
will immediately upon receipt or transmittal, as the case may be, of notice
of termination, commence and prosecute diligently to completion the transfer
of all cash and the delivery of all Portfolio Securities duly endorsed and
all records maintained under Section 11 to the successor custodian when
appointed by the Fund. The obligation of the Bank to deliver and transfer
over the assets of the Fund held by it directly to such successor custodian
will commence as soon as such successor is appointed and will continue until
completed as aforesaid. If the Fund does not select a successor custodian
within ninety (90) days from the date of delivery of notice of termination
the Bank may, subject to the provisions of subsection (16.3), deliver the
Portfolio Securities and cash of the Fund held by the Bank to a bank or trust
company of the Bank's own selection which meets the requirements of Section
17(f)(1) of the 1940 Act and has a reported capital, surplus and undivided
profits aggregating not less than $2,000,000, to be held as the property of
the Fund under terms similar to those on which they were held by the Bank,
whereupon such bank or trust company so selected by the Bank will become the
successor custodian of such assets of the Fund with the same effect as though
selected by the Board. Thereafter, the Bank shall be released from any and
all obligations under this Agreement.
16.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Fund may furnish the Bank with an order of
the Fund advising that a successor custodian cannot be found willing and able
to act upon reasonable and customary terms and that there has been submitted
to the shareholders of the Fund the question of whether the Fund will be
liquidated or will function without a custodian for the assets of the Fund
held by the Bank. In that event the Bank will deliver the Portfolio
Securities and cash of the Fund held by it, subject as aforesaid, in
accordance with one of such alternatives which may be approved by the
requisite vote of shareholders, upon receipt by the Bank of a copy of the
minutes of the meeting of shareholders at which action was taken, certified
by the Fund's Secretary and an opinion of counsel to the Fund in form and
content satisfactory to the Bank. Thereafter, the Bank shall be released
from any and all obligations under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement.
16.5 At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as custodian.
17. Confidentiality. Both parties hereto agree than any non-public
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency. The
parties further agree that a breach of this provision would irreparably
damage the other party and accordingly agree that each of them is entitled,
in addition to all other remedies at low or in equal to an injunction or
injunctions without bond or other security to prevent breaches of this
provision.
18. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (I) United
States Postal Service registered mail, (ii) telecopier with written
confirmation, (iii) had delivery with signature to such party at its office
at the address set forth below, namely:
(a) In the case of notices sent to the Fund to:
[ ]
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Attention: [ ]
or at such other place as such party may from time to time
designate in writing.
19. Amendments. This Agreement may not be altered or amended, except
by an instrument in writing, executed by both parties.
20. Parties. This Agreement will be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement will not be assignable by the
Fund without the written consent of the Bank or by the Bank without the
written consent of the Fund, authorized and approved by its Board; and
provided further that termination proceedings pursuant to Section 16 hereof
will not be deemed to be an assignment within the meaning of this provision.
21. Governing Law. This Agreement and all performance hereunder will
be governed by the laws of the Commonwealth of Massachusetts, without regard
to conflict of laws provisions.
22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
23. Entire Agreement. This Agreement, together with its Appendices,
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any
conflicting terms or provisions of any other instrument and terminates and
supersedes any and all prior agreements and undertakings between the parties
relating to the subject matter herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
[ ]
By:_________________________
Name:
Title:
Investors Bank & Trust Company
By:__________________________
Name:
Title:
Dechert Price & Rhoads
477 Madison Avenue
New York, NY 10022
August 30, 1996
Harding, Loevner Funds, Inc.
in respect of
International Equity Portfolio
600 Fifth Avenue, 26th Floor
New York, NY 10020
Re: Registration Statement on Form N-14
Dear Sirs:
We refer to the Registration Statement on Form N-14 (the "Registration
Statement") relating to the issuance of shares of Common Stock, par value
$0.01 per share (the "IE Shares"), of the International Equity Portfolio (the
"IE Portfolio"), a series of Harding, Loevner Funds, Inc. (the "Company"), a
Maryland corporation, in connection with the proposed Agreement and Plan of
Reorganization (the "Agreement"), which provides for all of the assets of the
HLM International Equity Portfolio (the 'HLM Portfolio"), a series of AMT
Capital Fund, Inc., to be transferred to the IE Portfolio in exchange for a
number of IE Shares equal to the number of outstanding shares of the HLM
Portfolio, and the distribution of such IE Shares to the shareholders of the
HLM Portfolio in complete liquidation of the HLM Portfolio on the basis of
one IE Share (or fraction thereof) for each share (or fraction thereof) of the
HLM Portfolio. We have examined the Company's Articles of Incorporation and
Bylaws, the relevant proceedings of the Board of Directors of the Company, and
such other certificates, instruments, documents and matters of law relating to
the Company as we deem necessary in connection with rendering this portion. In
such examination, we have assumed the genuineness of all signatures, the
conformity of final documents in all material respects to the versions that
were submitted to us in draft form, the authenticity of all the documents
submitted to us as originals, and the conformity with originals of all documents
submitted to us as copies.
On the basis of the foregoing, it is our opinion that the IE Shares have been
duly authorized and, when issued in accordance with the terms of the Agreement
and as contemplated by the Registration Statement, will be validly issued, fully
paid and nonassessable.
We hereby consent to filing of this opinion as an exhibit to the Registration
Statement and to all references to our firm therein.
Very truly tours,
/s/ Dechert Price & Rhoads
Dechert Price & Rhoads
TRANSFER AGENCY AND SERVICE AGREEMENT
Between
Harding, Loevner Funds,Inc.
and
INVESTORS BANK & TRUST COMPANY
FORM OF
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT effective as of the first day of October, 1996 by and
between Harding, Loevner Funds, Inc., a corporation organized under
the laws of [State of Incorporation] (the "Company"), and INVESTORS
BANK & TRUST COMPANY, a Massachusetts trust company (the "Bank").
WHEREAS, the Company desires to appoint the Bank as its transfer
agent, dividend disbursing agent and agent in connection with certain
other activities, and the Bank desires to accept such appointment;
WHEREAS, the Bank is duly registered as a transfer agent as
provided in Section 17A(c) of the Securities Exchange Act of 1934, as
amended, (the "1934 Act");
WHEREAS, the Company is authorized to issue shares in separate
series, with each such series representing interests in a separate
portfolio of securities and other assets;
WHEREAS, the Company intends to initially offer shares in
[number] series, [name of each series] (such series, together with all
other series subsequently established by the Company and made subject
to this Agreement in accordance with Article 17, being herein referred
to as the "Fund(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein
set forth, the Company and the Bank agree as follows:
ARTICLE 1. Terms of Appointment; Duties of the Bank
1.01 Subject to the terms and conditions set forth in this
Agreement, the Company on behalf of the Funds hereby employs and
appoints the Bank to act, and the Bank agrees to act, as transfer
agent for each of the Fund(s)' authorized and issued shares of
beneficial interest ("Shares"), dividend disbursing agent and agent in
connection with any accumulation, open-account or similar plans
provided to the shareholders of the Company ("Shareholders") and set
out in the currently effective prospectus and statement of additional
information, as each may be amended from time to time, (the
"Prospectus") of the Company, including without limitation any
periodic investment plan or periodic withdrawal program.
1.02 The Bank agrees that it will perform the following
services:
(a) In connection with procedures established from time to
time by agreement between the Company and the Bank, the Bank shall:
(i) Receive for acceptance orders for the purchase of
Shares and promptly deliver payment and appropriate documentation
therefor to the custodian of theCompany appointed by the Board of
Directors of the Company (the "Custodian");
(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate documentation
therefor to the Custodian;
(iv) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any redemption, pay
over or cause to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders;
(v) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Company on behalf of a Fund;
(vii) Create and maintain all necessary records
including those specified in Article 10 hereof, in accordance with all
applicable laws, rules and regulations, including but not limited to
records required by Section 31(a) of the Investment Company Act of
1940, as amended (the "1940 Act"), and those records pertaining to the
various functions performed by it hereunder. All records shall be
available for inspection and use by the Company. Where applicable,
such records shall be maintained by the Bank for the periods and in
the places required by Rule 31a-2 under the 1940 Act;
(viii) 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 Company, or any person
retained by the Company. Upon reasonable notice by the Company, the
Bank 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 Company, or any person retained by the
Company;
(ix) At the expense of and at the request of the
Company, maintain an adequate supply of blank share certificates for
each Fund providing for the issuance of certificates to meet the
Bank's requirements therefor. Such share certificates shall be
properly signed by facsimile. The Company agrees that,
notwithstanding the death, resignation, or removal of any officer of
the Company whose signature appears on such certificates, the Bank may
continue to countersign certificates which bear such signatures until
otherwise directed by the Company. Share certificates may be issued
and accounted for entirely by the Bank and do not require any third
party registrar or other endorsing party;
(x) Issue replacement share certificates in lieu of
certificates which have been lost, stolen, mutilated or destroyed,
without any further action by the Board of Directors or any officer
of the Company, upon receipt by the Bank of properly executed
affidavits and lost certificate bonds, in form satisfactory to the
Bank with the Company and the Bank as obligees under the bond. At the
discretion of the Bank, and at its sole risk, the Bank may issue
replacement certificates without requiring the affidavits and lost
certificate bonds described above and the Company agrees to indemnify
the Bank against any and all losses or claims which may arise by
reason of the issuance of such new certificates in the place of the
ones allegedly lost, stolen or destroyed; and
(xi) Record the issuance of Shares of the Company and
maintain, pursuant to Rule 17Ad-10(e) under the 1934 Act, a record of
the total number of Shares of the Company which are authorized, based
upon data provided to it by the Company, and issued and outstanding.
The Bank shall also provide the Company on a regular basis with the
total number of Shares which are authorized and issued and outstanding
and shall have no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Company.
(b) In addition to and not in lieu of the services set
forth in the above paragraph (a) or in any Schedule hereto, the Bank
shall: (i) perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program); including but not limited to maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies,
receiving and tabulating proxies, mailing Shareholder reports and
prospectuses to current Shareholders, withholding taxes on all
accounts, including nonresident alien accounts, preparing and filing
U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, responding to Shareholder telephone calls and
Shareholder correspondence, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information; and
(ii) provide a system which will enable the Company to monitor the
total number of shares sold in each State. The Company shall (i)
identify to the Bank in writing those transactions and assets to be
treated as exempt from blue sky reporting for each State and (ii)
verify the establishment of transactions for each State on the system
prior to activation and thereafter monitor the daily activity for each
State. The responsibility of the Bank for a Fund's blue sky state
registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by such Fund(s) and the
reporting of such transactions to the Fund(s) as provided above.
(c) Additionally, the Bank shall utilize a system to
identify all share transactions which involve purchase and redemption
orders that are processed at a time other than the time of the
computation of net asset value per share next computed after receipt
of such orders, and shall compute the net effect upon the Fund(s) of
such transactions so identified on a daily and cumulative basis.
ARTICLE 2. Sale of Company Shares
2.01 Whenever the Company shall sell or cause to be sold any
Shares of a Fund, the Company shall deliver or cause to be delivered
to the Bank a document duly specifying: (i) the name of the Fund
whose Shares were sold; (ii) the number of Shares sold, trade date,
and price; (iii) the amount of money to be delivered to the Custodian
for the sale of such Shares and specifically allocated to such Fund;
and (iv) in the case of a new account, a new account application or
sufficient information to establish an account.
2.02 The Bank will, upon receipt by it of a check or other
payment identified by it as an investment in Shares of one of the
Funds and drawn or endorsed to the Bank as agent for, or identified as
being for the account of, one of the Funds, promptly deposit such
check or other payment to the appropriate account postings necessary
to reflect the investment. The Bank will notify the Company, or its
designee, and the Custodian of all purchases and related account
adjustments.
2.03 Under procedures as established by mutual agreement between
the Company and the Bank, the Bank shall issue to the purchaser or its
authorized agent such Shares, computed to the nearest three decimal
points, as he is entitled to receive, based on the appropriate net
asset value of the Funds' Shares, determined in accordance with the
prospectus and any applicable federal law or regulation. In issuing
Shares to a purchaser or its authorized agent, the Bank shall be
entitled to rely upon the latest directions, if any, previously
received by the Bank from the purchaser or its authorized agent
concerning the delivery of such Shares.
2.04 The Bank shall not be required to issue any Shares of the
Company where it has received a written instruction from the Company
or written notification from any appropriate federal or state
authority that the sale of the Shares of the Fund(s) in question has
been suspended or discontinued, and the Bank shall be entitled to
rely upon such written instructions or written notification.
2.05 Upon the issuance of any Shares of any Fund(s) in
accordance with foregoing provisions of this Section, the Bank shall
not be responsible for the payment of any original issue or other
taxes, if any, required to be paid by the Company in connection with
such issuance.
2.06 The Bank may establish such additional rules and
regulations governing the transfer or registration of Shares as it may
deem advisable and consistent with such rules and regulations
generally adopted by transfer agents, or with the written consent of
the Company, any other rules and regulations.
ARTICLE 3. Returned Checks
3.01 In the event that any check or other order for the transfer
of money is returned unpaid for any reason, the Bank will take such
steps as the Bank may, in its discretion, deem appropriate to protect
the Company from financial loss or as the Company or its designee may
instruct. Provided that the standard procedures, as agreed upon from
time to time, between the Company and the Bank, regarding purchases
and redemptions of Shares, are adhered to by the Bank, the Bank shall
not be liable for any loss suffered by a Fund as a result of returned
or unpaid purchase or redemption transactions. Legal or other
expenses incurred to collect amounts owed to a Fund as a consequence
of returned or unpaid purchase or redemption transactions shall be an
expense of that Fund.
ARTICLE 4 . Redemptions
4.01 Shares of any Fund may be redeemed in accordance with the
procedures set forth in the Prospectus of the Company and the Bank
will duly process all redemption requests.
ARTICLE 5. Transfers and Exchanges
5.01 The Bank is authorized to review and process transfers of
Shares of each Fund, exchanges between Funds on the records of the
Funds maintained by the Bank, and exchanges between the Company and
any other entity as may be permitted by the Prospectus of the Company.
If Shares to be transferred are represented by outstanding
certificates, the Bank will, upon surrender to it of the certificates
in proper form for transfer, and upon cancellation thereof,
countersign and issue new certificates for a like number of Shares and
deliver the same. If the Shares to be transferred are not represented
by outstanding certificates, the Bank will, upon an order therefor by
or on behalf of the registered holder thereof in proper form, credit
the same to the transferee on its books. If Shares are to be
exchanged for Shares of another Fund, the Bank will process such
exchange in the same manner as a redemption and sale of Shares,
except that it may in its discretion waive requirements for
information and documentation.
ARTICLE 6. Right to Seek Assurances
6.01 The Bank reserves the right to refuse to transfer or redeem
Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability for
the refusal, in good faith, to make transfers or redemptions which the
Bank, in its judgment, deems improper or unauthorized, or until it is
satisfied that there is no basis for any claims adverse to such
transfer or redemption. The Bank may, in effecting transfers, rely
upon the provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as the
same may be amended from time to time, which in the opinion of legal
counsel for the Company or the Bank's own legal counsel, do not
require certain documents in connection with the transfer or
redemption of Shares of any Fund, and the Company shall indemnify the
Bank for any act done or omitted by it in reliance upon such laws or
opinions of counsel of the Company or of the Bank.
ARTICLE 7. Distributions
7.01 The Company will promptly notify the Bank of the
declaration of any dividend or distribution. The Company shall
furnish to the Bank a resolution of the Board of Directors of the
Company certified by the Secretary (a "Certificate"): (i) authorizing
the declaration of dividends on a specified periodic basis and
authorizing the Bank to rely on oral instructions or a Certificate
specifying the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined and the amount
payable per share to Shareholders of record as of such record date
and the total amount payable to the Bank on the payment date; or (ii)
setting forth the date of the declaration of any dividend or
distribution by a Fund, the date of payment thereof, the record date
as of which Shareholders entitled to payment shall be determined, and
the amount payable per share to the Shareholders of record as of
that date and the total amount payable to the Bank on the payment
date.
7.02 The Bank, on behalf of the Company, shall instruct the
Custodian to place in a dividend disbursing account funds equal to the
cash amount of any dividend or distribution to be paid out. The Bank
will calculate, prepare and mail checks to (at the address as it
appears on the records of the Bank), or (where appropriate) credit
such dividend or distribution to the account of, Fund Shareholders,
and maintain and safeguard all underlying records.
7.03 The Bank will replace lost checks at its discretion and in
conformity with regular business practices.
7.04 The Bank will maintain all records necessary to reflect the
crediting of dividends which are reinvested in Shares of the Company,
including without limitation daily dividends.
7.05 The Bank shall not be liable for any improper payments made
in accordance with a resolution of the Board of Directors of the
Company.
7.06 If the Bank shall not receive from the Custodian sufficient
cash to make payment to all Shareholders of the Company as of the
record date, the Bank shall, upon notifying the Company, withhold
payment to all Shareholders of record as of the record date until such
sufficient cash is provided to the Bank and shall not be liable for
any claim arising out of such withholding.
ARTICLE 8. Other Duties
8.01 In addition to the duties expressly provided for herein,
the Bank shall perform such other duties and functions and shall be
paid such amounts therefor as may from time to time be agreed to in
writing.
ARTICLE 9. Taxes
9.01 It is understood that the Bank shall file such appropriate
information returns concerning the payment of dividends and capital
gain distributions and tax withholding with the proper Federal, State
and local authorities as are required by law to be filed by the
Company and shall withhold such sums as are required to be withheld by
applicable law.
ARTICLE 10. Books and Records
10.01 The Bank shall maintain confidential records showing for
each Shareholder's account the following: (i) names, addresses and tax
identification numbers; (ii) numbers of Shares held; (iii)
historical information (as available from prior transfer agents)
regarding the account of each Shareholder, including dividends paid
and date and price of all transactions on a Shareholder's account;
(iv) any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings; (vi) any
capital gain or dividend reinvestment order, plan application,
dividend address and correspondence relating to the current
maintenance of a Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; (viii) any
information required in order for the Bank to perform the calculations
contemplated or required by this Agreement; and (ix) such other
information and data as may be required by applicable law.
10.02 Any records required to be maintained by Rule 31a-1 under
the 1940 Act will be preserved for the periods prescribed in Rule 31a-
2 under the 1940 Act. Such records may be inspected by the Company
during regular business hours upon reasonable notice. The Bank may,
at its option at any time, and shall forthwith upon the Company's
demand, turn over to the Company and cease to retain in the Bank's
files, records and documents created and maintained by the Bank in
performance of its service or for its protection. At the end of the
six-year retention period, such documents will either be turned over
to the Company, or destroyed in accordance with the Company's
authorization.
10.03 Procedures applicable to the services to be performed
hereunder may be established from time to time by agreement between
the Fund(s) and the Bank. The Bank shall have the right to utilize
any shareholder accounting and recordkeeping systems which, in its
opinion, qualifies to perform any services to be performed hereunder.
The Bank shall keep records relating to the services performed
hereunder, in the form and manner as it may deem advisable.
ARTICLE 11. Fees and Expenses.
11.01 For performance by the Bank pursuant to this Agreement,
the Fund(s) agree to pay the Bank an annual maintenance fee for each
Shareholder account as set out in the initial fee schedule attached as
Appendix A hereto. Such fees and out-of-pocket expenses and advances
identified under Section 11.02 below may be changed from time to time
subject to mutual written agreement between the Fund(s) and the Bank.
11.02 In addition to the fee paid under Section 11.01 above,
the Fund(s) agree to reimburse the Bank for out-of-pocket expenses or
advances incurred by the Bank for the items set out in the fee
schedule attached hereto. In addition, any other expenses incurred by
the Bank at the request or with the consent of the Fund(s) including,
without limitation, any equipment or supplies which the Company
specifically orders or requiresthe Bank to purchase, will be
reimbursed by the Fund(s).
11.03 The Fund(s) agree to pay all fees and reimbursable
expenses within thirty days following the mailing of the respective
billing notice. Postage for mailing of dividends, proxies, Fund
reports and other mailings to all shareholder accounts shall be
advanced to the Bank by the Fund(s) at least seven (7) days prior to
the mailing date of such materials. Any waiver or extension by the
Bank of the five and seven day time periods enumerated in this section
2.03 shall not constitute a dismissal of any monies due under this
Agreement nor shall such waiver or extension apply to any future
monies due to the Bank hereunder.
ARTICLE 12. Representations and Warranties of the Bank
The Bank represents and warrants to the Company that:
12.01 It is a trust company duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts.
12.02 It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
12.03 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
12.04 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
ARTICLE 13. Representations and Warranties of the Company
The Company represents and warrants to the Bank that:
13.01 It is a corporation duly organized and existing and in
good standing under the laws of the State of its incorporation as set
forth in the preamble hereto.
13.02 It is empowered under applicable laws and by its charter
documents and by-laws to enter into and perform this Agreement.
13.03 All proceedings required by said charter documents and by-
laws have been taken to authorize it to enter into and perform this
Agreement.
13.04 It is a open-end investment company registered under the
1940 Act.
13.05 A registration statement on Form N-1A (including a
prospectus and statement of additional information) under the
Securities Act of 1933 and the 1940 Act is currently effective and
will remain effective, and appropriate state securities law filings
have been made and will continue to be made, with respect to all
Shares of the Company being offered for sale.
13.06 When Shares are hereafter issued in accordance with the
terms of the Prospectus, such Shares shall be validly issued, fully
paid and nonassessable by the Fund(s).
ARTICLE 14. Indemnification
14.01 Except as set forth in subparagraph (f) hereof, the Bank
shall not be responsible for, and the Company shall indemnify and hold
the Bank harmless from and against, any and all losses, damages,
costs, charges, legal fees, payments, expenses and liability arising
out of or attributable to:
(a) All actions taken or omitted to be taken by the Bank
or its agents or subcontractors in good faith in reliance on or use by
the Bank or its agents or subcontractors of information, records and
documents which (i) are received by the Bank or its agents or
subcontractors and furnished to such party by or on behalf of the
Fund(s), (ii) have been prepared and/or maintained by the Fund(s) or
any other person or firm on behalf of the Fund(s), or (iii) were
received by the Bank or its agents or subcontractors from a prior
transfer agent.
(b) Any action taken or omitted to be taken by the Bank in
good faith reliance upon any law, act, regulation (a "Regulation") or
interpretation of a Regulation even though such Regulation may
thereafter have been altered, changed, amended or repealed.
(c) The Fund(s)' refusal or failure to comply with the
terms of this Agreement, or which arise out of the Funds' lack of good
faith, negligence or willful misconduct or which arise out of the
breach of any representation or warranty of the Fund(s) hereunder.
(d) The reliance on, or the carrying out by the Bank or
its agents or subcontractors of any instructions or requests, whether
written or oral, of the Fund(s).
(e) The offer or sale of Shares by the Company in violation
of (i) any requirement under the federal securities laws or
regulations; (ii) any requirement under the securities laws or
regulations of any state; or (iii) any stop order or other
determination or ruling by any federal or state agency with respect to
the offer or sale of such Shares.
14.02 The Bank shall indemnify and hold the Fund(s) harmless
from and against any and all losses, damages, costs, charges, legal
fees, payments, expenses and liability arising out of or attributed to
any action or failure or omission to act by the Bank as a result of
the Bank's lack of good faith, gross negligence, willful misconduct,
knowing violation of law or fraud.
14.03 At any time the Bank may apply to any officer of the
Company for instructions, and may consult with legal counsel of the
Bank or the Company with respect to any matter arising in connection
with the services to be performed by the Bank under this Agreement,
and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Company for any action taken or omitted
by it in reliance upon such instructions or upon the opinion of such
counsel except for a knowing violation of law. The Bank, its agents
and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund(s),
reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data,
records or documents provided to the Bank or its agents or
subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund(s), and the Bank, its
agents and subcontractors shall not be held to have notice of any
change of authority of any person, until receipt of written notice
thereof from the Fund(s). The Bank, its agents and subcontractors
shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual
or facsimile signatures of an officer of the Company, and one proper
countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
14.04 In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
strikes, interruption of electrical power or other utilities,
equipment or transmission failure or damage reasonably beyond its
control, or other causes reasonably beyond its control, such party
shall not be liable to the other for any damages resulting from such
failure to perform or otherwise from such causes.
14.05 Neither party to this Agreement shall be liable to the
other party for special, incidental or consequential damages, even if
the other party has been advised of the possibility of such damages,
under any provision of this Agreement or for any act or failure to act
hereunder as contemplated by this Agreement.
14.06 Notwithstanding anything to the contrary in this
Agreement, in no event shall the Bank's liability under this Agreement
exceed in general money damages a total cumulative maximum amount of
one hundred percent of the amounts actually paid by the Company to the
Bank under this Agreement. The existence of more than one claim shall
not enlarge or extend this limit.
14.07 In order that the indemnification provisions contained in
this Article 14 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party seeking
the indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party seeking
indemnification shall give the indemnifying party full and complete
authority, information and assistance to defend such claim or
proceeding, and the indemnifying party shall have, at its option, sole
control of the defense of such claim or proceeding and all negotiations
for its compromise or settlement.The party seeking indemnification shall
in no case confess any claim or make any compromise in any case in which
the other party may be required to indemnify it except with the other
party's prior written consent, which consent shall not be unreasonably
withheld.
ARTICLE 15. Covenants of the Company and the Bank
15.01 The Company shall promptly furnish to the Bank the
following:
(a) A certified copy of the resolution of the Directors of
the Company authorizing the appointment of the Bank and the execution
and delivery of this Agreement.
(b) A copy of the charter documents and by-laws of the
Company and all amendments thereto.
(c) Copies of each vote of the Directors designating
authorized persons to give instructions to the Bank, and a Certificate
providing specimen signatures for such authorized persons.
(d) Certificates as to any change in any officer or Director
of the Company.
(e) If applicable a specimen of the certificate of Shares
in each Fund of the Company in the form approved by the Directors,
with a Certificate as to such approval.
(f) Specimens of all new certificates for Shares,
accompanied by the Directors' resolutions approving such forms.
(g) All account application forms and other documents
relating to shareholder accounts or relating to any plan, program or
service offered by the Company.
(h) A list of all Shareholders of the Fund(s) with the
name, address and tax identification number of each Shareholder, and
the number of Shares of the Fund(s) held by each, certificate numbers
and denominations ( if any certificates have been issued), lists of
any account against which stops have been placed, together with the
reasons for said stops, and the number of Shares redeemed by the
Fund(s).
(i) An opinion of counsel for the Company with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933.
(j) Copies of the Fund(s) registration statement on Form N-
1A (if applicable)as amended and declared effective by the Securities
and Exchange Commission and all post-effective amendments thereto.
(k) Such other certificates, documents or opinions as the
Bank may deem necessary or appropriate for the Bank in the proper
performance of its duties hereunder.
15.02 The Bank hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Company for
safekeeping of stock certificates, check forms and facsimile signature
imprinting devices, if any; and for the preparation or use, and for
keeping account of, such certificates, forms and devices.
15.03 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable.
To the extent required by Section 31 of the 1940 Act and the Rules
thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the
Bank hereunder are the confidential property of the Company and will
be preserved, maintained and made available in accordance with such
Section and Rules, and will be surrendered to the Company on and in
accordance with its request.
15.04 The Bank and the Company agree that all books, records,
information and data pertaining to the business of the other party
which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential, and shall
not be voluntarily disclosed to any other person, except as may be
required by law.
15.05 In case of any requests or demands for the inspection of
the Shareholder records of the Company, the Bank will endeavor to
notify the Company and to secure instructions from an authorized
officer of the Company as to suchrequest or demand. The Bank reserves
the right, however, to exhibit the Shareholder records to any person
whenever it is advised by its counsel that it may be subject to
enforcement or other action by any court or regulatory body for the
failure to exhibit the Shareholder records to such person.
ARTICLE 16. Term of Agreement
16.01 Termination of Agreement. The term of this Agreement shall
be three years commencing upon the date first above written (the
"Initial Term"), unless earlier terminated as provided herein. After
the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive one-year terms (each a "Renewal
Term") unless notice of non-renewal is delivered by the non-renewing
party to the other party no later than sixty days prior to the
expiration of the Initial Term or any Renewal Term, as the case may
be.
(a) Either party hereto may terminate this Agreement prior
to the expiration of the Initial Term in the event the other party
violates any material provision of this Agreement, provided that the
non-violating party gives written notice of such violation to the
violating party and the violating party does not cure such violation
within 90 days of receipt of such notice.
(b) Either party may terminate this Agreement during any
Renewal Term upon sixty days written notice to the other party. Any
termination pursuant to this paragraph 16.01(b) shall be effective
upon expiration of such sixty days, provided, however, that the
effective date of such termination may be postponed to a date not more
than ninety days after delivery of the written notice: (i) at the
request of the Bank, in order to prepare for the transfer by the Bank
of its duties hereunder; or (ii) at the request of the Fund, in order
to give the Fund an opportunity to make suitable arrangements for a
successor transfer agent.
16.02 Should the Company exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and
material will be borne by the Company. Additionally, the Bank
reserves the right to recover from the Company any other reasonable
expenses associated with such termination.
ARTICLE 17. Additional Funds
17.01 In the event that the Company establishes one or more
series of Shares in addition to the initial series with respect to
which it desires to have the Bank render services as transfer agent
under the terms hereof, it shall so notify the Bank in writing, and if
the Bank agrees in writing to provide such services, such series of
Shares shall become a Fund hereunder.
ARTICLE 18. Assignment
18.01 Except as provided in Section 18.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by
either party without the written consent of the other party.
18.02 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.
18.03 The Bank, may without further consent on the part of the
Company, subcontract for the performance of any of the services to be
provided hereunder to third parties, including any affiliate of the
Bank, provided that the Bank shall remain liable hereunder for any
acts or omissions of any subcontractor as if performed by the Bank.
ARTICLE 19. Amendment
19.01 This Agreement may be amended or modified only by a written
agreement executed by both parties.
ARTICLE 20. Governing Law
20.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts, without regard to its conflict of laws provisions.
ARTICLE 21. Merger of Agreement and Severability
21.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
21.02 In the event any provision of this Agreement shall be held
unenforceable or invalid for any reason, the remainder of the Agreement shall
remain in full force and effect.
21.03 This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such counterparts shall
together, constitute only one instrument.
ARTICLE 22. Notices
22. 01 Any notice or other instrument in writing authorized or required
by this Agreement to be given to either party hereto will be sufficiently
given if addressed to such party and mailed or delivered to it at its office
at the address set forth below:
For the Fund(s): [ ]
Attention:
For the Bank: Investors Bank & Trust Company
P.O. Box 1537
Boston, Massachusetts 02205-1537
Attention:
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and the year
first above written.
[Name of Investment Company]
By: __________________________
Name:
Title:
INVESTORS BANK & TRUST COMPANY
By: __________________________
Name:
Title:
ADMINISTRATION AGREEMENT
AGREEMENT dated as of _______, 1996 by and between Harding, Loevner Funds,
Inc., a Maryland corporation (the "Fund"), and AMT Capital Services, Inc., a
Delaware corporation ("AMT Capital").
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and offers shares of three separate series of its common stock, par value $.01
per share, which have been registered under the Securities Act of 1933, as
amended;
WHEREAS, AMT Capital is a service company which provides management,
administrative and other services to investment companies and other entities;
and
WHEREAS, the Fund desires to retain AMT Capital to render certain management
and administrative services, including supervision of certain third party
vendors to the Fund.
NOW, THEREFORE, in consideration of the above premises and of other good
and valuable consideration the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Appointment of Administrator
The Fund hereby appoints AMT Capital to act as administrator to the Fund
for the period and on the terms set forth in this Agreement. This appointment
applies to each existing series of the Fund, as well as any future series
provided (i) the Fund does not object to AMT Capital in writing on any basis
or (ii) AMT Capital does not object to the Fund in writing on the basis of
the capabilities of AMT Capital. AMT Capital accepts such appointment and
agrees to render the services and provide, at its own expense, the office
space, furnishings and equipment, and the personnel required by it to perform
the services on the terms and for the compensation herein provided.
As further delineated on Schedule A of this Agreement, which may be amended
by the parties from time to time, AMT Capital shall provide for, or assist in
managing and supervising all aspects of, the general day-to-day business
activities and operations of the Fund except for investment advisory services,
including custodial, transfer agency, dividend disbursing, accounting, auditing
and legal services. AMT Capital shall discharge such responsibilities subject
to the supervision and direction of the Fund's officers and Board of Directors,
and in compliance with the objectives, policies and limitations set forth in
the Fund's registration statement, Articles of Incorporation, By-Laws and
applicable laws and regulations. All agreements with third parties shall be
subject to review and approval by the Fund's executive officers or Board of
Directors.
AMT Capital will perform all of its obligations under this Agreement in
accordance with applicable law, including without limitation laws against
discrimination.
2. Representation and Warranties of AMT Capital
AMT Capital represents and warrants to the Fund that:
A. AMT Capital is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full power and
authority, corporate and otherwise, to consummate the transactions contemplated
by this Agreement. AMT Capital is duly qualified to carry out its business,
and is in good standing, in the State of New York.
B. The Board of Directors and stockholders of AMT Capital have taken all
action required by law and AMT Capital's Certificate of Incorporation and
By-Laws to authorize the execution and delivery of this Agreement by AMT Capital
and the consummation on behalf of AMT Capital of the transactions contemplated
by this Agreement. This Agreement constitutes a legal, valid and binding
obligation of AMT Capital enforceable in accordance with its terms. Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will result in a breach of, or constitute a
default under, or with lapse of time or giving of notice or both will result in
a breach of or constitute a default under, or otherwise give any party thereto
the right to terminate (a) any mortgage, indenture, loan or credit agreement or
any other agreement or instrument evidencing indebtedness for money borrowed to
which AMT Capital is a party or by which AMT Capital or any of its properties is
bound or affected, or pursuant to which AMT Capital has guaranteed the
indebtedness of any person, or (b) any lease, license, contract or other
agreement to which AMT Capital is a party or by which AMT Capital or any of its
properties is bound or affected. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
result in, or require, the creation or imposition of any mortgage, deed or
trust, pledge, lien, security interest, or other charge or encumbrance of any
nature upon or with respect to any of the properties now or hereafter owned by
AMT Capital.
C. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will
violate any provision of the Certificate of Incorporation or By-
Laws of AMT Capital.
D. Except such as have been obtained and as are in full force and effect
and subject to no dispute, claim or challenge, no permit, license, franchise,
approval, authorization, qualification or consent of, registration or filing
with, or notice to, any governmental authority is required in connection with
the execution and delivery by AMT Capital of this Agreement or in connection
with the consummation by AMT Capital of any transactions contemplated by this
Agreement, and no such permit, license, franchise, approval, authorization,
qualification or consent of, registration or filing with, or notice to any
federal, state or local governmental authority is required in connection with
AMT Capital's business or operations as currently conducted or as currently
contemplated to be conducted. AMT Capital has conducted its business and
operations in compliance with all applicable laws and regulations.
3. Duties of the Fund
A. The Fund will deliver to AMT Capital copies of each of the following
documents and will deliver to AMT Capital all future amendments and supplements,
if any:
(1) A certified copy of the Articles of Incorporation of the Fund as amended
and currently in effect;
(2) A copy of the Fund's By-Laws as amended and currently in effect,
certified by the Secretary of the Fund;
(3) A copy of the resolution of the Fund's Board of Directors authorizing
this Agreement, certified by the Secretary of the Fund;
(4) The Fund's registration statement on Form N-1A as filed with, and
declared effective by, the U.S. Securities and Exchange Commission ("SEC"), and
all amendments thereto;
(5) Each resolution of the Board of Directors of the Fund authorizing the
original issue of its shares, certified by the Secretary of the Fund;
(6) Copies of the resolutions of the Fund's Board of Directors authorizing:
(i) certain officers and employees of AMT Capital to give instructions to the
Fund's custodian and transfer agent as required by agreements with such parties,
and (ii) certain officers and employees of AMT Capital to sign checks and pay
expenses on behalf of the Fund, certified by the Secretary of the Fund;
(7) A copy of the current Investment Advisory Agreement between the Fund
and Harding, Loevner Management, L.P.;
(8) A copy of the Custodian Agreement and Transfer Agency Agreement relating
to the Fund; and
(9) Such other certificates, documents or opinions which AMT Capital may,
in its reasonable discretion, deem necessary or appropriate in the proper
performance of its duties.
B. The Fund will cooperate in providing AMT Capital with all information
reasonably necessary to permit AMT Capital to perform its duties hereunder.
C. The Fund certifies to AMT Capital that, as of the close of business on
the date of this Agreement, it has authorized capitalization of 2,500,000,000
shares of its common stock, $.01 par value (the "Shares"), divided among its
series, and agrees that AMT Capital will be promptly notified from time to time
when the Fund takes corporate action to increase the number of authorized
shares, including restoring redeemed shares held in its treasury to the status
of authorized and unissued shares.
4. Services To Be Obtained Independently By the Fund
The Fund shall, at its own expense, provide for any of its own:
A. Organizational expenses;
B. Services of an independent accountant;
C. Services of outside legal counsel (including such counsel's review of
the Fund's registration statement, proxy materials and other reports and
materials prepared by AMT Capital under this Agreement);
D. Services contracted for by the Fund directly from parties other than
AMT Capital acting as administrator (or subcontracted for by AMT Capital on
behalf of the Fund, subject to review and approval by the Fund's executive
officers or Board of Directors);
E. Trading operations and brokerage fees, commissions and transfer taxes in
connection with the purchase and sale of securities for its investment
portfolio;
F. Investment advisory services;
G. Taxes, insurance premiums and other fees and expenses applicable to its
operation;
H. Costs incidental to any meeting of shareholders including, but not
limited to, legal and accounting fees, proxy filing fees and costs incidental
to the preparation, printing and mailing of any proxy materials;
I. Cost incidental to Directors' meetings, including fees and expenses of
Directors;
J. The salary and expenses of any officer or employee of the Fund who is
not also an officer or employee of AMT Capital;
K. Custodian and depository banks, and all services related thereto;
L. Costs incidental to the preparation, printing and distribution of its
registration statement and any amendments thereto, and shareholder reports,
including printing setup, printing and mailing costs;
M. All registration fees and filing fees required under the securities laws
of the United States and state regulatory authorities;
N. Fidelity bond and director's and officers' liability insurance;
O. Record retention costs of third parties;
P. Distribution fees pursuant to any distribution plan, if and when adopted
pursuant to Rule 12b-1 under the 1940 Act; and
Q. Litigation and indemnification expenses and other extraordinary expenses
not incurred in the ordinary course of the Fund's business.
5. Price, Charges and Instructions
In consideration of the services rendered and expenses assumed by AMT
Capital pursuant to this Agreement, the Fund will pay AMT Capital (i) a monthly
fee at the annual rate of 0.15 % of the Fund's first $500 million of average
daily net assets; 0.10% of the Fund's next $500 million of average daily net
assets; and 0.05% of the Fund's average daily net assets over $1 billion. Such
sum shall be paid in monthly installments by the tenth day of each month for the
previous month.
For purposes of this Section 5, the "average daily net assets" of the
Portfolio shall mean the average of the values placed on the Portfolio's net
assets on each day pursuant to the applicable provisions of the Fund's
Registration Statement, as amended.
In addition, AMT Capital shall be reimbursed for the reasonable cost of any
and all forms, including blank checks and proxies, used by it in communicating
with shareholders, directors, Fund management, or any regulatory agencies on
behalf of the Fund, or especially prepared for use in connection with its
obligations hereunder, as well as the reasonable cost of postage, telephone,
telex and telecopy used in communicating with shareholders, directors, Fund
management, or any regulatory agencies on behalf of the Fund, travel-related
expenses when incurred on official Fund business and microfilm used each year
to record the previous year's transactions in shareholder accounts and computer
tapes used for reasonable permanent storage of records, permanent storage costs
for hard copy Fund records and reasonable cost of insertion of materials in
mailing envelopes by outside firms. Prior to ordering any forms in such supply
as it estimates will be adequate for more than two years' use, AMT Capital shall
obtain the written consent of the Fund. All forms for which AMT Capital has
received reimbursement from the Fund shall be and remain the property of the
Fund until used.
At any time AMT Capital may apply to any executive officer of the Fund or
executive officer of the Fund's investment adviser for instructions, and may
consult with legal counsel for the Fund, if consented to by an executive officer
of the Fund at the expense of the Fund, with respect to any matter arising in
connection with the services to be performed by AMT Capital under this
Agreement and AMT Capital shall not be liable and shall be indemnified by the
Fund for any action taken or omitted by it in good faith in reliance upon such
instructions or upon the opinion of such counsel. AMT Capital shall be
protected and indemnified in acting upon any paper or document of the Fund
reasonably believed by it to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any representative of the Fund, until receipt of written notice
thereof from the Fund, unless an officer of AMT Capital shall have actual
knowledge of such change. AMT Capital shall also be protected and indemnified,
except where a stop order is in effect, in recognizing transfer documents which
AMT Capital reasonably believes to bear the proper manual or facsimile signature
of the officers of the Fund, and the proper counter-signatures of any present or
former transfer agent.
6. Limitation of Liability and Indemnification
A. AMT Capital shall provide its services in a professional manner
customarily provided by leading mutual fund administration companies. AMT
Capital shall be responsible for the performance of only such duties as are set
forth or contemplated herein or contained in instructions given to it by the
Fund which are not contrary to this Agreement. AMT Capital shall have no
liability for any loss or damage resulting from the performance or non-
performance of its duties hereunder unless caused by or resulting from the gross
negligence, bad faith or willful misconduct of AMT Capital, its officers or
employees or the violation by any of such persons of this Agreement. In no
event, however, shall AMT Capital be liable for any consequential damages
including, without limitation, any taxes, penalties, litigation expenses or
other loss or damage resulting from the failure by other persons providing
services to the Fund to conform to applicable legal or regulatory requirements,
or to the Fund's investment policies and restrictions as set forth in its
registration statement, notwithstanding that AMT Capital, in the course of
carrying out its monitoring duties hereunder, failed to discover such failure.
B. The Fund shall indemnify and hold AMT Capital harmless from all loss,
cost, damage and expense, including reasonable expenses for counsel, incurred
by it resulting from any claim, demand, action or suit in connection with any
action or omission by it in the performance of its duties hereunder, or as a
result of acting upon any instructions reasonably believed by it to have been
executed by a duly authorized officer of the Fund, provided that this
indemnification shall not apply to actions or omissions of AMT Capital, its
officers or employees in cases of its or their own negligence or misconduct or
the violation by any of such persons of this Agreement.
C. The Fund will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any liability subject to the indemnification provided above, and if the
Fund elects to assume the defense, such defense shall be conducted by counsel
chosen by the Fund. In the event the Fund elects to assume the defense of any
such suit and retain such counsel, AMT Capital or any of its affiliated persons,
named as defendant or defendants in the suit, may retain additional counsel at
its or their own expense, except that, if the Fund shall have specifically
authorized the retaining of such counsel, then the reasonable expenses for such
counsel shall be reimbursed by the Fund.
7. Confidentiality
AMT Capital agrees on behalf of itself and its directors, officers and
employees to treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund and its prior, present or
potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities hereunder, except (i)
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld when requested to divulge such information by
duly constituted authorities and may not be withheld where AMT Capital may be
exposed to civil or criminal contempt proceedings for failure to comply, and AMT
Capital shall disclose all such records and information to the investment
adviser to the Fund when so requested by the adviser or the Fund.
8. Compliance With Governmental Rules and Regulations
The Fund assumes full responsibility for complying with all applicable
requirements of the Securities Act of 1933, the 1940 Act and the Securities
Exchange Act of 1934, all as amended, and any laws, rules and regulations of
governmental authorities having jurisdiction, except to the extent that AMT
Capital specifically assumes any such obligations under the terms of this
Agreement.
AMT Capital shall maintain and preserve for the period prescribed, such
records relating to the services to be performed by AMT Capital under this
Agreement as are required pursuant to the 1940 Act and the Securities Exchange
Act of 1934, all as amended, and the rules and regulations thereunder. All such
records shall at all times remain the respective properties of the Fund, shall
be readily accessible during normal business hours and shall be promptly
surrendered upon the termination of this Agreement or otherwise on written
request. Records shall be surrendered in usable machine readable form.
9. Status of AMT Capital
AMT Capital shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided herein or authorized by the Fund from time
to time, have no authority to act or represent the Fund in any way or otherwise
be deemed an agent of the Fund.
Nothing herein shall be deemed to limit or restrict AMT Capital's right or
that of any of its affiliates or employees, to engage in any other business or
to devote time and attention to the administration or other related aspects of
any other registered investment company or to render services of any kind to any
other corporation, firm, individual or association.
10. Printed Matter Concerning the Fund or AMT Capital
Neither the Fund nor AMT Capital shall publish and circulate any printed
matter which contains any reference to the other party without its prior written
approval, excepting such printed matter as refers in accurate terms to AMT
Capital's appointment under this Agreement and/or any other agreement between
the Fund and AMT Capital, and excepting as may be required by applicable
laws or regulations.
11. Term, Amendment and Termination
This Agreement may be modified or amended from time to time by mutual
agreement between the parties hereto. The Agreement shall remain in effect for
a period of five years from the date hereof, and shall automatically continue in
effect thereafter unless terminated by either party at the end of such period or
thereafter on 120 days' prior written notice. Upon termination of the
Agreement, the Fund shall pay to AMT Capital such compensation as may be due
under the terms hereof on the date of such termination.
12. Default
If either party materially breaches, materially neglects or materially
fails, in whole or in part, to perform its duties and/or observe its obligations
hereunder (a "Default"), that party is in Default hereunder (the "Defaulting
Party"). The other party hereto may give written notice to the Defaulting Party
and if such Default shall not have been remedied within thirty (30) days after
such written notice is given, then the party giving such notice may terminate
this Agreement by thirty (30) days written notice of such termination to the
Defaulting Party, but such termination shall not affect any rights or
obligations of either party arising from or relating to such Default under the
terms hereof.
In addition to the foregoing, it shall be deemed to be a Default under this
Agreement by AMT Capital if AMT Capital unilaterally terminates or causes the
termination of the Distribution Agreement dated as of ________________, 1996
between the Fund and AMT Capital.
Not in limitation of the foregoing, the Fund may terminate this Agreement
prior to the end of the initial five (5) year term of this Agreement, other
than for a Default by AMT Capital, upon ninety (90) days written notice to AMT
Capital and payment of liquidated damages to AMT Capital as follows: The
liquidated damages amount shall be equal to (i) the aggregate of monthly fees
due or paid to AMT Capital under this Agreement for the last six (6) months
prior to receipt of notice of termination, if this Agreement is so terminated
by the Fund in its first or second year, or (ii) the aggregate of the monthly
fees dues to AMT Capital under this Agreement for the last two (2) months prior
to receipt of notice of termination, if this Agreement is so terminated by the
Fund in its third, fourth, or fifth year. Upon payment of such sum, AMT Capital
shall have no further claim to fees due under this Agreement for periods after
the termination date.
The provisions of this Section 12 shall not limit either party's termination
rights under Section 11 of this Agreement. The provisions of Section 11 and
this Section 12 shall govern the method of termination of this Agreement, but
shall not limit any other rights or remedies of either party in the event of any
breach of this Agreement by the other party.
13. Notices
Any notice or other communication authorized or required hereunder shall
be in writing or by confirming telegram, cable, telex or facsimile sending
device. Notice shall be addressed to the Fund at 50 Division Street, Suite
401, Somerville, New Jersey 08876, Attention: President; and to AMT Capital
Services, Inc., 600 Fifth Avenue, 26th Floor, New York, New York 10020,
Attention: Carla E. Dearing. Either party may designate a different address
by notice to the other party. Any such notice or other communication shall be
deemed given when actually received.
14. Non-Assignability
This Agreement shall not be assigned by either of the parties hereto without
the prior consent in writing of the other party. Any purported assignment in
violation of this Agreement shall be void and of no effect.
15. Successors
This Agreement shall be binding on and shall inure to the benefit of the
Fund and AMT Capital, and their respective successors and permitted assigns.
16. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: HARDING, LOEVNER FUNDS, INC.
_____________________ By:______________________
David R. Loevner,
Secretary President
ATTEST: AMT CAPITAL SERVICES, INC.
_____________________ By:______________________
William E. Vastardis, Carla E. Dearing,
Senior Vice President President
SCHEDULE A
to
ADMINISTRATION AGREEMENT
between
HARDING, LOEVNER FUNDS, INC.
and
AMT CAPITAL SERVICES, INC.
Pursuant to the attached Administration Agreement, AMT Capital Services, Inc.
("AMT Capital") will provide the following services to Harding, Loevner Funds,
Inc. (the "Fund"):
1) Supervision of all third party vendors to the Fund - AMT Capital will
supervise the quality of service and competitiveness of fees of all Fund
vendors, except the investment adviser. AMT Capital will develop day-to-
day working relationships with existing vendors as well as evaluate
alternative vendor candidates, as reasonably requested by the Fund's
officers. The vendors that AMT Capital will be responsible for include:
a) Transfer and Dividend Disbursing Agent, Fund Accounting Agent and
Custodian - AMT Capital will make necessary efforts to ensure that
all legally required functions are performed at a high quality
level and at a competitive fee. AMT Capital will strive to enhance
the service levels as well as reporting capabilities.
b) Outside Counsel, Independent Accountant and Other Vendors - AMT
Capital will coordinate communications with all other Fund vendors
with a goal of enhancing service levels while controlling costs.
c) Insurance Providers - AMT Capital will identify potential insurance
providers and evaluate the comparative terms and costs of fidelity
bond, E&O and D&O coverage. AMT Capital will continually monitor
the appropriateness of the chosen providers and coverage.
2) Monitor and Report on Compliance - AMT Capital will monitor the Fund's
compliance with the regulations of Sub-Chapter M of the Internal Revenue
Code with particular emphasis on the asset diversification, income and
short-short tests. AMT Capital will monitor the Fund's compliance with
the securities laws, particularly the Investment Company Act of 1940,
with particular emphasis on the diversification and voting stock tests.
AMT Capital will monitor all Prospectus, Statement of Additional
Information and Board-imposed compliance limitations. AMT Capital will
report compliance status in all required areas in a format and at a
frequency mutually agreed upon between Fund officers and directors and
AMT Capital, including a quarterly review and reporting pursuant to the
Fund's Code of Ethics policy.
3) Prepare and Monitor Annual Compliance and Administrative Calendar - AMT
Capital will prepare an annual calendar which will include key dates in
the operations of the Fund, such as Board and Audit Committee meetings
and mailings, filing dates, compliance monitoring and other mutually
agreed upon events. AMT Capital will monitor the calendar and report on
status of activity on a regular basis to Fund officers.
4) Board of Directors' Meetings - AMT Capital will prepare and mail all
necessary Resolutions, Agenda, Powers of Attorney and other material in
advance of each Board meeting, and will prepare and mail all Board
written consents. AMT Capital will do a presentation to the Board of
the status of all administrative and operations functions at each
meeting. AMT Capital will coordinate other Vendor presentations to the
Board when required. AMT Capital will pay all required directors' fees
and expenses, from the Fund's accounts maintained with its custodian, on
a timely and accurate basis.
5) Monthly Fund Management Reporting - AMT Capital will collect, review and
summarize all Vendor reports. AMT Capital will prepare a monthly
administrative report which will include the financial statements, a
compliance summary, expense ratio calculations, portfolio turnover ratio
calculations and performance calculations, and will prepare other
reasonably requested activity reports.
6) Shareholder Reports - AMT Capital will prepare the semi-annual and annual
financial reports and footnotes required by SEC regulation for reporting
to the shareholders and the SEC. AMT Capital will coordinate with the
Investment Adviser and Independent Accountants to obtain the appropriate
letters to the shareholders. AMT Capital will coordinate the printing of
the reports and mail to the shareholders as well as file copies with the
appropriate regulatory authorities. AMT Capital will respond to any
shareholder inquiries under the direction of the Fund's officers.
7) Tax Filings - AMT Capital will prepare for Fund officer review all
necessary tax returns and file such returns on a timely basis with the
appropriate regulatory authorities. These will include all Federal
corporate and excise tax returns, state returns, and 1099 MISC returns
for directors fees and if required, for fees to third party vendors and
if, required.
8) SEC Filings - AMT Capital will prepare for Fund officer review all
necessary filings and make such filings on a timely basis with the SEC.
These will include Form N-SAR, Rule 24e-2 and 24f-2 filings, proxy
materials, post-effective amendments to Form N-1A and any other SEC
filings.
9) Blue Sky Monitoring and Filings - AMT Capital will monitor Blue Sky
compliance in each jurisdiction and perform all administrative functions,
including the making of necessary filings on behalf of the Fund, under
the supervision of the Fund's Distributor. AMT Capital will report the
status of the Fund's registration of each series of Shares on a regular
basis to the Fund's directors and officers.
10) Other Filings - On behalf of the Fund, AMT Capital will prepare and file
any other required documents with the appropriate jurisdiction, including
abandoned property reports and state corporate law filings.
11) Holdings Reconciliations - AMT Capital will review holdings
reconciliations between the Custodian and Fund Accounting Agent and
between the Investment Adviser and the Custodian/Fund Accounting Agent.
All discrepancies will be researched and reported promptly to the Fund's
officers or directors.
12) Proxy Statement and Annual Meeting - AMT Capital will prepare all proxy
materials, file them with the SEC and mail them to the shareholders. AMT
Capital will set up the Annual Meeting, prepare the agenda and script,
tabulate and solicit votes if requested to do so by the Fund's officers
or directors and perform the duties of the inspector of elections.
13) Fund Expenses - AMT Capital will review all Fund expenses and strive to
create efficiencies and economies of scale wherever possible. AMT
Capital, under supervision and direction of Fund officers, will pay all
Fund bills in an accurate and timely manner from the Fund's accounts
maintained with its custodian.
14) New Series Registration - AMT Capital will assist management in the
preparation of and filing with the SEC of all new Series or other changes
to the Fund's prospectus and Statement of Additional Information.
15) General - AMT Capital will make its staff available to Fund management
to assist in or to respond to any reasonable request for Fund- or
industry-related information. If requested, AMT Capital will make its
facilities available for meetings of the Fund's officers or directors.
AMT Capital will assist in any examination of the Fund by the SEC, IRS or
any other regulatory agency.
