<PAGE>
Filed with the Securities and Exchange Commission on APRIL 20, 1998.
1933 Act Registration File No. 33-24611
1940 Act File No. 811-5659
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 12 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 14 [X]
HEITMAN SECURITIES TRUST
(Exact Name of Registrant as Specified in Charter)
180 NORTH LASALLE STREET, SUITE 3600, CHICAGO, IL 60601
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 849-4150
Nancy B. Lynn, Secretary Copy to:
HEITMAN SECURITIES TRUST Philip H. Newman
180 North LaSalle Street, Suite 3600 Goodwin, Procter & Hoar LLP
Chicago, IL 60601 One Exchange Place
(Name and Address of Agent for Service) Boston, MA 02109-2881
It is proposed that this filing will become effective
[_] immediately upon filing pursuant to paragraph (b)
[_] on __________ pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)[(1)]
[_] on __________ pursuant to paragraph (a)[(1)]
[_] 75 days after filing pursuant to paragraph (a)(2)]
[_] on __________ pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of its Common Stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's Rule 24f-2 Notice for its most recent
fiscal year was filed on March 31, 1998.
<PAGE>
CROSS-REFERENCE SHEET
Pursuant to Rule 481(a)
HEITMAN SECURITIES TRUST
Items Required By Form N-1A
PART A - PROSPECTUS-HEITMAN/PRA INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
ADVISOR CLASS
ITEM No. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------------
<S> <C> <C>
1. Cover Cover Page
2. Synopsis Transaction and Expense Data
3. Condensed Financial Information Financial Highlights; Performance Information
4. General Description of Registrant Cover Page; Investment Objective and Policies;
Additional Information
5. Management of the Fund Management of the Fund; Additional Information
5A. Management's Discussion of Fund Performance Not Applicable
6. Capital Stock and Other Securities Income Dividends and Capital Gains Distributions;
Additional Information
7. Purchase of Securities Being Offered Purchase of Shares; Determination of Net Asset Value
8. Redemption or Repurchase Redemptions
9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE>
PART A - PROSPECTUS-ADVISOR CLASS
<TABLE>
<CAPTION>
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ ------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Transaction and Expense Data
3. Condensed Financial Information Financial Highlights; Performance Information
4. General Description of Registrant Cover Page; Investment Objective and Policies;
Additional Information
5. Management of the Fund Management of the Fund; Additional Information
5A. Management's Discussion of Fund Performance Not Applicable
6. Capital Stock and Other Securities Income Dividends and Capital Gains Distributions;
Additional Information
7. Purchase of Securities Being Offered Purchase of Shares; Determination of Net Asset Value
8. Redemption or Repurchase Redemptions
9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
Pursuant to Rule 481(a)
HEITMAN SECURITIES TRUST
Items Required By Form N-1A
PART B - STATEMENT OF ADDITIONAL INFORMATION -HEITMAN/PRA INSTITUTIONAL AND
ADVISOR CLASS
<TABLE>
<CAPTION>
CAPTION IN STATEMENT OF
ITEM NO. ITEM CAPTION ADDITIONAL INFORMATION
- -------- ------------ ----------------------
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information; Description of Trust
13. Investment Objectives Additional Information Regarding and Policies
Investment Policies And Limitations
14. Management of the Fund Management of the Trust
15. Control Persons and Principal Holders of Investment Manager; Description of Trust
Securities
16. Investment Advisory Other Services Investment Manager; Administrative, Accounting
and Distribution Services
17. Brokerage Allocation and Other Practices Execution of Portfolio Transactions
18. Capital Stock and Other Securities Description of Trust
19. Purchase, Redemption Pricing of Securities Being Purchase of Shares; Redemption of Shares;
Offered Valuation of Shares
20. Tax Status Taxes
21. Underwriters Administrative, Accounting, Distribution and
Shareholder Services
22. Calculation of Performance Advertising and Calculation of Performance Data
23. Financial Statements Financial Statements; Report of Independent
Auditors
</TABLE>
<PAGE>
HEITMAN SECURITIES TRUST
HEITMAN/PRA ADVISOR CLASS
AMENDMENT DATED MAY 1, 1998
TO THE PROSPECTUS DATED MAY 1, 1997
The prospectus dated May 1, 1997 is hereby amended as follows:
THE FOLLOWING SECTION CALLED "PENDING REORGANIZATION" IS ADDED TO THE
PROSPECTUS:
On January 6, 1998, Heitman Securities Trust (the "Trust") on behalf of the
Heitman Real Estate Fund (the "Fund") entered into an Agreement and Plan of
Reorganization (the "Agreement") with UAM Funds Trust (the "UAM Trust") on
behalf of the Heitman Real Estate Portfolio (the "UAM Portfolio"). The
Agreement provides for (i) the transfer of all the assets of the Fund to the
UAM Portfolio in exchange for shares of the UAM Portfolio and the assumption
by the UAM Portfolio of all liabilities of the Fund; and (ii) the distribution
of shares of the UAM Portfolio to the then-existing shareholders of the Fund
in liquidation of the Fund (the "Reorganization"). The UAM Portfolio is a
newly formed series of the UAM Trust with no prior operations that has been
established for the purpose of effecting the Reorganization and continuing the
operations of the Fund after the Reorganization. The UAM Portfolio has the
identical investment objective as the Fund and substantially the same
investment policies as the Fund. Heitman/PRA Securities Advisors, Inc., the
investment adviser of the Fund, will also serve as the investment adviser of
the UAM Portfolio.
Under the Agreement, consummation of the Reorganization is subject to
satisfaction of various conditions, including approval by shareholders of the
Fund. At a special meeting of shareholders of the Fund held on February 27,
1998, shareholders of the Fund approved the Agreement. It is anticipated that
the Reorganization will be consummated on or prior to June 30, 1998.
Shareholders of the Fund will receive notice upon consummation of the
Reorganization.
THE FOLLOWING INFORMATION IS ADDED TO THE SECTION CALLED "MANAGEMENT OF THE
FUND"
Effective March 2, 1998, the Trust entered into agreements with (i) UAM Fund
Services, Inc. ("UAMFSI"), a wholly owned subsidiary of United Asset
Management Corporation ("UAM") to provide administrative, fund accounting,
dividend disbursing and transfer agency services; and (ii) The Chase Manhattan
Bank, N.A. ("Chase") to provide custody services. UAMFSI has subcontracted
with Chase Global Funds Services Company ("CGFSC"), an affiliate of Chase, to
perform certain of these services. The principal office of UAMFSI is located
at 211 Congress Street, Boston, MA 02110 and the principal office of CGFSC is
located at 73 Tremont Street, Boston, MA 02108. UAMFSI, UAM, Chase and CGFSC
have been appointed by UAM Trust to perform substantially the same services
for UAM Portfolio following consummation of the Reorganization.
ACG Capital Corporation serves as distributor of the Advisor Class shares
of the Fund. Effective March 10, 1998, the Trust entered into an agreement
with ACG Capital Corporation to provide distribution service to the Fund with
respect to the Institutional Class shares of the Fund.
THE FOLLOWING INFORMATION IS ADDED TO THE SECTION CALLED "PURCHASE OF
SHARES"
Purchases and redemptions of Advisor Class shares should be made as follows:
Applications to purchase shares of the Fund should be sent to: Heitman
Securities Trust, c/o Chase Global Funds Services Company, P.O. Box 2798,
Boston, MA 02208-2798. To purchase shares by wire, telephone the Heitman
Securities Trust at 1-800-435-1405 and provide the account name, address,
telephone number, social security or taxpayer identification number, the
Fund's name, the amount being wired and the name of the bank wiring the funds.
Wire transfers should be sent to: The Chase Manhattan Bank, ABA #021000021,
Heitman Real Estate Fund Advisor Class, DDA Acct. #9102772952, Your Account
Number, Your Account Name, Wire Control Number (which will be assigned by
Chase when you call). Additional investment can be made at any time by mailing
a check to Heitman Securities Trust at the above address or by wiring money to
Chase using the instructions outlined above. Requests for redemptions should
be addressed to the Heitman Securities Trust at the above address.
For all other inquiries regarding shareholder services, please call Heitman
Securities Trust at 1-800-435-1405.
1
<PAGE>
THE "INDIVIDUAL RETIREMENT ACCOUNTS" SECTION OF THE PROSPECTUS UNDER THE
SECTION "PURCHASE OF SHARES" IS HEREBY REPLACED IN ITS ENTIRETY AS FOLLOWS:
Shares of the Fund may be purchased for tax-deferred retirement plans such
as individual retirement accounts ("IRAs"). Application forms and brochures
describing investments for IRAs can be obtained from CGFSC by calling (800)
435-1405. UAM Trust Company makes available its services as an IRA custodian
for each shareholder account that is established as an IRA. UAM Trust Company
charges shareholders no custodial fee.
THE "TRANSACTIONAL AND EXPENSE DATA" SECTION OF THE PROSPECTUS IS HEREBY
REPLACED IN ITS ENTIRETY BY THE FOLLOWING:
The following table sets forth the costs and expenses that an investor in
Advisor Class shares of the Fund will incur directly or indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
--------------------------------
<S> <C>
Maximum Sales Load Imposed on Purchases................................ 4.75%
Maximum Sales Load Imposed on Reinvested Dividends..................... None
Deferred Sales Load.................................................... None
Redemption Fees........................................................ None
Exchange Fees.......................................................... None
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS)
----------------------------------------------------------
<S> <C> <C>
Management Fees................................................ 0.70%
12b-1 Fee (1).................................................. 0.25%
Other Expenses:
Shareholding Servicing Expenses.............................. 0.25%
Other Fees and Expenses...................................... 0.39%
Total Other Expenses......................................... 0.64%
Total Fund Operating Expenses.................................. 1.59%
</TABLE>
- -------
(1) Because the 12b-1 fee is an annual fee charged against the assets of the
Fund, long-term shareholders may indirectly pay more in 12b-1 fees than
the economic equivalent of the maximum front-end sales charge permitted
under applicable rules.
EXAMPLE:
<TABLE>
<CAPTION>
1 YEAR 3 YEAR 5 YEAR 10 YEAR
------ ------ ------ -------
<S> <C> <C> <C> <C>
The following example illustrates the expenses you
would pay on a $1,000 investment, assuming (1) a
5% annual rate of return and (2) redemption at
the end of each period........................... $63 $95 $130 $227
</TABLE>
Except as otherwise indicated, all information in the Transaction and
Expense Data table is based on actual expenses and average daily net assets of
the Fund for the fiscal year ended December 31, 1997. The purpose of the table
is to assist an investor in understanding the various costs and expenses that
an investor will bear directly or indirectly. The Example provided with the
table should not be considered a representation of past or future expenses or
performance. Actual expenses may be more or less than those shown.
2
<PAGE>
THE "FINANCIAL HIGHLIGHTS" SECTION OF THE PROSPECTUS IS HEREBY REPLACED IN
ITS ENTIRETY BY THE FOLLOWING:
The following table provides selected per share information for a share
outstanding throughout the period presented for the Fund's Advisor Class
shares. The financial highlights for the year ended December 31, 1997 have
been derived from the Financial Statements audited by Price Waterhouse LLP as
indicated in their report dated February 23, 1998 on the Fund's financial
statements as of December 31, 1997. The financial highlights for all periods
prior to January 1, 1996 have been audited by Arthur Andersen LLP. These
financial highlights should be read in conjunction with the Fund's financial
statements and notes thereto which are incorporated by reference in the
Statement of Additional Information under "Financial Statements." For further
information about the performance of the Fund, see the Fund's Annual Report,
which may be obtained without charge by contacting the Fund at 1-800-435-1405.
<TABLE>
<CAPTION>
FOR THE FISCAL FOR THE FISCAL MAY 15, 1995+
YEAR ENDED YEAR ENDED THROUGH
DECEMBER 31, 1997 DECEMBER 31,1996 DECEMBER 31, 1995
----------------- ---------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 10.98 $ 8.67 $ 8.00
------- ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(a)............. 0.35 0.31 0.23
Net realized and
unrealized gain on
investments........... 1.80 2.84 0.80
------- ------- ------
Total from investment
operations.......... 2.15 3.15 1.03
------- ------- ------
DISTRIBUTIONS
From net investment
income(a)............. (0.35) (0.31) (0.23)
In excess of net
investment income..... (0.04) (0.12) 0.00
From net realized gain
on investments........ (2.24) (0.41) 0.00
From tax return of
capital(b)............ (0.00) (0.00) (0.13)
------- ------- ------
Total distributions.. (2.63) (0.84) (0.36)
------- ------- ------
NET ASSET VALUE, END OF
PERIOD.................. $ 10.50 $ 10.98 $ 8.67
======= ======= ======
Total Return(c).......... 20.44% 37.44% 13.19%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's)..... $85,222 $79,805 $5,520
Ratio of expenses to
average net assets.... 1.59% 1.73% 1.99%(*)(d)
Ratio of net investment
income to average net
assets(a)............. 3.14% 3.91% 4.27%(*)(d)
Portfolio Turnover..... 89.51% 59.88% 65.33%(*)
Average commission rate
paid(e)............... $0.0425 $0.0504 --
</TABLE>
- -------
* Annualized.
+ Commencement of Operations.
(a) Distributions from REIT investments generally include a return of
capital, which the Fund records as a reduction in the cost basis of its
investments.
(b) Historically, the Fund has distributed to its shareholders amounts
approximating dividends received from the REITs. Such distributions may
include a portion which may be a return of capital.
(c) This result does not include the sales charge. If the charge had been
included, the return would have been lower. The total return figure for
the fiscal period ended December 31, 1995 has not been annualized.
(d) During 1995, the Advisor agreed to reimburse a portion of the Advisor
Shares' expenses. Without reimbursement, the expense ratio would have
been 5.34% and the ratio of net investment income to average net assets
would have been 0.92%.
(e) Required disclosure for fiscal years beginning after September 1, 1995
pursuant to SEC regulations.
3
<PAGE>
HEITMAN SECURITIES TRUST
HEITMAN/PRA INSTITUTIONAL CLASS
AMENDMENT DATED MAY 1, 1998
TO THE PROSPECTUS DATED MAY 1, 1997
The prospectus dated May 1, 1997 is hereby amended as follows:
THE FOLLOWING SECTION "PENDING REORGANIZATION" IS ADDED TO THE PROSPECTUS:
On January 6, 1998, Heitman Securities Trust (the "Trust") on behalf of the
Heitman Real Estate Fund (the "Fund") entered into an Agreement and Plan of
Reorganization (the "Agreement") with UAM Funds Trust (the "UAM Trust") on
behalf of the Heitman Real Estate Portfolio (the "UAM Portfolio"). The
Agreement provides for (i) the transfer of all the assets of the Fund to the
UAM Portfolio in exchange for shares of the UAM Portfolio and the assumption
by the UAM Portfolio of all liabilities of the Fund; and (ii) the distribution
of shares of the UAM Portfolio to the then-existing shareholders of the Fund
in liquidation of the Fund (the "Reorganization"). The UAM Portfolio is a
newly formed series of the UAM Trust with no prior operations that has been
established for the purpose of effecting the Reorganization and continuing the
operations of the Fund after the Reorganization. The UAM Portfolio has the
identical investment objective as the Fund and substantially the same
investment policies as the Fund. Heitman/PRA Securities Advisors, Inc., the
investment adviser of the Fund, will also serve as the investment adviser of
the UAM Portfolio.
Under the Agreement, consummation of the Reorganization is subject to
satisfaction of various conditions, including approval by shareholders of the
Fund. At a special meeting of shareholders of the Fund held on February 27,
1998, shareholders of the Fund approved the Agreement. It is anticipated that
the Reorganization will be consummated on or prior to June 30, 1998.
Shareholders of the Fund will receive notice upon consummation of the
Reorganization.
THE FOLLOWING INFORMATION IS ADDED TO THE SECTION CALLED "MANAGEMENT OF THE
FUND"
Effective March 2, 1998, the Trust entered into agreements with (i) UAM Fund
Services, Inc. ("UAMFSI"), a wholly owned subsidiary of United Asset
Management Corporation ("UAM") to provide administrative, fund accounting,
dividend disbursing and transfer agency services; and (ii) The Chase Manhattan
Bank, N.A. ("Chase") to provide custody services. UAMFSI has subcontracted
with Chase Global Funds Services Company ("CGFSC"), an affiliate of Chase, to
perform certain of these services. The principal office of UAMFSI is located
at 211 Congress Street, Boston, MA 02110 and the principal office of CGFSC is
located at 73 Tremont Street, Boston, MA 02108. UAMFSI, UAM, Chase and CGFSC
have been appointed by UAM Trust to perform substantially the same services
for UAM Portfolio following consummation of the Reorganization.
Effective March 10, 1998, the Trust entered into an agreement with ACG
Capital Corporation to provide distribution service to the Fund with respect
to the Institutional Class shares of the Fund. ACG also serves as distributor
of the Advisor Class shares of the Fund.
THE FOLLOWING INFORMATION IS ADDED TO THE SECTION CALLED "PURCHASE OF SHARES"
Purchases and redemptions of Institutional Class shares should be made as
follows: Applications to purchase shares of the Fund should be sent to:
Heitman Securities Trust, c/o Chase Global Funds Services Company, P.O. Box
2798, Boston, MA 02208-2798. To purchase shares by wire, telephone the Heitman
Securities Trust at 1-800-435-1405 and provide the account name, address,
telephone number, social security or taxpayer identification number, the
Fund's name, the amount being wired and the name of the bank wiring the funds.
Wire transfers should be sent to : The Chase Manhattan Bank, ABA #021000021,
Heitman Real Estate Fund Institutional Class, DDA Acct. #9102772952, Your
Account Number, Your Account Name, Wire Control Number (which will be assigned
by Chase when you call). Additional investment can be made at any time by
mailing a check to Heitman Securities Trust at the above address or by wiring
money to Chase using the instructions outlined above. Requests for redemptions
should be addressed to the Heitman Securities Trust at the above address.
For all other inquiries regarding shareholder services, please call Heitman
Securities Trust at 1-800-435-1405.
1
<PAGE>
THE "INDIVIDUAL RETIREMENT ACCOUNTS" SECTION OF THE PROSPECTUS UNDER THE
SECTION "PURCHASE OF SHARES" IS HEREBY REPLACED IN ITS ENTIRETY AS FOLLOWS:
Shares of the Fund may be purchased for tax-deferred retirement plans such
as individual retirement accounts ("IRAs"). Application forms and brochures
describing investments for IRAs can be obtained from CGFSC by calling (800)
435-1405. UAM Trust Company makes available its services as an IRA custodian
for each shareholder account that is established as an IRA. UAM Trust Company
charges shareholders no custodial fee.
THE "TRANSACTIONAL AND EXPENSE DATA" SECTION OF THE PROSPECTUS IS HEREBY
REPLACED IN ITS ENTIRETY BY THE FOLLOWING:
The following table sets forth the costs and expenses that an investor in
Institutional Class shares of the Fund will incur directly or indirectly.
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases.......................... None
Maximum Sales Load Imposed on Reinvested Dividends............... None
Deferred Sales Load.............................................. None
Redemption Fees.................................................. None
Exchange Fees.................................................... None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Management Fees.................................................. 0.70%
Other Expenses:
Professional Fees.............................................. 0.06%
Trustee Fees and Expenses...................................... 0.04%
Other Fees and Expenses........................................ 0.29%
Total Other Expenses........................................... 0.39%
Total Fund Operating Expenses.................................... 1.09%
</TABLE>
EXAMPLE:
<TABLE>
<CAPTION>
1 YEAR 3 YEAR 5 YEAR 10 YEAR
------ ------ ------ -------
<S> <C> <C> <C> <C>
The following example illustrates the expenses
you would pay on a $1,000 investment, assuming
(1) a 5% annual rate of return and (2)
redemption at the end of each period.......... $11 $35 $60 $133
</TABLE>
Except as otherwise indicated, all information in the Transaction and
Expense Data table is based on actual expenses and average daily net assets of
the Fund for the fiscal year ended December 31, 1997. The purpose of the table
is to assist an investor in understanding the various costs and expenses that
an investor will bear directly or indirectly. The Example provided with the
table should not be considered a representation of past or future expenses or
performance. Actual expenses may be more or less than those shown.
2
<PAGE>
THE "FINANCIAL HIGHLIGHTS" SECTION OF THE PROSPECTUS IS HEREBY REPLACED IN ITS
ENTIRETY BY THE FOLLOWING:
The following table provides selected per share information for a share
outstanding throughout the period presented for the Fund's Institutional Class
shares. The financial highlights for the year ended December 31, 1997 have
been derived from the Financial Statements audited by Price Waterhouse LLP as
indicated in their report dated February 23, 1998 on the Fund's financial
statements as of December 31, 1997. The financial highlights for all periods
prior to January 1, 1996 have been audited by Arthur Andersen LLP. These
financial highlights should be read in conjunction with the Fund's financial
statements and notes thereto which are incorporated by reference in the
Statement of Additional Information under "Financial Statements." For further
information about the performance of the Fund, see the Fund's Annual Report,
which may be obtained without charge by contacting the Fund at 1-800-435-1405.
<TABLE>
<CAPTION>
FOR THE THREE-MONTH FOR THE
FISCAL YEARS PERIOD ENDED FISCAL YEARS
ENDED DEC. 31, DEC. 31, ENDED SEPT. 30,
---------------------------- ------------ -------------------
1997 1996 1995 1994 1994 1993
-------- -------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 10.96 $ 8.65 $ 8.30 $ 9.23 $ 10.95 $ 8.29
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(a)............ 0.40 0.37 0.33 0.10 0.32 0.40
Net realized and
unrealized gain
(loss) on
investments.......... 1.82 2.82 0.53 (0.05) (0.92) 2.67
-------- -------- -------- -------- -------- --------
Total from
investment
operations......... 2.22 3.19 0.86 0.05 (0.60) 3.07
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
From net investment
income(a)............ (0.40) (0.37) (0.33) (0.10) (0.31) (0.41)
In excess of net
investment income.... (0.05) (0.10) 0.00 0.00 0.00 0.00
From net realized gain
on investments....... (2.24) (0.41) 0.00 (0.77) (0.67) 0.00
From tax return of
capital(b)........... (0.00) 0.00 (0.18) (0.11) (0.14) 0.00
-------- -------- -------- -------- -------- --------
Total
distributions...... (2.69) (0.88) (0.51) (0.98) (1.12) (0.41)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD................. $ 10.49 $ 10.96 $ 8.65 $ 8.30 $ 9.23 $ 10.95
======== ======== ======== ======== ======== ========
Total Return............ 21.12% 38.06% 10.87% 0.65%(d) (5.22)% 37.76%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's).... $134,746 $129,275 $ 95,692 $105,569 $116,268 $141,672
Ratio of expenses to
average net assets... 1.09% 1.23% 1.29% 1.28%* 1.22 % 1.24%
Ratio of net
investment income to
average net
assets(a)............ 3.57% 4.09% 3.97% 4.35%* 2.87 % 4.37%
Portfolio Turnover.... 89.51% 59.88% 65.33% 37.55%* 90.11 % 61.47%
Average commission rate
paid(c)................ $ 0.0425 $ 0.0504 -- -- -- --
</TABLE>
- -------
* Annualized.
(a) Distributions from REIT investments generally include a return of capital.
For financial reporting purposes, through September 30, 1993, the Fund
recorded all distributions received, including the returns of capital, as
net investment income.
(b) Historically, the Fund has distributed to its shareholders amounts
approximating dividends received from the REITs. As more fully explained
in Note 2 to the financial statements, the Fund, for the fiscal year ended
September 30, 1994, adopted an accounting pronouncement affecting the
presentation of distributions to shareholders. The financial highlights
for the period ended September 30, 1989 and for the years ended September
30, 1990 through 1993 have not been restated.
(c) Required disclosure for fiscal years beginning after September 1, 1995
pursuant to SEC regulations.
(d) The total returns for the fiscal periods ended December 31, 1994 and
September 30, 1989 have not been annualized.
3
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
JANUARY 4,
FOR THE FISCAL YEARS 1989 (EFFECTIVE
ENDED SEPT. 30, DATE) TO
------------------------- SEPT. 30,
1992 1991 1990 1989
------- ------- ------- ---------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................ $ 7.66 $ 6.99 $ 10.25 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a)......... 0.45 0.49 0.64 0.40(e)
Net realized and unrealized gain
(loss) on investments........... 0.63 0.67 (3.16) 0.25
------- ------- ------- -------
Total from investment
operations.................... 1.08 1.16 (2.52) 0.65
------- ------- ------- -------
DISTRIBUTIONS
From net investment income(a).... (0.45) (0.49) (0.64) (0.40)
In excess of net investment
income.......................... 0.00 0.00 0.00 0.00
From net realized gain on
investments..................... 0.00 0.00 (0.10) 0.00
From tax return of capital(b).... 0.00 0.00 0.00 0.00
------- ------- ------- -------
Total distributions............ (0.45) (0.49) (0.74) (0.40)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD..... $ 8.29 $ 7.66 $ 6.99 $ 10.25
======= ======= ======= =======
Total Return....................... 14.49% 19.56% (26.11)% 4.82%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's).......................... $66,521 $54,880 $18,481 $23,174
Ratio of expenses to average net
assets.......................... 1.37% 1.25% 1.54% 0.90%(e)
Ratio of net investment income to
average net assets(a)........... 5.75% 7.36% 7.25% 3.88%
Portfolio Turnover............... 28.05% 16.24% 24.98% 12.96%
Average commission rate paid(c).... -- -- -- --
</TABLE>
- -------
* Annualized.
(a) Distributions from REIT investments generally include a return of capital.
For financial reporting purposes, through September 30, 1993, the Fund
recorded all distributions received, including the returns of capital, as
net investment income.
(b) Historically, the Fund has distributed to its shareholders amounts
approximating dividends received from the REITs. As more fully explained
in Note 2 to the financial statements, the Fund, for the fiscal year ended
September 30, 1994, adopted an accounting pronouncement affecting the
presentation of distributions to shareholders. The financial highlights
for the period ended September 30, 1989 and for the years ended September
30, 1990 through 1993 have not been restated.
(c) Required disclosure for fiscal years beginning after September 1, 1995
pursuant to SEC regulations.
(d) The total returns for the fiscal periods ended December 31, 1994 and
September 30, 1989 have not been annualized.
(e) The Investment Manager has reimbursed the Fund for certain expenses during
the period from the effective date until investment operations commenced.
The ratio of expenses to average net assets for the period January 4, 1989
to September 30, 1989 would otherwise have been 1.00%.
4
<PAGE>
HEITMAN SECURITIES TRUST
Heitman/PRA Institutional Class
Heitman/PRA Advisor Class
Amendment dated May 1, 1998
To the Statement of Additional Information dated May 1, 1997
The Statement of Additional Information dated May 1, 1997 is hereby amended as
follows:
The following information is added to the section called "MANAGEMENT OF THE
TRUST"
No officer or employee of Heitman/PRA Advisors, or of its affiliates, receives
any compensation from the Trust for serving as an officer or Trustee of the
Trust. The Trust pays each Trustee who is not an officer or employee of
Heitman/PRA Advisors, or of its affiliates, $10,000 per annum, $1,000 per
quarterly meeting attended, $500 for attendance by phone and reimburses each
such Trustee for travel and out-of-pocket expenses. During the calendar year
ended December 31, 1997, the Trustees of the Trust received compensation in the
amounts set forth in the table below:
<TABLE>
<CAPTION>
Pension/Retirement
------------------
Aggregate Compensation Benefits Accrued as Part
---------------------- ------------------------
Name from the Fund of Fund Expenses *
---- ------------- ------------------
<S> <C> <C>
Robert W. Beeney $15,000 $0
Donald L. Foote $14,000 0
John F. Goydas $14,000 0
Maurice Wiener $15,000 0
</TABLE>
* The Trust does not provide retirement or pension benefits to any of its
Trustees.
The following information is added to the section called "INVESTMENT MANAGER"
Heitman/PRA Advisors serves as investment advisor to the Fund pursuant to an
Investment Management Agreement dated January 31, 1995. The Investment
Management Agreement was last approved by Board of Trustees, including the
unanimous vote of the Board of the Fund's Trustees that are not parties to the
agreement or "interested persons" of the Fund, on February 23, 1998.
During the fiscal years ended December 31, 1997, 1996, and 1995, the fees paid
to Heitman/PRA Advisors were $1,489,121, $992,968, and $724,658, respectively.
The following information is added to the section called "ADMINISTRATIVE,
ACCOUNTING, DISTRIBUTION AND SHAREHOLDER SERVICES"
Prior to March 2, 1998, Rodney Square Management Corporation ("Rodney Square")
provided certain administrative and accounting services to the Fund pursuant to
an Amended and Restated Administration Agreement ("Administrative Agreement")
and Amended and Restated Accounting Services Agreement ("Accounting Agreement)
each dated as of November 14, 1996. Effective March 2, 1998, the Trust has
entered into an agreement with UAM Fund Services, Inc. ("UAMFSI"), a wholly
owned subsidiary of United Asset Management Corporation ("UAM") to provide
administrative, fund accounting, dividend disbursing and transfer agency
services. UAMFSI has subcontracted with Chase Global Funds Services Company
("CGFSC"), an affiliate of Chase, to perform certain of these services. The
principal office of UAMFSI is located at 211 Congress Street, Boston, MA 02110
and the principal office of CGFSC is located at 73 Tremont Street, Boston, MA
02108.
<PAGE>
Prior to March 10, 1998, Rodney Square Distributors, Inc. ("RSD") provided
distribution services to the Fund with respect to the Heitman/PRA Institutional
Class of shares of the Fund (the "Institutional Class"). Effective March 10,
1998, the Trust has entered into an agreement with ACG Capital Corporation
("ACG") to provide distribution services to the Institutional Class pursuant to
a Distribution Agreement dated as of March 2, 1998 (the "ACG Institutional Class
Distribution Agreement") The ACG Institutional Class Distribution Agreement was
approved by Board of Trustees, including the unanimous vote of the Board of the
Fund's Trustees that are not parties to the agreement or "interested persons" of
the Fund, on March 10, 1998.
ACG also provides distribution services to the Fund with respect to the
Heitman/PRA Advisor Class of shares of the Fund (the "Advisor Class") pursuant
to a Distribution Agreement dated as of May 15, 1995 (the "ACG Advisor Class
Distribution Agreement") The ACG Advisor Class Distribution Agreement was last
approved by Board of Trustees, including the unanimous vote of the Board of the
Fund's Trustees that are not parties to the agreement or "interested persons" of
the Fund, on March 10, 1998. For the fiscal years ended December 31, 1997, 1996
and 1995, the Fund paid $190,631, $89,289 and $2,957, respectively, in
compensation to ACG pursuant to the ACG Advisor Class Distribution Agreement.
The Fund has also adopted a Shareholder Servicing Plan which is described in the
Advisor Class Prospectus. During the fiscal years ended December 31, 1997, 1996
and 1995, the Fund paid an aggregate of $190,631, $89,289 and $2,985,
respectively, to service organizations under contracts entered into pursuant to
the Shareholder Service Plan.
The following information is added to the section called "CUSTODIAN"
Wilmington Trust Company, Wilmington, Delaware served as custodian of the cash
and securities of the Fund until March 2, 1998. Effective March 2, 1998, the
Trust has entered into an agreement with The Chase Manhattan Bank, N.A.
("Chase") to provide custody services.
<PAGE>
The following information is added to the section called "EXECUTION OF PORTFOLIO
TRANSACTIONS"
During the fiscal years ended December 31, 1997, 1996, and 1995, aggregate
commissions paid by the Fund amounted to $480,427, $400,540 and $334,132,
respectively. During the fiscal year ended December 31, 1997, transactions of
the Fund aggregating $173,894,638 were allocated to brokers providing research,
statistical and other related services and $234,403 in brokerage commissions
were paid on these transactions.
The following information is added to the section called "PRINCIPAL
SHAREHOLDERS":
The following table shows, as of March 31, 1998, the following shareholders were
known to own of record more than 5% of the total outstanding shares of either
the Institutional Class or Advisor Class of the Fund, as the case may be:
<TABLE>
<CAPTION>
Percentage Ownership of Percentage Ownership of Percentage Ownership of
Name and Address Institutional Class Shares Advisor Class Shares All Fund Shares
- ---------------- -------------------------- -------------------- --------------------
<S> <C> <C> <C>
United Nations Joint Staff Pension Fund 29.7% -- 17.5
Charles Schwab & Company 15.3% 35.8% 24.1
HAWCO 9.2% -- 5.2%
Donaldson Lufkin & Jenrette Cash Account 5.6% -- --
</TABLE>
All Officers and Trustees of the Fund as a group owned less than 1% of the
Fund's outstanding shares as of March 31, 1998.
The following information is added to the section called "ADVERTISING AND
CALCULATION OF PERFORMANCE DATA"
The average annual total returns of the Institutional Class for the one year and
five year periods ended December 31, 1997 and for the life of the Fund were
21.12%, 18.02% and 11.37%, respectively, and the average annual total returns of
the Advisor Class for the one year period ended December 31, 1997 and for the
life of the Fund were 14.47% and 24.70%, respectively.
The following information is added to the section called "FINANCIAL STATEMENTS"
Price Waterhouse LLP currently serves as independent accountants for the Fund.
Arthur Andersen LLP served as independent public accountants for the Fund for
all periods prior to January 1, 1996. The financial statements in this
Statement of Additional Information and the Financial Highlights included in the
Prospectuses, each for the years ended December 31, 1997 and 1996, have been
incorporated by reference herein, in reliance on the report of Price Waterhouse
LLP, independent accountants, given the authority of said firm as experts in
auditing and accounting. The Financial Statements and Financial Highlights for
each of the fiscal periods prior to January 1, 1996 have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are included herein in reliance of said Firm as experts in
giving said report.
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Included in the Heitman/PRA Institutional Class Prospectus (Part A):
Financial Highlights for the Fiscal Years Ended December 31, 1997,
1996 and 1995, for the Three-Month Period Ended December 31, 1994,
Years Ended September 30, 1994, 1993, 1992, 1991 and 1990 and the
Period January 4, 1989 (Effective Date) to September 30, 1989
Included in the Advisor Class Prospectus (Part A):
Financial Highlights for the Fiscal Years Ended December 31, 1997 and
1996 and for the period May 15, 1995 (Commencement of Operations)
through December 31, 1995
The financial statements listed below are incorporated by reference into
the Registrant's Statement of Additional Information (Part B):
Report of Independent Public Accountants dated February 23, 1998
(Except as noted).
Audited Financial Statements of Heitman Real Estate Fund for the
Fiscal Year Ended December 31, 1997.
Included in Part C:
Consent of Independent Public Accountants
(b) Exhibits:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- -----------------------------------------------------------------
1(a) First Amended and Restated Master Trust Agreement dated February
28, 1995. (Incorporated by reference to Post-Effective Amendment
No. 9 to the Registration Statement on Form N-1A, filed March 16,
1995.)
1(b) Amendment No. 1 to First Amended and Restated Master Trust
Agreement dated March 3, 1995. (Incorporated by reference to Post-
Effective Amendment No. 9 to the Registration Statement filed
March 16, 1995.)
1(c) Amendment No. 2 to First Amended and Restated Master Trust
Agreement effective as of August 7, 1995. (Incorporated by
reference to Post-Effective Amendment No. 10 to the Registration
Statement filed April 29, 1996.)
<PAGE>
2 By-Laws. (Incorporated by reference to initial filing of
Registration Statement No. 33-24611.)
3 Not Applicable.
4(a) Specimen Certificate for Shares of Beneficial Interest of Heitman
Real Estate Fund - Heitman/PRA Institutional Class. (Incorporated
by reference to Post-Effective Amendment No. 9 to the Registration
Statement filed on March 16, 1995.)
5 Investment Management Agreement between the Registrant and PRA
Securities Advisors, Inc. ("Heitman/PRA Advisors") dated as of
January 31, 1995. (Incorporated by reference to Post-Effective
Amendment No. 9 to the Registration Statement filed on March 16,
1995.)
6(a) Distribution Agreement between the Registrant and ACG Capital
Corporation ("ACG") with respect to the Heitman/PRA Institutional
Class dated March 10, 1998.
6(b) Distribution Agreement between the Registrant and ACG with respect
to the Advisor Class dated May 15, 1995. (Incorporated by
reference to Post-Effective Amendment No. 10 to the Registration
Statement filed April 29, 1996.)
6(c) Form of Selected Broker Agreement with respect to the Advisor
Class. (Incorporated by reference to Post-Effective Amendment No.
10 to the Registration Statement filed April 29, 1996.)
6(d) Sub-Distributor Agreement by and between ACG and the Nomura
Securities, Co., Ltd. dated as of August 22, 1995. (Incorporated
by reference to Post-Effective Amendment No. 10 to the
Registration Statement filed April 29, 1996.)
7 Not Applicable.
8 Global Custody Agreement between the Registrant and The Chase
Manhattan Bank dated as of March 2, 1998.
9(a) Fund Administration Agreement between the Registrant and UAM Fund
Services, Inc. dated as of March 2, 1998.
9(b) Mutual Funds Service Agreement between the UAM Fund Services, Inc.
and Chase Global Fund Services Company dated as of March 2, 1998.
9(c) Agreement And Plan Of Reorganization dated as of January 6, 1998
between Registrant and UAM Funds Trust.
9(d) Amended Marketing Services Agreement by and between Heitman/PRA
Advisors dated as of March 11, 1996. (Incorporated by reference to
Post-Effective Amendment No. 10 to the Registration Statement
filed April 29, 1996.)
<PAGE>
10 Opinion of Counsel with respect to issuance of both Heitman/PRA
Institutional Class and Advisor Class shares. (Incorporated by
Reference to Post-Effective Amendment No. 9 to the Registration
Statement filed on March 16, 1995.)
11(a) Consent of Independent Accountants.
11(b) Consent of Independent Public Accountants.
12 Not Applicable.
13 Letter of Investment Intent. (Incorporated by reference to
Pre-Effective Amendment No. 2 to the Registration Statement.)
14 Not Applicable.
15(a) Plan of Distribution Pursuant to Rule 12b-1 with respect to the
Advisor Class. (Incorporated by reference to Post-Effective
Amendment No. 10 to the Registration Statement filed April 29,
1996.)
15(b) Shareholder Servicing Plan (Advisor Class Shares). (Incorporated
by reference to Post-Effective Amendment No. 10 to the
Registration Statement filed April 29, 1996.)
15(c) Shareholder Servicing Agreement (Advisor Class Shares).
15(d) Form of Shareholder Servicing Agreement for Omnibus Account
Arrangements (Advisor Class shares).
15(e) Form of Shareholder Servicing Agreement for Omnibus Account
Arrangements (Institutional Class shares). (Incorporated by
reference to Post-Effective Amendment No. 10 to the Registration
Statement filed April 29, 1996.)
15(f) Form of Operating Agreement by and between the Registrant, Charles
Schwab & Co., Inc. ("Schwab") dated as of August 30, 1995, as
amended by Retirement Plan Order Processing Amendment dated as of
March 25, 1996 by and among the Registrant, Schwab and the Charles
Schwab Trust Company. (Incorporated by reference to Post-Effective
Amendment No. 10 to the Registration Statement filed April 29,
1996.)
15(g) Institutional Services Agreement by and between the Registrant and
Schwab dated as of August 30, 1995. (Incorporated by reference to
Post-Effective Amendment No. 10 to the Registration Statement
filed April 29, 1996.)
16 Schedules of Performance Calculations.
17 Financial Data Schedules.
18 Multiple Class Expense Allocation Plan Adopted Pursuant to Rule
18f-3 dated of January 1, 1996. (Incorporated by reference to
<PAGE>
Post-Effective Amendment No. 10 to the Registration Statement
filed April 29, 1996.)
Powers of Attorney. (Incorporated by reference to Post-Effective
Amendment No. 11 to the Registration Statement filed April 28,
1997.)
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
Item 26. NUMBER OF HOLDERS OF SECURITIES
Set forth below are the number of record holders, as of March 31, 1998, of
each class of securities of the Registrant:
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
Heitman/PRA Institutional Class 559
Advisor Class 2,394
Item 27. INDEMNIFICATION
Under a provision of the Registrant's First Amended and Restated Master
Trust Agreement and Declaration of Trust (the "Declaration of Trust"), any past
or present trustee or officer of the Registrant is indemnified to the fullest
extent permitted by law against liability and all expenses reasonably incurred
by him/her in connection with any action, suit or proceeding to which he/she may
be a party or otherwise involved by reason of his being or having been a trustee
or officer of Registrant. This provision does not authorize indemnification
where it is determined, in the manner specified in the
<PAGE>
Declaration of Trust, that such trustee or officer has not acted in good faith
in the reasonable belief that his actions were in the best interest of
Registrant. Moreover, this provision does not authorize indemnification where
such trustee or officer is finally adjudged to have been liable to Registrant or
its shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of his duties.
Paragraph 8 of the Investment Management Agreement (the "Management
Agreement") between Registrant and Heitman/PRA Advisors (the "Advisor") provides
that the Advisor shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust or its shareholders in connection with the
performance of its duties under the Management Agreement in the absence of
willful misfeasance, bad faith or gross negligence or reckless disregard of his
duties. Paragraph 11 states that the obligations of the Trust under the
Management Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust personally,
but shall bind only the trust property of the Trust, as provided in the
Declaration of Trust.
Paragraph 10(a) of each Distribution Agreement between the Registrant,
on behalf of the Advisor and Institutional Classes and ACG Capital Corporation
("ACG") states that the Registrant agrees to indemnify and hold harmless ACG and
each of its directors and officers and each person, if any, who controls ACG
within the meaning of Section 15 of the 1933 Act against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees) arising out of or based upon: (i) any violation of the
Registrant's representations or covenants contained in the Distribution
Agreement; (ii) any allegation of any wrongful act of the Registrant or any of
its representatives (other than ACG or any of its employees or representatives
or any other person for whose acts ACG is responsible (including any selected
dealer or person through whom sales are made pursuant to an agreement with
ACG)); (iii) any allegation of any person acquiring any shares, based upon the
1933 Act or any other statute or common law, that the registration statements,
Prospectuses, SAIs, or shareholder reports of the Registrant included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading, to the
extent the statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Registrant by or on behalf of ACG;
or (iv) any allegation that any advertising material included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading, to the
extent that such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to ACG by the Registrant. In
no case is the indemnity of the Registrant in favor of ACG or any person
indemnified to be deemed to protect ACG or any person against any liability to
the Registrant or its security holders to which ACG or such person would
otherwise be subject by reason of willful misfeasance, bad faith or ordinary
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the Distribution Agreement.
Paragraph 10(b) of the Distribution Agreement provides that ACG agrees to
indemnify the Registrant in the same manner as described in Paragraph 10(a) of
the Distribution Agreement. Paragraph 16 of the Distribution Agreement is
similar to Paragraph 11 of the Management Agreement.
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The list required by this Item 28 of officers and directors of Heitman/PRA
Advisors, together with information as to any other business profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of FORM ADV filed by Heitman/PRA Advisors pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-48252).
Item 29. PRINCIPAL UNDERWRITER (HEITMAN/PRA INSTITUTIONAL CLASS)
(a) None.
<PAGE>
(b)
(1) (2) (3)
Name and Principal Principal Positions and Positions and Offices
Business Address Offices with Underwriter with Registrant
- --------------------------- -------------------------- ---------------------
Ronald D. Cordes President/CEO & Director None
1661 Tice Valley Blvd.
Suite 200
Walnut Creek CA 94595
Richard E. Steiny Secretary/Treasurer
1255 Post Street & Director None
Suite 700
San Francisco, CA 94109
Richard T. O'Toole Vice President & Director None
100 Galleria Parkway
Suite 1200
Atlanta, GA 30339
Brian R. O'Toole Vice President & Director None
100 Galleria Parkway
Suite 1200
Atlanta, GA 30339
(c) None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books, records and other documents of the Registrant relating to
portfolio transactions are maintained at:
The offices of the Registrant at 180 North LaSalle Street, Suite 3600, Chicago,
IL 60601
<PAGE>
The offices of Heitman/PRA Advisors, the Investment Manager, 180 North LaSalle
Street, Suite 3600, Chicago, IL 60601.
Certain custodial records are maintained at the offices of The Chase Manhattan
Bank, the Custodian, at 4 Chase MetroTech Center, Brooklyn, NY 11245
Certain accounts and records relating to administration, accounting and transfer
agent services are maintained by Chase Global Fund Services Company, at 73
Tremont Street, Boston, Massachusetts 02108.
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS
Registrant undertakes to call a meeting of shareholders for the purpose of
voting upon the question of removal of one or more Trustees when requested in
writing to do so by the holders of at least 10% of the Trust's outstanding
shares, and in connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to shareholder
communications.
Registrant hereby undertakes to furnish a copy of the Registrant's latest
Annual Report to Shareholders to each person to whom a copy of the registrant's
Prospectus is delivered, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Chicago, and State of Illinois on the 20th day of April, 1998.
HEITMAN SECURITIES TRUST
By: /S/ WILLIAM RAMSEYER
William L. Ramseyer, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Post
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ----------------------- ------------------------------- -------------
/s/ WILLIAM L. RAMSEYER Chairman (Principal Executive April 20, 1998
William L. Ramseyer Officer) and Trustee
/s/ DEAN A. SOTTER President, Chief Accounting Officer April 20, 1998
Dean A. Sotter and Treasurer (Principal Accounting
and Financial Officer)
/s/ ROBERT W. BEENEY Trustee April 20, 1998
Robert W. Beeney *
/s/ JOHN F. GOYDAS Trustee April 20, 1998
John F. Goydas *
/s/ MAURICE WIENER Trustee April 20, 1998
Maurice Wiener *
<PAGE>
* By: /S/ DEAN A. SOTTER
Dean A. Sotter
(Pursuant to Power of Attorney Incorporated by reference to Post-Effective
Amendment No. 11 to the Registration Statement filed April 28, 1997.)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ----------- -----------------------------------------------------------------
6(a) Distribution Agreement between the Registrant and ACG
8 Global Custody Agreement
9(a) Fund Administration Agreement
9(b) Mutual Funds Service Agreement
9(c) Agreement and Plan of Reorganization
11(a) Consent of Independent Accountants.
11(b) Consent of Independent Public accountants
16 Schedules of Performance Calculations.
17 Financial Data Schedules.
<PAGE>
Exhibit 6(a)
FORM OF
HEITMAN SECURITIES TRUST
DISTRIBUTION AGREEMENT
(INSTITUTIONAL CLASS SHARES)
THIS DISTRIBUTION AGREEMENT is made as of the 10th day of March, 1998
between Heitman Securities Trust, a Massachusetts business trust (the "Trust"),
having its principal place of business in Chicago, Illinois, and ACG Capital
Corporation, a corporation organized under the laws of the State of California
(the "Distributor"), having its principal place of business in Walnut Creek,
California.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and is
authorized (i) to issue shares of beneficial interest in separate series
("Series"), with the shares of each such series representing the interests in a
separate portfolio of securities and other assets, and (ii) to divide such
shares of beneficial interest of each such series into two or more classes;
WHEREAS, at the present time, the Trust has one Series, Heitman Real Estate
Fund (the "Fund"), which is authorized to issue two classes of shares designated
as "Heitman/PRA Institutional Class" shares and "Advisor Class" shares;
WHEREAS, the Distributor currently serves as Distributor with respect to
the Advisor Class shares of the Fund; and
WHEREAS, the Trust wishes to employ the services of Distributor with
respect to the Institutional Class shares of the Fund; and
WHEREAS, the Distributor wishes to provide distribution services to the
Trust with respect to the Institutional Class of shares of the Fund as set forth
below.
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. SALE OF SHARES. The Trust grants to the Distributor the right to sell
shares of beneficial interest, par value $0.001 per share, of the Heitman/PRA
Institutional Class of the Fund (the "Institutional Class Shares" or the
"Shares") during the term of this Agreement and subject to the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and of
the laws governing the sale of securities in various states (the "Blue Sky
Laws") under the following terms and conditions: the Distributor (i) shall have
the right to sell, as principal, the Institutional Class Shares authorized for
issue and registered under the 1933 Act and applicable Blue Sky Laws; and (ii)
shall sell such Shares only in compliance with the terms set forth in the
Trust's currently effective registration statement and any further limitations
the Trustees of the Trust may impose. Distributor may enter into selling
agreements with selected
<PAGE>
dealers and others for the sale of Institutional Class Shares and will act only
on its own behalf as principal in entering into such selling agreements.
2. SALE OF SHARES BY THE TRUST. The Trust reserves the right to issue
Shares in connection with (a) the merger or consolidation of the assets of, or
acquisition by the Trust through purchase or otherwise, with any other
investment company, trust or personal holding company; (b) a pro rata
distribution directly to the holders of Shares in the nature of a stock dividend
or split-up; and (c) as otherwise may be provided in the then current
registration statement of the Trust.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
Institutional Class Shares, Institutional Class Shares held in its treasury in
the event that in the discretion of the Trust treasury Shares of such class
shall be sold, and Institutional Class Shares repurchased for resale.
4. PUBLIC OFFERING PRICE. Except as otherwise noted in the Trust's
Prospectus (the "Prospectus") or Statement of Additional Information (the "SAI")
with respect to Institutional Class Shares, as amended or supplemented from time
to time, all Institutional Class Shares sold to investors by the Distributor or
the Trust will be sold at the public offering price. The public offering price
for all accepted subscriptions will be the net asset value per share, determined
in the manner described in the Trust's then current Prospectus or SAI with
respect to the applicable series. The Trust shall in all cases receive the net
asset value per share on all sales.
5. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be processed by the Distributor except such unconditional
orders placed with the Distributor before it had knowledge of the suspension.
In addition, the Trust reserves the right to suspend sales and the Distributor's
authority to sell Shares if, in the judgment of the Trust, it is in the best
interests of the Trust to do so. Suspension will continue for such period as
may be determined by the Trust. In addition, the Trust and Distributor reserve
the right to reject any purchase order.
6. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for Shares of the Trust. This
shall not prevent the Distributor from entering into like arrangements
(including arrangements involving the payment of underwriting commissions) with
other issuers. Distributor agrees to use all reasonable efforts to ensure that
taxpayer identification numbers provided for holders of Shares of the Trust are
correct.
7. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by the
Trust to give any information or to make any representations other than those
contained in the appropriate registration statements, Prospectuses or SAIs filed
with the Securities and Exchange Commission under the 1933 Act and applicable
Blue Sky Laws (as those registration
2
<PAGE>
statements, Prospectuses and SAIs may be amended from time to time), or
contained in shareholder reports or other material that may be prepared by or on
behalf of the Trust for the Distributor's use. This shall not be construed to
prevent the Distributor from preparing and distributing, in compliance with
applicable laws and regulations, sales literature or other material as it may
deem appropriate. Distributor will furnish or cause to be furnished copies of
such sales literature or other material to the President of the Trust or his
designee and will provide him with a reasonable opportunity to comment on it.
Distributor agrees to take appropriate action to cease using such sales
literature or other material to which the Trust reasonably objects as promptly
as practicable after receipt of the objection.
Distributor further agrees that in connection with the offer and sale of
Shares, Distributor shall comply with all applicable federal and state
securities laws (including, without limitation, the maintenance of effective
broker-dealer registrations as required) and shall comply with the requirements
of the Rules of Fair Practice of the National Association of Securities Dealers,
Inc.
8. REGISTRATION OF SHARES. The Trust agrees that it will use its best
efforts to register Shares under the 1933 Act (subject to the necessary
approval, if any, of is shareholders) and to qualify and maintain the
registration and qualification of an appropriate number of shares under the
securities laws of such states so that there will be available for sale the
number of Shares the Distributor may reasonably be expected to sell.
Distributor shall furnish such information and other materials relating to its
affairs and activities as shall be required by the Trust in connection with such
registration and qualification. The Trust agrees that it will notify
Distributor of each state where the Shares are qualified or registered for sale,
and the Distributor agrees that it will not offer or sell Shares in any state
where it has not been notified that the offer or sale of Shares has been so
qualified or registered. The Trust shall furnish to the Distributor copies of
all information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares of each
series of the Trust.
9. EXPENSES, COMPENSATION AND REIMBURSEMENT.
(a) The Trust shall pay all fees and expenses:
(i) in connection with the preparation, setting in type and filing of
any registration statement, Prospectus and SAI under the 1933 Act, and any
amendments thereto, for the issue of its Shares;
(ii) in connection with the registration and qualification of Shares
for sale in the various states in which the Board of Trustees (the "Trustees")
of the Trust shall determine it advisable to qualify such Shares for sale
(including registering the Trust or Series as a broker or dealer or any officer
of the Trust as agent or salesperson in any state);
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(iii) of preparing, setting in type, printing and mailing any report
or other communication to holders of Shares of the Trust in their capacity as
such; and
(iv) of preparing, setting in type, printing and mailing
Prospectuses, SAIS, and any supplements thereto, sent to existing holders of
Shares.
(b) The Distributor shall pay costs of:
(i) printing and distributing Prospectuses, SAIs and reports
prepared for its use in connection with the offering of the Shares for sale to
the public;
(ii) any other literature used in connection with such offering;
(iii) advertising in connection with such offering including, but not
limited to the following: public relations services, sales presentations, media
charges, preparation, printing and mailing of advertising and sales literature,
data processing necessary to distribution effort, printing and mailing of
prospectuses; and
(iv) any additional out-of-pocket expenses incurred in connection
with these costs.
(c) In addition to the services described above, Distributor will
provide services, including assistance in the production of marketing and
advertising materials for the sale of Shares of the Trust and their review for
compliance with applicable regulatory requirements, entering into other
agreements with broker-dealers to sell Shares of the Trust and monitoring their
financial strength and contractual compliance, providing, directly or through
its affiliates certain investor support services, personal service, and the
maintenance of shareholder accounts.
(d) The Distributor shall receive no compensation from the Trust for
services provided hereunder.
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10. INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless the Distributor
and each of its directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages, or
expense and reasonable counsel fees incurred in connection therewith) arising
out of or based upon: (i) any violation of the Trust's representations or
covenants herein contained; (ii) any allegation of any wrongful act of the Trust
or any of its representatives (other than the Distributor or any of its
employees or representatives or any other person for whose acts the Distributor
is responsible or is alleged to be responsible (including any selected dealer or
person through whom sales are made pursuant to an agreement with the
Distributor)); (iii) any allegation of any person acquiring any Shares, based
upon the 1933 Act or any other statute or common law, that the registration
statements, Prospectuses, SAIs, or shareholder reports of the Trust included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading, except
to the extent the statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Trust by or on behalf
of the Distributor; or (iv) any allegation that any advertising material
included an untrue statement of a material fact or omitted to state a material
fact required to be stated or necessary in order to make the statements not
misleading, to the extent that such statement or omission was made in reliance
upon, and in conformity with, information furnished in writing to the
Distributor by the Trust. In no case (i) is the indemnity of the Trust in favor
of the Distributor or any person indemnified to be deemed to protect the
Distributor or any person against any liability to the Trust or its security
holders to which the Distributor or such person would otherwise be subject by
reason of willful misfeasance, bad faith or ordinary negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this agreement, or (ii) is the Trust to be liable
under its indemnity agreement contained in this Section 10(a) with respect to
any claim made against the Distributor or any person indemnified unless the
Distributor or person, as the case may be, shall have notified the Trust in
writing of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon the Distributor or any such person or after the Distributor or
such person shall have received notice of service on any designated agent.
However, except to the extent the Trust is harmed thereby, failure to notify the
Trust of any claim shall not relieve the Trust from any liability which it may
have to the Distributor or any person against whom such action is brought other
than on account of its indemnity agreement contained in this Section 10(a). The
Trust shall 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 claims,
but if the Trust elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Distributor, or person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any suit and retain counsel, the Distributor, officers or directors
or controlling person(s) or defendant(s) in the suit, shall bear the fees and
expenses of any additional counsel retained by, them. If the Trust does not
elect to assume the defense of any suit, it will reimburse the Distributor,
officers or directors or controlling person(s) or defendant(s) in the suit, for
the reasonable fees and expenses of any counsel retained by them. The Trust
agrees to
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notify the Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or Trustees in connection with the
issuance or sale of any of the Shares.
(b) The Distributor agrees to indemnify and hold harmless the Trust
and each of its Trustees and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the 1933 Act, against any loss,
liability, damages, claim or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, damages, claim or
expense and reasonable counsel fees incurred in connection therewith) arising
out of or based upon: (i) any violation of any of its representations or
covenants herein contained; (ii) any allegation of any wrongful act of the
Distributor or any of its employees or representatives or any other person for
whose acts the Distributor is responsible or is alleged to be responsible
(including any selected dealer or person through whom sales are made pursuant to
an agreement with the Distributor); (iii) any allegation of any person acquiring
any Shares, based on the 1933 Act or any other statute or common law, that the
registration statements, Prospectuses, SAIs or shareholder reports included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading, to the
extent that such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Trust by or on behalf
of the Distributor; or (iv) any allegation that any advertising material
included an untrue statement of a material fact or omitted to state a material
fact required to be stated or necessary in order to make the statements not
misleading, except to the extent that such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Distributor by the Trust. In no case (i) is the indemnity of the Distributor in
favor of the Trust or any person indemnified to be deemed to protect the Trust
or any person against any liability to which the Trust or such person would
otherwise be subject by reason of 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, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this Section
10(b) with respect to any claim made against the Trust or any person indemnified
unless the Trust or person, as the case may be, shall have notified the
Distributor in writing of the claim within a reasonable time after the summons
or other first written notification giving information of the nature of the
claim shall have been served upon the Trust or any such person or after the
Trust or such person shall have received notice of service on any designated
agent. However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Trust or any
person against whom the action is brought other than on account of its indemnity
agreement contained in this Section 10(b). In the case of any notice to the
Distributor, it shall 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 claims, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to the
Trust, to its officers and Trustees and to any controlling person(s) or any
defendants(s) in the suit. In the event the Distributor elects to assume the
defense of any suit and retain counsel, the Trust or controlling person(s) or
defendant(s) in the suit shall bear the fees and expenses of any additional
counsel retained by them. If the Distributor does not elect to assume the
defense of any suit, it will reimburse the Trust, its officers or Trustees,
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controlling person(s) or defendant(s) in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify the
Trust promptly of the commencement of any litigation or proceedings against it
in connection with the issue and sale of any of the Shares.
(c) The indemnities granted by the parties in this Section 10 shall
survive the termination of this Agreement.
11. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become
effective as of the date first above written, and unless terminated as provided,
shall continue in force for two (2) years from the date of its execution and
thereafter from year to year, provided continuance is approved at least annually
by either (i) the vote of a majority of the Trustees of the Trust, or by the
vote of a majority of the outstanding voting securities of the Trust, and (ii)
the vote of a majority of those Trustees of the Trust who are not interested
persons of the Trust and who are not parties to this Agreement or interested
persons of any party, cast in person at a meeting called for the purpose of
voting on the approval. This Agreement shall automatically terminate in the
event of its assignment. As used in this Section 11, the terms "vote of a
majority of the outstanding voting securities," "assignment' and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules enacted thereunder as now in effect or as hereafter amended. In addition
to termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated without the payment of any penalty by
vote of a majority of the Trustees of the Trust who are not interested persons
of the Trust, or by vote of a majority of the outstanding voting securities of
the Trust, on not more than sixty (60) days' written notice by the Trust. This
Agreement may be terminated by the Distributor upon not less than sixty (60)
days' prior written notice to the Trust.
12. INSURANCE. The Distributor shall maintain insurance coverage in such
amounts and in such forms as the Trust reasonably determines against any and all
liabilities which may arise in connection with the performance of the
Distributor's duties hereunder. Upon request, the Distributor shall provide to
the Trust evidence of such coverage.
13. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail, postage
prepaid, to the other party to this Agreement at its principal place of
business.
14. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
15. GOVERNING LAW. To the extent that state law has not been preempted
by the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the Commonwealth
of Massachusetts.
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16. LIMITATION OF LIABILITY. The Distributor acknowledges that it has
received notice of and accepts the limitations of liability set forth in the
Trust's First Amended and Restated Master Trust Agreement dated as of February
28, 1995. The Distributor agrees that the Trust's obligations hereunder shall
be limited to the Trust, and that the Distributor shall have recourse solely
against the assets of the Fund and shall have no recourse against the assets of
any other series of the Trust or against any shareholder, Trustee, officer,
employee or agent of the Trust.
17. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
in two counterparts, each of which taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
HEITMAN SECURITIES TRUST
By:
_________________________
Name:
Title:
ACG CAPITAL CORPORATION
By:
_________________________
Name:
Title:
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Exhibit 8
[LOGO OF CHASE APPEARS HERE]
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective March 2, 1998, and is between THE CHASE
MANHATTAN BANK ("Bank") and Heitman Real Estate Portfolio ("Customer").
It is hereby agreed as follows:
1. Customer Accounts.
Bank shall establish and maintain the following accounts ("Accounts"):
(a) A custody account in the name of Customer ("Custody Account") for any
and all stocks, shares, bonds, debentures, notes, mortgages or other obligations
for the payment of money, bullion, coin and any certificates, receipts, warrants
or other instruments representing rights to receive, purchase or subscribe for
the same or evidencing or representing any other rights or interests therein and
other similar property whether certificated or uncertificated as may be received
by Bank or its Subcustodian (as defined in Section 3) for the account of
Customer ("Securities"); and
(b) A deposit account in the name of Customer ("Deposit Account") for any
and all cash in any currency received by Bank or its Subcustodian for the
account of Customer, which cash shall not be subject to withdrawal by draft or
check.
Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. Bank may deliver securities of the same
class in place of those deposited in the Custody Account.
Upon written agreement between Bank and Customer, additional Accounts may
be established and separately accounted for as additional Accounts hereunder.
2. Maintenance of Securities and Cash at Bank and Subcustodian Locations.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Securities shall be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash shall be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and Bank can comply with such Instructions,
Bank is authorized to maintain cash balances on deposit for Customer with itself
or one of its
<PAGE>
"Affiliates" at such reasonable rates of interest as may from time to time be
paid on such accounts, or in non-interest bearing accounts as Customer may
direct, if acceptable to Bank. For purposes hereof, the term "Affiliate" shall
mean an entity controlling, controlled by, or under common control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
3. Subcustodians and Securities Depositories.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of the
Securities in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
A. Upon request by Customer, Bank shall identify the name, address and principal
place of business of any Subcustodian of Customer's Assets and the name and
address of the governmental agency or other regulatory authority that supervises
or regulates such Subcustodian.
4. Use of Subcustodian.
(a) Bank shall identify the Assets on its books as belonging to Customer.
(b) A Subcustodian shall hold such Assets together with assets belonging to
other customers of Bank in accounts identified on such Subcustodian's books as
custody accounts for the exclusive benefit of customers of Bank.
(c) Any Assets in the Accounts held by a Subcustodian shall be subject only
to the instructions of Bank or its agent. Any Securities held in a securities
depository for the account of a Subcustodian shall be subject only to the
instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding Bank's
customers' assets shall provide that such assets shall not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets shall be freely transferable without the payment of
money or value other than for safe custody or administration. Where Securities
are deposited by a Subcustodian with a securities depository, Bank shall cause
the Subcustodian to identify on its books as belonging to Bank, as agent, the
Securities shown on the Subcustodian's account on the books of such securities
depository. The foregoing shall not apply to the extent of any special agreement
or arrangement made by Customer with any particular Subcustodian.
5. Deposit Account Transactions.
(a) Bank or its Subcustodians shall make payments from the Deposit Account
upon receipt of Instructions which include all information required by Bank.
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(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, Bank, in its discretion, may advance
Customer such excess amount which shall be deemed a loan payable on demand,
bearing interest at the rate customarily charged by Bank on similar loans.
(c) If Bank credits the Deposit Account on a payable date, or at any time
prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. Custody Account Transactions.
(a) Securities shall be transferred, exchanged or delivered by Bank or its
Subcustodian upon receipt by Bank of Instructions which include all information
required by Bank. Settlement and payment for Securities received for, and
delivery of Securities out of, the Custody Account may be made in accordance
with the customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivery of Securities to a purchaser,
dealer or their agents against a receipt with the expectation of receiving later
payment and free delivery. Delivery of Securities out of the Custody Account may
also be made in any manner specifically required by Instructions acceptable to
Bank.
(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions shall be
credited or debited to the Accounts on the date cash or Securities are actually
received by Bank and reconciled to the Account.
(i) Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, Bank may reverse the credits and debits
of the particular transaction at any time.
7. Actions of Bank.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that Bank or Subcustodian is
actually aware of such opportunities.
(b) Execute in the name of Customer such ownership and other certificates
as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
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(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of Customer. Bank
shall have no liability for any loss occasioned by delay in the actual receipt
of notice by Bank or by its Subcustodians of any payment, redemption or other
transaction regarding Securities in the Custody Account in respect of which Bank
has agreed to take any action hereunder.
8. Corporate Actions; Proxies; Tax Reclaims.
(a) Corporate Actions. Whenever Bank receives information concerning the
-----------------
Securities which requires discretionary action by the beneficial owner of the
Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), Bank
shall give Customer notice of such Corporate Actions to the extent that Bank's
central corporate actions department has actual knowledge of a Corporate Action
in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, Bank shall endeavor to obtain Instructions from
Customer or its Authorized Person (as defined in Section 10 hereof), but if
Instructions are not received in time for Bank to take timely action, or actual
notice of such Corporate Action was received too late to seek Instructions, Bank
is authorized to sell such rights entitlement or fractional interest and to
credit the Deposit Account with the proceeds or take any other action it deems,
in good faith, to be appropriate in which case it shall be held harmless for any
such action.
(b) Proxy Voting. Bank shall provide proxy voting services, if elected by
------------
Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Affiliates of
Bank).
(c) Tax Reclaims.
------------
(i) Subject to the provisions hereof, Bank shall apply for a
reduction of withholding tax and any refund of any tax paid or tax credits
which apply in each applicable market in respect of income payments on
Securities for the benefit of Customer which Bank believes may be available
to such Customer.
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(ii) The provision of tax reclaim services by Bank is conditional upon
Bank receiving from the beneficial owner of Securities (A) a declaration of
its identity and place of residence and (B) certain other documentation
(pro forma copies of which are available from Bank). Customer acknowledges
that, if Bank does not receive such declarations, documentation and
information, additional United Kingdom taxation shall be deducted from all
income received in respect of Securities issued outside the United Kingdom
and that U.S. non-resident alien tax or U.S. backup withholding tax shall
be deducted from U.S. source income. Customer shall provide to Bank such
documentation and information as it may require in connection with
taxation, and warrants that, when given, this information shall be true and
correct in every respect, not misleading in any way, and contain all
material information. Customer undertakes to notify Bank immediately if any
such information requires updating or amendment.
(iii) Bank shall not be liable to Customer or any third party for any
taxes, fines or penalties payable by Bank or Customer, and shall be
indemnified accordingly, whether these result from the inaccurate
completion of documents by Customer or any third party acting as agent for
Customer, or as a result of the provision to Bank or any third party of
inaccurate or misleading information or the withholding of material
information by Customer or any other third party, or as a result of any
delay of any revenue authority or any other matter beyond the control of
Bank.
(iv) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Deposit Account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to
Customer from time to time and Bank may, by notification in writing, at its
absolute discretion, supplement or amend the markets in which the tax
reclaim services are offered. Other than as expressly provided in this sub-
clause, Bank shall have no responsibility with regard to Customer's tax
position or status in any jurisdiction.
(vi) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to Customer or the Securities and/or Cash held for Customer.
(vii) Tax reclaim services may be provided by Bank or, in whole or in
part, by one or more third parties appointed by Bank (which may be
Affiliates of Bank); provided that Bank shall be liable for the performance
of any such third party to the same extent as Bank would have been if it
performed such services itself.
9. Nominees.
Securities which are ordinarily held in registered form may be registered
in a nominee name of Bank, Subcustodian or securities depository, as the case
may be. Bank may without notice to Customer cause any such Securities to cease
to be registered in the name of any such nominee and to be registered in the
name of Customer. In the event that any Securities registered in a nominee name
are called for partial redemption by the issuer, Bank may allot the called
portion to the respective beneficial holders of such class of security in any
manner Bank deems to be fair and equitable. Customer shall hold Bank,
Subcustodians, and their respective nominees harmless from any liability arising
directly or indirectly from their status as a mere record holder of Securities
in the Custody Account.
10. Authorized Persons.
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As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.
11. Instructions.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded.
Any Instructions delivered to Bank by telephone shall promptly thereafter
be confirmed in writing by an Authorized Person (which confirmation may bear the
facsimile signature of such Person), but Customer shall hold Bank harmless for
the failure of an Authorized Person to send such confirmation in writing, the
failure of such confirmation to conform to the telephone instructions received
or Bank's failure to produce such confirmation at any subsequent time. Bank may
electronically record any Instructions given by telephone, and any other
telephone discussions with respect to the Custody Account. Customer shall be
responsible for safeguarding any testkeys, identification codes or other
security devices which Bank shall make available to Customer or its Authorized
Persons.
12. Standard of Care; Liabilities.
(a) Bank shall be responsible for the performance of only such duties as
are set forth herein or expressly contained in Instructions which are consistent
with the provisions hereof as follows:
(i) Bank shall use reasonable care with respect to its obligations
hereunder and the safekeeping of Assets. Bank shall be liable to Customer
for any loss which shall occur as the result of the failure of a
Subcustodian to exercise reasonable care with respect to the safekeeping of
such Assets to the same extent that Bank would be liable to Customer if
Bank were holding such Assets in New York. In the event of any loss to
Customer by reason of the failure of Bank or its Subcustodian to utilize
reasonable care, Bank shall be liable to Customer only to the extent of
Customer's direct damages, to be determined based on the market value of
the property which is the subject of the loss at the date of discovery of
such loss and without reference to any special conditions or circumstances.
Bank shall have no liability whatsoever for any consequential, special,
indirect or speculative loss or damages (including, but not limited to,
lost profits) suffered by Customer in connection with the transactions
contemplated hereby and the relationship established hereby even if Bank
has been advised as to the possibility of the same and regardless of the
form of the action. Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank.
(ii) Bank shall not be responsible for any act, omission, default or
the solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith.
(iii) Bank shall be indemnified by, and without liability to Customer
for any action taken or omitted by Bank whether pursuant to Instructions or
otherwise within the scope hereof if such act or
6
<PAGE>
omission was in good faith, without negligence. In performing its
obligations hereunder, Bank may rely on the genuineness of any document
which it believes in good faith to have been validly executed.
(iv) Customer shall pay for and hold Bank harmless from any liability
or loss resulting from the imposition or assessment of any taxes or other
governmental charges, and any related expenses with respect to income from
or Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.
(vi) Bank need not maintain any insurance for the benefit of
Customer.
(vii) Without limiting the foregoing, Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from malfunction, interruption of or error in the
transmission of information caused by any machines or system or
interruption of communication facilities, abnormal operating conditions,
nationalization, expropriation or other governmental actions; regulation of
the banking or securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly execution of
securities transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war (whether declared or undeclared) or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of
God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Securities;
(iii) advise Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant hereto; and
(v) review or reconcile trade confirmations received from brokers.
Customer or its Authorized Persons issuing Instructions shall bear any
responsibility to review such confirmations against Instructions issued to
and statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that Bank or
any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Securities, act as a lender to the issuer of
7
<PAGE>
Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. Fees and Expenses.
Customer shall pay Bank for its services hereunder the fees set forth in
Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Bank shall have a lien on and is authorized to
charge any Accounts of Customer for any amount owing to Bank under any provision
hereof
14. Miscellaneous.
(a) Foreign Exchange Transactions. To facilitate the administration of
------------------------------
Customer's trading and investment activity, Bank is authorized to enter into
spot or forward foreign exchange contracts with Customer or an Authorized Person
for Customer and may also provide foreign exchange through its subsidiaries,
Affiliates or Subcustodians. Instructions, including standing instructions, may
be issued with respect to such contracts but Bank may establish rules or
limitations concerning any foreign exchange facility made available. In all
cases where Bank, its subsidiaries, Affiliates or Subcustodians enter into a
foreign exchange contract related to Accounts, the terms and conditions of the
then current foreign exchange contract of Bank, its subsidiary, Affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
(b) Certification of Residency, etc. Customer certifies that it is a
--------------------------------
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(c) Access to Records. Bank shall allow Customer's independent public
------------------
accountant reasonable access to the records of Bank relating to the Assets as is
required in connection with their examination of books and records pertaining to
Customer's affairs. Subject to restrictions under applicable law, Bank shall
also obtain an undertaking to permit Customer's independent public accountants
reasonable access to the records of any Subcustodian which has physical
possession of any Assets as may be required in connection with the examination
of Customer's books and records.
(d) Governing Law; Successors and Assigns, Captions THIS AGREEMENT SHALL
-----------------------------------------------
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN NEW YORK and shall not be assignable by either party, but
shall bind the successors in interest of Customer and Bank. The captions given
to the sections and subsections of this Agreement are for convenience of
reference only and are not to be used to interpret this Agreement.
(e) Entire Agreement; Applicable Riders. Customer represents that the
------------------------------------
Assets deposited in the Accounts are (Check one):
____ Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
X Investment Company assets subject to certain U.S. Securities and
----
Exchange Commission rules and regulations;
____ Neither of the above.
8
<PAGE>
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
X ERISA
----
X INVESTMENT COMPANY
----
X PROXY VOTING
----
X SPECIAL TERMS AND CONDITIONS
----
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions hereof are held
-------------
invalid, illegal or unenforceable in any respect on the basis of any particular
circumstances or in any jurisdiction, the validity, legality and enforceability
of such provision or provisions under other circumstances or in other
jurisdictions and of the remaining provisions shall not in any way be affected
or impaired.
(g) Waiver. Except as otherwise provided herein, no failure or delay on
-------
the part of either party in exercising any power or right hereunder operates as
a waiver, nor does any single or partial exercise of any power or right preclude
any other or further exercise, or the exercise of any other power or right. No
waiver by a party of any provision hereof, or waiver of any breach or default,
is effective unless in writing and signed by the party against whom the waiver
is to be enforced.
(h) Representations and Warranties. (i) Customer hereby represents and
------------------------------
warrants to Bank that: (A) it has full authority and power to deposit and
control the Securities and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; (D) it shall have full authority and power to borrow moneys and enter
into foreign exchange transactions; and (E) it has not relied on any oral or
written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer that: (A) it has the
full power and authority to perform its obligations hereunder, (B) this
Agreement constitutes its legal, valid and binding obligation; enforceable in
accordance with its terms; and (C) that it has taken all necessary action to
authorize the execution and delivery hereof.
(i) Notices. All notices hereunder shall be effective when actually
--------
received. Any notices or other communications which may be required hereunder
are to be sent to the parties at the following addresses or such other addresses
as may subsequently be given to the other party in writing: (a) Bank: The Chase
Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245, Attention:
Global Investor Services, Investment Management Group; and (b)
Customer:______________________________________________________________,
_______________________________________________________________,
______________________________________________________________
(j) Termination. This Agreement may be terminated by Customer or Bank by
------------
giving sixty (60) days written notice to the other, provided that such notice to
Bank shall specify the names of the persons to whom Bank shall deliver the
Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under
9
<PAGE>
Section 13. If within sixty (60) days following receipt of a notice of
termination by Bank, Bank does not receive Instructions from Customer specifying
the names of the persons to whom Bank shall deliver the Assets, Bank, at its
election, may deliver the Assets to a bank or trust company doing business in
the State of New York to be held and disposed of pursuant to the provisions
hereof, or to Authorized Persons, or may continue to hold the Assets until
Instructions are provided to Bank.
(k) Money Laundering. Customer warrants and undertakes to Bank for itself
----------------
and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.
(l) Imputation of certain information. Bank shall not be held responsible
---------------------------------
for and shall not be required to have regard to information held by any person
by imputation or information of which Bank is not aware by virtue of a "Chinese
Wall" arrangement. If Bank becomes aware of confidential information which in
good faith it feels inhibits it from effecting a transaction hereunder Bank may
refrain from effecting it.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first-above written.
CUSTOMER
By:
-------------------------------------
Title:
Date:
THE CHASE MANHATTAN BANK
By:
-------------------------------------
Title:
Date:
10
<PAGE>
DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
Domestic Corporate Actions and Proxies
- --------------------------------------
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions shall apply rather than the provisions of Section
8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody Account,
such proxies (signed in blank, if issued in the name of Bank's nominee or
the nominee of a central depository) and communications with respect to
Securities in the Custody Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received
by Bank for forwarding to its customers. In addition, Bank shall follow
coupon payments, redemptions, exchanges or similar matters with respect to
Securities in the Custody Account and advise Customer or the Authorized
Person for such Account of rights issued, tender offers or any other
discretionary rights with respect to such Securities, in each case, of
which Bank has received notice from the issuer of the Securities, or as to
which notice is published in publications routinely utilized by Bank for
this purpose.
Fees
- ----
The fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets
in the Accounts.
11
<PAGE>
Investment Company Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
Heitman Real Estate Portfolio
effective March 2, 1998
Customer represents that the Assets being placed in Bank's custody are
subject to the Investment Company Act of 1940, as amended (the "1940 Act"), as
the same may be amended from time to time.
Except to the extent that Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the Securities and Exchange Commission ("SEC") or the Exemptive
Order applicable to accounts of this nature issued to Bank (1940 Act, Release
No. 12053, November 20, 1981), as amended, or unless Bank has otherwise
specifically agreed, Customer shall be solely responsible to assure that the
maintenance of Assets hereunder complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
SEC.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
-----------------------------------------
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used herein shall
mean a branch of a qualified U.S. bank, an eligible foreign custodian or an
eligible foreign securities depository, which are further defined as
follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the 1940 Act;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company, incorporated or organized under the laws of a country other
than the United States, that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in excess
of $200 million in U.S. currency (or a foreign currency equivalent thereof)
as of the close of its fiscal year most recently completed prior to the
date hereof, (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and that
has shareholders' equity in excess of $100 million in U.S. currency (or a
foreign currency equivalent thereof) as of the close of its fiscal year
most recently completed prior to the date hereof, (iii) a banking
institution or trust company incorporated or organized under the laws of a
country other than the United States or a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other than the United
States which has such other qualifications as shall be specified in
Instructions and approved by Bank; or (iv) any other entity that shall have
been so qualified by exemptive order, rule or other appropriate action of
the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which operates (i)
12
<PAGE>
the central system for handling securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling of
securities or equivalent book-entries.
Customer represents that its Board of Directors has approved each of the
Subcustodians listed in Schedule A hereto and the terms of the subcustody
agreements between Bank and each Subcustodian, which are attached as Exhibits I
through ____ of Schedule A, and further represents that its Board has determined
that the use of each Subcustodian and the terms of each subcustody agreement are
consistent with the best interests of the Fund(s) and its (their) shareholders.
Bank shall supply Customer with any amendment to Schedule A for approval.
Customer has supplied or shall supply Bank with certified copies of its Board of
Directors resolution(s) with respect to the foregoing prior to placing Assets
with any Subcustodian so approved.
Section 11. Instructions.
-------------
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 hereof may be made only for the purposes listed below.
Instructions must specify the purpose for which any transaction is to be
made and Customer shall be solely responsible to assure that Instructions
are in accord with any limitations or restrictions applicable to Customer
by law or as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or other
securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by Customer requiring a pledge of
Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to Customer;
(i) For the purpose of redeeming shares of the capital stock of Customer
and the delivery to, or the crediting to the account of, Bank, its
Subcustodian or Customer's transfer agent, such shares to be purchased or
redeemed;
(j) For the purpose of redeeming in kind shares of Customer against
delivery to Bank, its Subcustodian or Customer's transfer agent of such
shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among
Customer, Bank and a broker-dealer registered under the Securities Exchange
Act of 1934 and a member of The National
13
<PAGE>
Association of Securities Dealers, Inc., relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to Bank of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or
at expiration, Bank shall receive from brokers the Securities previously
deposited. Bank shall act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and shall have no
responsibility or liability for any such Securities which are not returned
promptly when due other than to make proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions issued by
an officer of Customer which shall include a statement of the purpose for
which the delivery or payment is to be made, the amount of the payment or
specific Securities to be delivered, the name of the person or persons to
whom delivery or payment is to be made, and a certification that the
purpose is a proper purpose under the instruments governing Customer; and
(o) Upon the termination hereof as set forth in Section 14(j).
Section 12. Standard of Care; Liabilities.
-----------------------------
Add the following at the end of Section as 12:
(d) Bank hereby warrants to Customer that in its opinion, after due
inquiry, the established procedures to be followed by each of its branches,
each branch of a qualified U.S. Bank, each eligible foreign custodian and
each eligible foreign securities depository holding Customer's Securities
pursuant hereto afford protection for such Securities at least equal to
that afforded by Bank's established procedures with respect to similar
securities held by Bank and its securities depositories in New York.
Section 14. Access to Records.
-----------------
Add the following language to the end of Section 14(c):
------------------------------------------------------
Upon reasonable request from Customer, Bank shall furnish Customer such
reports (or portions thereof) of Bank's system of internal accounting
controls applicable to Bank's duties hereunder. Bank shall endeavor to
obtain and furnish Customer with such similar reports as it may reasonably
request with respect to each Subcustodian and securities depository holding
Assets.
14
<PAGE>
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
Heitman Real Estate Portfolio
dated March 2,1998.
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures") furnished
to Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and
form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank
to Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by Bank or provided to
Bank by its Subcustodians or third parties, and (b) voting by Bank of
proxies based on Customer directions. Original proxy materials or copies
thereof shall not be provided. Notifications shall generally be in English
and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to Bank or its
Subcustodian. In this respect Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. Bank reserves the
right to provide Notifications, or parts thereof, in the language received.
Upon reasonable advance request by Customer, backup information relative to
Notifications, such as annual reports, explanatory material concerning
resolutions, management recommendations or other material relevant to the
exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications
where Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Securities are: (i) on
loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of Bank or its Subcustodian or are otherwise held in
a manner which precludes voting; (v) not capable of being voted on account
of local market regulations or practices or restrictions by the issuer; or
(vi) held in a margin or collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis
(e.g., a net yes or no vote given the voting instructions received from all
customers).
<PAGE>
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in
no event sell, license, give or otherwise make the information provided
hereunder available, to any third party, and shall not directly or
indirectly compete with Bank or diminish the market for Proxy Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with (S)10 of the Agreement. Proxy Services fees shall
be as set forth in (S)13 of the Agreement or as separately agreed.
<PAGE>
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
GLOBAL CUSTODY AGREEMENT
WITH Heitman Real Estate Portfolio
DATE March 2, 1998
<PAGE>
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
Domestic Corporate Actions and Proxies
- --------------------------------------
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions shall apply rather than the pertinent provisions
of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody Account,
such proxies (signed in blank, if issued in the name of Bank's nominee or
the nominee of a central depository) and communications with respect to
Securities in the Custody Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received
by Bank for forwarding to its customers. In addition, Bank shall follow
coupon payments, redemptions, exchanges or similar matters with respect to
Securities in the Custody Account and advise Customer or the Authorized
Person for such Account of rights issued, tender offers or any other
discretionary rights with respect to such Securities, in each case, of
which Bank has received notice from the issuer of the Securities, or as to
which notice is published in publications routinely utilized by Bank for
this purpose.
<PAGE>
Exhibit 9(a)
FUND ADMINISTRATION AGREEMENT
AGREEMENT made as of March 2, 1998 by and between Heitman Securities Trust,
a business trust organized under the laws of the Commonwealth of Massachusetts
(the "Fund"), and UAM Fund Services, Inc., a Delaware corporation (the
"Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain the Administrator to provide certain
transfer agent, fund accounting and administration services with respect to the
Fund, and the Administrator is willing to furnish or provide for the furnishing
of such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Administrator to provide
-----------
transfer agent, fund accounting and fund administration services to the Fund,
subject to the supervision of the Board of Directors of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Paragraph 4 of this Agreement. The
Fund presently issues shares of beneficial interest in one or more series each
representing separate interests in a portfolio of investments and cash.
Hereinafter, each such series shall be referred to as a "Portfolio." The term
"Portfolio" as hereinafter used shall be deemed to include not only separate
series of the Fund, but also separate classes of series of the Fund. The Fund
shall notify the Administrator in writing of each additional Portfolio
established by the Fund. Each new Portfolio shall be subject to the provisions
of this Agreement, except to the extent that said provisions (including those
relating to the compensation and expenses payable by the Fund and its
Portfolios) may be modified with respect to such new Portfolio in writing by the
Fund and the Administrator at the time of the addition of such new Portfolio.
2. Delivery of Documents. The Fund will upon request furnish the
---------------------
Administrator with copies, properly certified or authenticated, of each of the
following in their most current form:
(a) Resolutions of the Fund's Board authorizing the appointment of the
Administrator to provide certain transfer agency, fund accounting and
administration services to the Fund and approving this Agreement;
1
<PAGE>
(b) The Fund's First Amended and Restated Master Trust Agreement dated
January 28, 1995, as amended (the "Declaration of Trust");
(c) The Fund's Bylaws ("Bylaws");
(d) The Fund's Notification of Registration of Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's Registration Statement, as amended, on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and the 1940 Act, as
filed with the SEC; and
(f) The Fund's most recent Prospectuses and Statements of Additional
Information and supplements thereto (such Prospectuses and Statements of
Additional Information and supplements thereto, as presently in effect and as
from time to time hereafter amended and supplemented, herein called the
"Prospectuses").
The Fund will furnish the Administrator from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Services Provided by the Administrator. The Administrator will provide
--------------------------------------
the following services subject to the control, direction and supervision of the
Board, and in compliance with the objectives, policies and limitations set forth
in the Fund's Registration Statement, Bylaws and applicable laws and
regulations.
(a) General Administration. Unless otherwise provided by the adviser
----------------------
to the Fund, the Administrator shall manage, administer and conduct the general
business activities of the Fund other than those which have been contracted to
other third parties by the Fund as of the date hereof. The Administrator shall
provide the personnel and facilities necessary to perform such general business
activities. A detailed description of these services is included in Attachment
A to this Agreement.
(b) Fund Accounting. The Administrator shall provide the following
---------------
accounting services to the Fund: (i) maintenance of the books and records and
accounting controls for the Fund's assets, including records of all securities
transactions; (ii) calculation of the Portfolios' net asset values in accordance
with the Prospectuses and, if requested by the Fund, transmission of the net
asset values to the NASD for publication of prices; (iii) accounting for
dividends, interest and other income received and distributions made by the
Fund; (iv) preparation and filing of the Fund's state and federal tax returns
and Semi-Annual Reports on Form N-SAR; (v) production of transaction data,
financial reports and such other periodic and special reports as the Board may
reasonably request; (vi) the preparation of financial statements for the semi-
annual and annual reports and other shareholder communications; (vii) liaison
with the Fund's independent auditors; and (viii) monitoring and administration
of arrangements with the Fund's
2
<PAGE>
custodian and depository banks. A complete listing of reports that will be
available to the Fund is included in Attachment B of this Agreement.
(c) Transfer Agent. The Administrator shall:
--------------
(i) Maintain records showing for each Fund shareholder the
following: (A) name, address and tax identifying number; (B) number of shares
held of any Portfolio of the Fund; (C) historical information including
dividends paid and the date and price of all transactions including individual
purchases and redemptions; and (D) any dividend reinvestment order, application,
dividend address and correspondence relating to the current maintenance of the
account.
(ii) Record the issuance of shares of beneficial interest of the
Fund and notify the Fund in case any proposed issue of shares by the Fund shall
result in an over-issue as identified by Section 8-104(2) of the Uniform
Commercial Code and in case any issue would result in such an over-issue, shall
refuse to countersign and issue, and/or credit, said shares. Except as
specifically agreed in writing between the Administrator and the Fund, the
Administrator shall have no obligation when countersigning and issuing and/or
crediting shares, to take cognizance of any other laws relating to the issue and
sale of such shares except insofar as policies and procedures of the Stock
Transfer Association recognize such laws.
(iii) Process all orders for the purchase of shares of the Fund in
accordance with the Fund's current Registration Statement. Upon receipt of any
check or other payment for purchase of shares of the Fund from an investor, it
will: (A) stamp the envelope with the date of receipt; (B) forthwith process the
same for collection; and (C) determine the amounts thereof due the Fund, and
notify the Fund of such determination and deposit, such notification to be given
on a daily basis of the total amounts determined and deposited to the Fund's
custodian bank account during such day. The Administrator shall then credit the
share account of the investor with the number of shares to be purchased
according to the price of the Fund's shares in effect for purchases made on the
date such payment is received by the Administrator, determined as set forth in
the Fund's current Prospectuses, and shall promptly mail a confirmation of said
purchase to the investor, all subject to any instructions which the Fund may
give to the Administrator with respect to the timing or manner of acceptance of
orders for shares relating to payments so received by it.
(iv) Receive and stamp with the date of receipt all requests for
redemptions or repurchase of shares held in certificate or non-certificate form
and shall process redemptions and repurchase requests as follows: (A) if such
certificate or redemption request complies with the applicable standards
approved by the Fund, the Administrator shall on each business day notify the
Fund of the total number of shares presented and covered by such requests
received by the Administrator on such day; (B) on or prior to the seventh
calendar day succeeding any such request for redemption, the Administrator shall
notify the custodian, subject to the instructions from the Fund, to
3
<PAGE>
transfer monies to such account as designated by the Administrator for such
payment to the redeeming shareholder of the applicable redemption or repurchase
price; (C) if any such certificate or request for redemption or repurchase does
not comply with applicable standards, the Administrator shall promptly notify
the investor of such fact, together with the reason therefor, and shall effect
such redemption at the relevant Portfolio's price next determined after receipt
of documents complying with said standards or at such other time as the Fund
shall so direct.
(v) Acknowledge all correspondence from shareholders relating to
their share accounts and undertake such other shareholder correspondence as may
from time to time be mutually agreed upon.
(vi) Process redemptions, exchanges and transfers of Fund shares
upon telephone instructions from qualified shareholders in accordance with the
procedures set forth in the Fund's current Prospectuses. The Administrator shall
be permitted to act upon the instruction of any person by telephone to redeem,
exchange and/or transfer Fund shares from any account for which such services
have been authorized. The Fund hereby agrees to indemnify and hold the
Administrator harmless against all losses, costs or expenses, including
attorneys' fees and expenses suffered or incurred by the Administrator directly
or indirectly as a result of relying on the telephone instructions of any person
acting on behalf of a shareholder account for which telephone services have been
authorized.
(vii) Transfer on the records of the Fund maintained by it, shares
represented by certificates, as well as issued shares held in non-certificate
form, upon the surrender to it of the certificate or, in the case of non-
certificated shares, comparable transfer documents in proper form for transfer
and, upon cancellation thereof, to countersign and issue new certificates or
other documents of ownership for a like amount of stock and to deliver the same
pursuant to the transfer instructions.
(viii) Supply, at the expense of the Fund, a supply of continuous
form blank stock certificates. Such blank stock certificates shall be properly
signed, manually or by facsimile, as authorized by the Fund, and shall bear the
Fund's corporate seal or facsimile thereof; and notwithstanding the death,
resignation or removal of any officers of the Fund authorized to sign
certificates of stock, the Administrator may, until otherwise directed by the
Fund, continue to countersign certificates which bear the manual or facsimile
signature of such officer.
(ix) Upon the request of a shareholder of the Fund who requests a
certificate representing his shares, countersign and mail by first class mail a
share certificate to the investor at his address as set forth on the transfer
books of the Fund.
(x) In the event that any check or other order for the payment
of money is returned unpaid for any reason, take such steps, including
redepositing said check for collection or returning said check to the investor,
as the Administrator may, at
4
<PAGE>
its discretion, deem appropriate and notify the Fund of such action, unless the
Fund instructs otherwise. However, the Administrator shall not be liable to the
Fund for any returned checks or other order for the payment of money if it
follows reasonable procedures with respect thereto.
(xi) Prepare, file with the Internal Revenue Service, and mail to
shareholders such returns for reporting payment of dividends and distributions
as are required by applicable laws to be so filed and/or mailed, and the
Administrator shall withhold such sums as are required to be withheld under
applicable Federal income tax laws, rules and regulations.
(xii) Mail proxy statements, proxy cards and other materials and
receive, examine and tabulate returned proxies. The Administrator shall make
interim reports of the status of such tabulation to the Fund upon request, and
shall certify the final results of the tabulation.
(d) Dividend Disbursing. The Administrator shall act as Dividend
-------------------
Disbursing Agent for the Fund, and, as such, shall prepare and mail checks or
credit income and capital gain payments to shareholders. The Fund shall advise
the Administrator of the declaration of any dividend or distribution and the
record and payable date thereof at least five (5) days prior to the record date.
The Administrator shall, on or before the payment date of any such dividend or
distribution, notify the Fund's custodian of the estimated amount required to
pay any portion of said dividend or distribution which is payable in cash, and
on or before the payment date of such distribution, the Fund shall instruct its
custodian to make available to the Administrator sufficient funds for the cash
amount to be paid out. If a shareholder is entitled to receive additional
shares by virtue of any such distribution or dividend, appropriate credits will
be made to his account and/or certificates delivered where requested. A
shareholder not electing issuance of certificates will receive a confirmation
from the Administrator indicating the number of shares credited to his account.
(e) Miscellaneous. Unless otherwise provided by the adviser to the
-------------
fund, the Administrator will also:
(i) Provide office facilities (which may be in the offices of
the Administrator or a corporate affiliate of them, but shall be in such
location as the Fund shall reasonably approve) and the services of a principal
financial officer to be appointed by the Fund;
(ii) Furnish statistical and research data, clerical services and
stationery and office supplies;
(iii) Assist in the monitoring of regulatory and legislative
developments which may affect the Fund and, in response to such developments,
counsel
5
<PAGE>
and assist the Fund in routine regulatory examinations or investigations of the
Fund, and work with outside counsel to the Fund in connection with regulatory
matters or litigation.
(iv) In performing its duties: (A) will act in accordance with
the Fund's Declaration of Trust, Bylaws, Prospectuses and the instructions and
directions of the Board and will conform to, and comply with, except as
otherwise provided herein, the requirements of the 1940 Act and all other
applicable federal or state laws and regulations; and (B) will consult with
outside legal counsel to the Fund, as necessary or appropriate.
(v) Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under said Act in
connection with the services required to be performed hereunder. The
Administrator further agrees that all such records which it maintains for the
Fund are the property of the Fund and further agrees to surrender promptly to
the Fund any of such records upon the Fund's request. Upon such request, the
Administrator will surrender such records in a mutually agreeable, electronic
format.
(vi) Upon request, provide a copy of all historical data related
to the Fund in a mutually agreeable electronic format.
(f) The Administrator may, at its expense and discretion, subcontract
with any entity or person concerning the provisions of the services contemplated
hereunder. The Administrator will provide prompt notice of such delegation and
provide copies of such subcontracts to the Fund if so requested by the Fund;
provided, that such subcontract shall not discharge the Administrator from its
obligations hereunder or delegation of duties to another third party.
4. Fees; Expenses; Expense Reimbursement.
-------------------------------------
(a) For the services rendered for the Fund pursuant to this Agreement,
the Administrator shall be entitled to an annual fee as outlined in Attachment
C. Such fees are to be computed daily and paid monthly on the first business day
of the following month. Upon any termination of this Agreement before the end of
any month, the fee for such part of the month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
(b) The Administrator will from time to time employ or associate with
such person or persons as may be fit to assist them in the performance of this
Agreement. Such person or persons may be officers and employees who are employed
by both the Administrator and the Fund. The compensation of such person or
persons for such employment shall be paid by the Administrator and no obligation
will be incurred by or on behalf of the Fund in such respect.
6
<PAGE>
(c) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise expressly
provided herein. Other expenses to be incurred in the operation of the Fund
will be borne by the Fund or other parties, including taxes, interest, brokerage
fees and commissions, if any, salaries and fees of officers and members of the
Board who are not officers, directors, shareholders or employees of the
Administrator, or the Fund's investment adviser or distributor, SEC fees and
state Blue Sky fees, EDGAR filing fees, processing services and related fees,
advisory and administration fees, charges and expenses of pricing and data
services, independent public accountants and custodians, insurance premiums
including fidelity bond premiums, legal expenses, costs of maintenance of
corporate existence, typesetting and printing of prospectuses for regulatory
purposes and for distribution to current shareholders of the Fund, printing and
production costs of shareholders' reports and corporate meetings, cost and
expenses of Fund stationery and forms; costs of special telephone and data lines
and devices; trade association dues and expenses; and any extraordinary expenses
and other customary Fund expenses; provided, however, that, except as provided
in any distribution plan adopted by the Fund, the Fund will not bear, directly
or indirectly, the cost of any activity which is primarily intended to result in
the distribution of shares of the Fund. In addition, the Administrator may
utilize one or more independent pricing services, approved from time to time by
the Board, to obtain securities prices in connection with determining the net
asset values of the Fund, and the Fund will reimburse the Administrator for its
share of the cost of such services based upon its actual use of the services for
the benefit of the Fund.
5. Proprietary and Confidential Information. The Administrator agrees on
----------------------------------------
behalf of itself and its employees to treat confidentially and as proprietary,
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and not to use such records and
information for any purpose other than performance of their responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Administrator may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund. Waivers of
confidentiality are automatically effective without further action by the
Administrator with respect to Internal Revenue levies, subpoenas and similar
actions, or with respect to any request by the Fund.
6. Duties, Responsibilities and Limitation of Liability.
----------------------------------------------------
(a) In the performance of its duties hereunder, the Administrator shall
be obligated to exercise due care and diligence and to act in good faith in
performing the services provided for under this Agreement. In performing its
services hereunder, the Administrator shall be entitled to rely on any oral or
written instructions, notices or other communications from the Fund and its
custodians, officers and directors, investors, agents, legal counsel and other
service providers which communications the Administrator reasonably believes to
be genuine, valid and authorized.
7
<PAGE>
(b) Subject to the foregoing, the Administrator shall not be liable for
any error of judgment or mistake of law or for any loss or expense suffered by
the Fund, in connection with the matters to which this Agreement relates, except
for a loss or expense resulting from willful misfeasance, bad faith or gross
negligence on the Administrator's part in the performance of its duties or from
reckless disregard by the Administrator of its obligations and duties under this
Agreement. Any person, even though also an officer, director, partner, employee
or agent of the Administrator, who may be or become an officer, director,
partner, employee or agent of the Fund, shall be deemed when rendering services
to the Fund or acting on any business of the Fund (other than services or
business in connection with the Administrator's duties hereunder) to be
rendering such services to or acting solely for the Fund and not as an officer,
director, partner, employee or agent or person under the control or direction of
the Administrator even though paid by the Administrator. In no event shall the
Administrator be liable to the Fund or any other party for special or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits) even if the Administrator has been advised of such loss or
damage and regardless of the form of action.
(c) The Administrator shall not be responsible for, and the Fund shall
indemnify and hold the Administrator harmless from and against, any and all
losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities, except for a loss or expense resulting from willful
misfeasance, bad faith or gross negligence on the Administrator's part in the
performance of its duties or from reckless disregard by the Administrator of its
obligations and duties under this Agreement, arising out of or attributable to:
(i) All actions of the Administrator or its officers, employers
or agents required to be taken pursuant to this Agreement;
(ii) The reliance on or use by the Administrator or its officers,
employers or agents of information, records, or documents which are received by
the Administrator or its officers, employers or agents and furnished to it or
them by or on behalf of the Fund, and which have been prepared or maintained by
the Fund or its officers, employees or agents;
(iii) The Fund's refusal or failure to comply with the terms of
this Agreement or the Fund's lack of good faith, or its actions, or lack
thereof, involving gross negligence or willful misfeasance;
(iv) The taping or other form of recording of telephone
conversations or other forms of electronic communications with other agents of
the Fund, its investors and shareholders, in accordance with applicable law, or
reliance by the Administrator on telephone or other electronic instructions of
any person acting on behalf
8
<PAGE>
of a shareholder or shareholder account reasonably believed to be genuine for
which telephone or other electronic services have been authorized; and
(v) The offer or sale of shares by the Fund in violation of any
requirement under the Federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any Federal agency or any state agency with respect
to the offer or sale of such shares in such state resulting from activities,
actions, or omissions by the Fund or its officers, employees, or agents prior to
the effective date of this Agreement.
(d) The Administrator shall indemnify and hold the Fund harmless from
and against any and all losses, damages, costs, charges, reasonable attorneys'
fees and expenses, payments, expenses and liability arising out of or
attributable to the Administrator's refusal or failure to comply with the terms
of this Agreement; the Administrator's breach of any representation or warranty
made by it herein; or the Administrator's lack of good faith, or acts involving
gross negligence, willful misfeasance or reckless disregard of its duties
hereunder.
7. Term. The Administrator will start the provision of the services
----
contemplated by this Agreement on the date first hereinabove written (except
that the Administrator shall start the provision of transfer agent services set
forth in Section 3(c) herof on whatever later date the current service provider
ceases to provide such services) and the operative terms of the Agreement will
be effective for a period of not less than one (1) year from such date.
Thereafter, this Agreement shall continue in effect from year to year provided
such continuance is specifically approved at least annually by the Board and by
the Trustees who are not "interested" persons of the Fund, cast n person at a
meeting called for the purpose of voting on such Agreement. This Agreement is
terminable, without penalty, by the Board or by the Administrator, on not less
than ninety (90) days' written notice after the initial one (1) year term.
Except as provided in Section 8 hereof, this Agreement shall automatically
terminate upon its assignment by the Administrator without the prior written
consent of the Fund. Upon termination of this Agreement, the Fund shall pay to
the Administrator such compensation and any reimbursable expenses as may be due
under the terms hereof as of the date of termination or the date that the
provision of services ceases, whichever is later.
8. Non-Assignability. This Agreement shall not be assigned by either of
-----------------
the parties hereto without the prior consent in writing of the other party;
provided, however, that the Administrator may in its own discretion and without
limitation or prior consent of the Fund, whenever and on such terms and
conditions as it deems necessary or appropriate, enter into subcontracts,
agreements and understandings with non-affiliated third parties; provided, that
such subcontract, agreement or understanding shall not discharge the
Administrator from its obligations hereunder or delegation of duties to another
third party.
9
<PAGE>
9. Force Majeure. The Administrator shall not be responsible or liable
-------------
for any failure or delay in performance of its obligations under this Agreement,
any damages, loss of data, or any other loss whatsoever, arising out of or
caused, directly or indirectly, by circumstances beyond its control, including
without limitation, acts of God, earthquakes, fires, floods, wars, civil or
military authority or governmental actions, nor shall any such failure or delay
give the Fund the right to terminate this Agreement, unless such failure or
delay shall result in the Fund's inability to comply with the requirements of
state and federal law. Administrator shall use its best efforts to minimize any
such loss of data or delay by all practicable steps. Administrator further
agrees not to discriminate against the Fund in favor of any other customer of
Administrator in making its computer time and personnel available to input and
process transactions hereunder when such a loss or delay occurs.
10. Use of Name. The Fund and the Administrator agree not to use the
-----------
other's name nor the names of such other's affiliates, designees or assignees in
any prospectus, sales literature or other printed material written in a manner
not previously expressly approved in writing by the other or such other's
affiliates, designees or assignees except where required by the SEC or any state
agency responsible for securities regulation.
11. Notice. Any notice required or permitted hereunder shall be in
------
writing to the parties at the following address (or such other address as a
party may specify by notice to the other):
If to the Fund: Heitman Securities Trust
180 North LaSalle Street, Suite 3600
Chicago, IL 60601
Attention: Dean Sotter
If to Administrator: UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Attn: Gary L. French, President
Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.
12. Waiver. The failure of a party to insist upon strict adherence to
------
any term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
10
<PAGE>
13. Severability. If any provision of this Agreement is invalid or
------------
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
14. Successor and Assigns. The covenants and conditions herein contained
---------------------
shall, subject to the provisions as to assignment, apply to and bind the
successors and assigns of the parties hereto.
15. Governing Law. This Agreement shall be governed by Massachusetts law
-------------
including its choice of law provisions.
16. Amendments. This Agreement may be modified or amended from time to
----------
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
17. Limitation of Liability. The Declaration of Trust, which is hereby
-----------------------
referred to and a copy of which is on file with the Secretary of The
Commonwealth of Massachusetts, provides that the name of the Fund means the
Trustees from time to time serving (as Trustees but not personally) under the
Declaration of Trust. It is expressly acknowledged and agreed that the
obligations of the Fund thereunder shall not be binding upon any of the
shareholders, Trustees, officers, employees or agents of the Fund, personally,
but shall bind only the trust property of the Fund, as provided in its
Declaration of Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Fund and signed by an officer of the Fund,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Fund as provided in its Declaration of
Trust.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date indicated above.
HEITMAN SECURITIES TRUST
By:
------------------------------
Name:
Title:
UAM FUND SERVICES, INC.
By:
------------------------------
Name:
Title:
12
<PAGE>
Attachment A
Fund Administration Services
Compliance
- ----------
Assist in the training of portfolio managers, management and Fund accountants
concerning compliance manuals and procedures.
Monitor each Portfolio's compliance with investment restrictions (i.e. issuer or
industry diversification, etc.) listed in the current Prospectuses and Statement
of Additional Information. (Frequency - Daily)
Monitor each Portfolio's compliance with the requirements of Internal Revenue
Code (the "Code") Section 851 for qualification as regulated investment
companies. (Frequency - Monthly)
Calculate and recommend dividend and capital gain distributions in accordance
with distribution policies detailed in the Prospectuses. (Frequency -
Determined by Prospectus)
Prepare year-end dividend and capital gain distributions to establish Fund's
status as RIC under Section 4982 of the Code regarding minimum distribution
requirements. Assist in the preparation of Federal Excise Tax Return (Form
8613). (Frequency - Annually)
Monitor investment manager's compliance with Board directives such as "Approved
Issuers Listings for Repurchase Agreements" and provisions of Rule 2a-7 for
money market funds. (Frequency - Daily)
Review investments involving interests in any broker, dealer, underwriter or
investment adviser to ensure continued compliance with Section 12(d)(3) of the
1940 Act. (Frequency - Quarterly)
Monitor the Fund's brokerage allocation and prepare quarterly brokerage
allocation reports for Board meetings (consistent with reporting from the
current service provider).
Monitor the Fund's compliance with state blue sky laws.
Reporting
- ---------
Prepare agreed upon management reports and Board materials such as unaudited
financial statements, distribution summaries and deviations of mark-to-market
valuation and the amortized cost for money market funds.
<PAGE>
Report Fund performance to outside services as directed by Fund management.
Prepare and file Fund's Semi-Annual Reports on Form N-SAR with the SEC.
Assist in the preparation of Federal tax returns along with all state and local
tax returns and State Expense Limitation returns, where applicable.
Prepare and coordinate printing of Fund's Semi-Annual and Annual Reports to
shareholders.
File copies of every report to shareholders with the SEC under Rule 30b2-1.
Notify shareholders as to what portion, if any, of the distributions made by the
Fund during the prior fiscal year were exempt-interest dividends under Section
852(b)(5)(A) of the Code.
Provide Form 1099-MISC to persons other than corporations (i.e.,
Trustees/Directors) to whom the Fund paid more than $600 during the year.
Prepare reports relating to the Fund's compliance with respect to Section 851 of
the Code.
Administration
- --------------
Serve as officers of the Fund and attend Fund Board meetings.
Prepare Fund portfolio expense projections, establish accruals and review on a
periodic basis.
Calculate expenses based on a percentage of Fund's average daily net assets
(advisory and administrative fees).
Calculate expenses based on actual charges annualized and accrued daily (audit
fees, registration fees, directors' fees, etc.).
For new Portfolios, obtain Employer Identification Number and CUSIP number.
Estimate organization (offering) costs and monitor against actual disbursements.
Provide financial information for Fund proxies and Prospectuses (Expense Table).
Coordinate all communications and data collection with regards to any regulatory
examinations and yearly audit by independent accountants.
Act as liaison to investment advisors concerning new products.
<PAGE>
Miscellaneous
- -------------
Assist with preparing and filing Rule 24f-2 Notice.
Prepare and maintain all state registrations and exemptions of the Fund's
securities including annual renewals, registering new Portfolios, preparing and
filing sales reports, filing copies of the registration statement and final
prospectus and statement of additional information, and increasing registered
amounts of securities in individual states.
Review and monitor fidelity bond and errors and omissions insurance coverage and
make any related regulatory filings.
Assist with preparation of agenda and Board materials, including materials
relating to contract renewals, for all Board meetings.
Respond to questions from the investment advisors concerning legal questions
relating to investments.
<PAGE>
Attachment B
Domestic Fund Accounting Daily Reports
- --------------------------------------
A) General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B) Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C) Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D) Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E) Other
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
<PAGE>
International Fund Accounting Daily Reports
- -------------------------------------------
A) General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B) Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C) Currency Reports
1. Currency Purchase/Sales Journal
2. Currency Valuation Report
D) Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report
E) Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F) Other
1. Exchange Rate Report
<PAGE>
Monthly Fund Accounting Reports
- -------------------------------
A) Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10. SEC Yield Calculation Work Sheet
B) International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
<PAGE>
Attachment C
Fee Schedule to the Fund Administration Agreement
1. For the general administrative services the Administrator provides
under Sections 3(a) and (e) of the Agreement, the Fund agrees to pay the
Administrator a fee with respect to each class of the Portfolio listed below at
an annual rate of .10% based on the average of the daily net assets of each such
class as determined at the close of business on each day throughout the month:
Heitman/PRA Institutional Class-Heitman Real Estate Fund
Advisor Class-Heitman Real Estate Fund
The Advisor Class and any subsequent Classes of the Heitman Real Estate
fund shall be subject to a minimum annual fee of $25,000 per class.
The administrative fee shall be payable monthly in arrears as soon as
practicable after the last day of each month.
2. For the Fund accounting services the Administrator provides under
Section 3(b) of the Agreement, the Fund on behalf of the Heitman Real Estate
Fund, agrees to pay Administrator an annual accounting fee payable monthly in
arrears, which consists of a $75,000 minimum fee, plus 0.02% on total Fund
assets in excess of $100 million. In addition the Administrator will receive a
$25,000 minimum fee for each additional class of the Fund's shares added after
the date hereof.
3. For the transfer agent and dividend disbursing services the
Administrator provides under Sections 3(c) and (d) of the Agreement, the Fund
agrees to pay the Administrator a fee on a monthly basis with respect to each
Class of the Heitman Real Estate Fund listed below equal to 1/12 of the annual
maintenance fee, subject to a minimum fee as listed below, plus out-of-pocket
expenses as follows:
(A) Heitman/PRA Institutional Class - Minimum Fee: 1,875 per month
- -----------------------------------
(B) Advisor Class - Minimum Fee: $2,250 per month
- -----------------
Maintenance Fee per Annum
-------------------------
Type of Trust Account per Account
- --------------------- -----------
Annual, Semi-Annual or Quarterly Dividend $15.00
Monthly Dividend $16.50
Daily Accrual Fund $18.00
<PAGE>
Per account fees will be applied to active accounts and zero balance
accounts with no dividend payable. Zero balance account will be purged after
year end tax reporting.
Out of pocket expenses shall be reimbursed by the Fund to the Administrator
or paid directly by the Fund. Such expenses include but are not limited to the
following:
(a) Toll-free lines (if required)
(b) Forms, envelopes, checks, checkbook
(c) Postage (bulk, pre-sort, first-class at current prevailing rates)
(d) Hardware/phone lines for remote terminal(s) (if required)
(e) Microfiche/Microfilm
(f) Wire fee for receipt - $7.50 per wire; disbursement - $12.50
(g) Mailing fee - approximately $45.00 per 1,000 Items
(h) Cost of proxy solicitation, mailing and tabulation (if required)
(i) Certificate issuance - $2.00 per certificate
(j) Record retention storage - $3.50 per cubic foot per month, plus
runner charges
(k) Development/programming cost/special projects - time and material
Ad-hoc report set up $125, plus $.012 per record passed.
Labels - $.12 per label ($75.00 minimum)
(l) ACH transaction charges - charges - $0.25 per transaction
(m) "B" notice mailing - $5.00 per item
(n) Locating lost shareholders in anticipation of escheating - $5.00
per name
(o) Commission and 12b-1 calculations - $.25 per account, per run
(p) Retroactive Record Dates for dividends, proxies, etc.
(q) Conversion expenses - to be determined, time and materials
The following is a list of additional out-of-pocket expenses which shall be
reimbursed by the Fund to the Administrator or paid directly by the Fund. Such
expenses include but are not limited to the following:
National Securities Clearing Corporation (NSCC) Charges
- -------------------------------------------------------
1. FUND SERV
Participation Fee $50.00 per month
CPU Access $40.00 per month
Transaction Fee $ 0.50 per transaction
2. Networking
Participation Fee $250.00 per month
CPU Access Fee $40.00 per month
Account Fee $ .045 per month on monthly
dividend funds
<PAGE>
$.030 per month on all other
dividend funds
3. Commission Settlements
Participation Fee $50.00 per month
Account Fee $ 0.30 per account per month
Access Charges for NSCC
- -----------------------
1. FUND/SERV
Base Facility Use Fee $500.00 per month
Transaction Fee $ .25 per Transaction
Plus out-of-pocket expenses for settlements, wire charges, NSCC pick-up
charges, etc.
2. Networking
Base Facility Use Fee $500.00 per month
Matrix Level Charges:
Level 1, 2 or 4 $ .24 per acct/month
Level 3 $ .06 per acct/month
Master/Omnibus Account $ 7.50 per
purchase/redemption
transaction
Additional Expenses (which may be paid by shareholder):
- -----------------------------------------------------
Direct IRA/Keogh processing $10.00 per account per annum
$ 7.50 new account set-up fee
$ 2.50 per distribution
$10.00 per transfer out
Exchange Fee $ 5.00 per transaction
Payment
- -------
The above will be billed within the first five (5) business days of each
month and will be paid by wire within five (5) business days of receipt.
<PAGE>
Exhibit 9(b)
MUTUAL FUNDS SERVICE AGREEMENT
. Fund Administration Services
. Fund Accounting Services
. Transfer Agency Services
THE HEITMAN SECURITIES TRUST
March 2, 1998
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents
-----------------
Section/Paragraph Page
- ----------------- ----
1. Appointment......................................... 1
2. Representations and Warranties...................... 1
3. Delivery of Documents............................... 3
4. Services Provided................................... 4
5. Fees; Expenses; Expense Reimbursement............... 5
6 Proprietary and Confidential Information............ 7
7. Duties, Responsibilities and Limitation of Liability 8
8. Term................................................ 10
9. Notices............................................. 10
10. Assignability....................................... 11
11. Waiver.............................................. 11
12. Force Majeure....................................... 11
13. Amendments.......................................... 12
14. Severability........................................ 12
15. Governing Law....................................... 12
Signatures................................................. 12
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents (continued)
-----------------------------
Section/Paragraph Page
----
Schedule A -- Fees and Expenses......................... A-1
Schedule B -- Fund Administration Services Description.. B-1
Schedule C -- Fund Accounting Services Description...... C-1
Schedule D -- Transfer Agency Services Description...... D-1
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of March 2, 1998 by and between UAM FUND SERVICES,
INC. ("UAMFSI"), a Delaware corporation, and CHASE GLOBAL FUNDS SERVICES COMPANY
("Chase"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, The Heitman Securities Trust (the "Trust") is registered as an
open-end management, investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and currently offers for sale to investors
its shares in several investment portfolios ("Portfolios") and classes of such
Portfolios ("Classes");
WHEREAS, UAMFSI is responsible for the provision of certain fund
administration, fund accounting and transfer agent services with respect to the
Trust pursuant to the Agreement between UAMFSI and the Trust dated March 2,
1998, (the "Administration Agreement"); and
WHEREAS, UAMFSI wishes to retain Chase to provide certain fund
administration, fund accounting and transfer agent services with respect to the
Trust, and Chase is willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. UAMFSI hereby appoints Chase to provide certain fund
administration, fund accounting and transfer agent services for the Trust,
subject to the supervision of UAMFSI and the Board of Trustees of the Trust (the
"Board"), for the period and on the terms set forth in this Agreement. Chase
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Paragraph 5, of and Schedule A, to
this Agreement.
2. Representations and Warranties.
(a) Chase represents and warrants to UAMFSI that:
(i) Chase is a corporation existing under the laws of the State of
Delaware;
1
<PAGE>
(ii) Chase is duly qualified to carry on its business in the
Commonwealth of Massachusetts;
(iii) Chase is empowered under applicable laws and by its
Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;
(iv) all requisite corporate proceedings have been taken to
authorize Chase to enter into and perform this Agreement;
(v) Chase has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;
(vi) Chase is registered as a transfer agent pursuant to Section
17A of the Securities Exchange Act of 1934;
(vii) no legal or administrative proceedings have been instituted
or threatened which would impair Chase's ability to perform its duties and
obligations under this Agreement; and
(viii) Chase's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of Chase or any law or regulation applicable to Chase;
(b) UAMFSI represents and warrants to Chase that:
(i) UAMFSI is a corporation existing under the laws of the
State of Delaware;
(ii) UAMFSI is duly qualified to carry on its business in the
Commonwealth of Massachusetts;
(iii) UAMFSI is empowered under applicable laws and by its
Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;
(iv) all requisite corporate proceedings have been taken to
authorize UAMFSI to enter into and perform this Agreement;
(v) UAMFSI has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;
(vi) no legal or administrative proceedings have been instituted
or threatened which would impair UAMFSI's ability to perform its duties and
obligations under this Agreement; and
2
<PAGE>
(vii) UAMFSI's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of UAMFSI or any law or regulation applicable to UAMFSI;
(c) UAMFSI represents and warrants to Chase with respect to the Trust
that:
(i) the Trust is a Massachusetts business trust, duly organized
and existing and in good standing under the laws of the Commonwealth of
Massachusetts;
(ii) the Trust is an investment company properly registered
under the 1940 Act;
(iii) a registration statement for the Trust under the Securities
Act of 1933, as amended ("1933 Act") and the 1940 Act on Form N-1A has been
filed and will be effective and will remain effective during the term of this
Agreement, and all necessary filings under the laws of the states will have been
made and will be current during the term of this Agreement; and
(iv) to the best of the Trust's knowledge, the Trust's
registration statements comply in all material respects with the Securities Act
of 1933 ("1933 Act") and the 1940 Act (including the rules and regulations
thereunder) and none of the Trust's prospectuses contain any untrue statement of
material fact or omit to state a material fact necessary to make the statements
therein not misleading.
3. Delivery of Documents. UAMFSI will promptly furnish to Chase such
copies, properly certified or authenticated, of contracts, documents and other
related information that Chase may reasonably request or require to properly
discharge its duties. Such documents may include but are not limited to the
following:
(a) Resolutions of the Trust's Board authorizing the appointment of
UAMFSI to provide certain fund administration, fund accounting and transfer
agency services to the Trust and approving this Agreement;
(b) UAMFSI's and the Trust's Declaration of Trust;
(c) UAMFSI's and the Trust's By-Laws;
(d) Authorization by the Trust contained in the Administration
Agreement allowing UAMFSI to make representations to Chase on its behalf;
(e) The Trust's Notification of Registration on Form N-8A under the
1940 Act, as filed with the Securities and Exchange Commission ("SEC");
3
<PAGE>
(f) The Trust's registration statement including exhibits, as amended,
on Form N-1A (the "Registration Statement") under the 1933 Act and the 1940 Act,
as filed with the SEC;
(g) Copies of the Investment Advisory Agreements between the Trust and
its investment advisers (the "Advisory Agreements");
(h) Opinions of counsel and auditors' reports;
(i) The Trust's Prospectus(es) and Statement(s) of Additional
Information relating to all Portfolios and all amendments and supplements
thereto (such Prospectus(es) and Statement(s) of Additional Information and
supplements thereto, as presently in effect and as from time to time hereafter
amended and supplemented, herein called the "Prospectuses"); and
(j) Such other agreements as the Trust may enter into from time to
time which may be relevant to the performance of Chase's duties and obligations
under the terms of this Agreement, including securities lending agreements,
futures and commodities account agreements, brokerage agreements, and options
agreements.
4. Services Provided
(a) Chase will provide the following services subject to the control,
direction and supervision of UAMFSI and the Trust's Board and in compliance with
the objectives, policies and limitations set forth in the Trust's Registration
Statement, Articles of Incorporation and By-Laws; applicable laws and
regulations; and all resolutions and policies implemented by the Board:
(i) Fund Administration
(ii) Fund Accounting
(iii) Transfer Agency
A description of each of the above services is contained in Schedules B, C, and
D respectively, to this Agreement.
(b) Chase will also:
(i) provide office facilities with respect to the provision of
the services contemplated herein (which may be in the offices of Chase or a
corporate affiliate of Chase );
(ii) provide the services of individuals to serve as officers of
the Trust who will be designated by Chase with the approval of UAMFSI, and
elected by the Board;
4
<PAGE>
(iii) provide or otherwise obtain personnel sufficient for
provision of the services contemplated herein;
(iv) furnish equipment and other materials, which Chase believes
are necessary or desirable for provision of the services contemplated herein;
and
(v) keep records relating to the services provided hereunder in
such form and manner as set forth in Schedules B, C and D in accordance with the
1940 Act. To the extent required by Section 31 of the 1940 Act and the rules
thereunder, Chase agrees that all such records prepared or maintained by Chase
relating to the services provided hereunder are the property of UAMFSI and the
Trust and will be preserved for the periods prescribed under Rule 31a-2 under
the 1940 Act, maintained at UAMFSI's and/or the Trust's expense, and made
available in accordance with such Section and rules. Chase further agrees to
surrender promptly to UAMFSI or the Trust upon its request and cease to retain
in its records and files those records and documents created and maintained by
Chase pursuant to this Agreement, unless otherwise required by law. Upon such
request, Chase will surrender such records in a mutual agreeable electronic
format.
5. Fees; Expenses; Expense Reimbursement.
(a) As compensation for the services rendered to the Trust and UAMFSI
pursuant to this Agreement, UAMFSI shall pay Chase monthly fees determined as
set forth in Schedule A to this Agreement. Such fees are to be billed monthly
and shall be due and payable upon receipt of the invoice. Upon any termination
of this Agreement before the end of any month, the fee for the part of the month
before such termination shall be prorated according to the proportion which such
part bears to the full monthly period and shall be payable upon the date of
termination of this Agreement.
(b) For the purpose of determining fees calculated as a function of
the Trust's assets, the value of the Trust's assets and net assets shall be
computed as required by its currently effective Prospectus, generally accepted
accounting principles, and resolutions of the Trust's Board.
(c) Chase may, in its sole discretion, from time to time employ or
associate with such person or persons as may be appropriate to assist Chase in
the performance of this Agreement. Such person or persons may be officers and
employees who are employed or designated as officers by both Chase and the
Trust. The compensation of such person or persons
5
<PAGE>
for such employment shall be paid by Chase and no obligation will be incurred by
or on behalf of the Trust or UAMFSI in such respect.
6
<PAGE>
(d) UAMFSI may request additional services, additional processing, or
special reports on behalf of the Trust or itself. UAMFSI shall submit such
requests in writing together with such specifications and requirements
documentation as may be reasonably required by Chase. If Chase elects to
provide such services or arrange for their provision, it shall be entitled to
reasonable additional fees and expenses at its customary rates and charges, or
such other fees, if any, mutually agreed to by Chase and UAM FSI.
(e) Chase will bear all of its own expenses in connection with the
performance of the services under this Agreement except as otherwise expressly
provided herein. UAMFSI agrees to promptly reimburse Chase for any equipment
and supplies specially ordered by or for UAMFSI or the Trust through Chase and
for any other expenses not contemplated by this Agreement that Chase may incur
on the Trust's and/or UAMFSI's behalf at the Trust's and/or UAMFSI's request or
as consented to by the Trust and/or UAMFSI, provided that Chase will notify the
Trust and/or UAMFSI of the approximate amount of such expenses prior to
incurring them. Such other expenses to be incurred in the operation of the
Trust and to be borne by the Trust and/or UAMFSI, include, but are not limited
to: taxes; interest; brokerage fees and commissions; salaries and fees of
officers and trustees who are not officers, directors, shareholders or employees
of Chase, or the Trust's investment advisers or distributor; SEC and state Blue
Sky registration and qualification fees, levies, fines and other charges; EDGAR
filing fees, processing services and related fees; advisory and administration
fees; charges and expenses of pricing and data services, independent public
accountants and custodians; insurance premiums including fidelity bond premiums;
auditing and legal expenses; costs of maintenance of trust existence; expenses
of typesetting and printing of prospectuses for regulatory purposes and for
distribution to current shareholders of the Trust (the Trust's distributor to
bear the expense of all other printing, production, and distribution of
prospectuses, statements of additional information, and marketing materials);
expenses of printing and production costs of shareholders' reports and proxy
statements and materials; costs and expenses of Trust stationery and forms;
costs and expenses of special telephone and data lines and devices; costs
associated with corporate, shareholder, and Board meetings; trade association
dues and expenses; and any extraordinary expenses and other customary Trust
expenses. In addition, Chase may utilize one or more independent pricing
services, approved from time to time by the Trust's Board, to obtain securities
prices and to act as backup to the primary pricing services, in connection with
7
<PAGE>
determining
8
<PAGE>
the net asset values of the Trust, and UAMFSI and/or the Trust will reimburse
Chase for the Trust's share of the cost of such services based upon the actual
usage, or a pro-rata estimate of the use, of the services for the benefit of the
Trust.
(f) All fees, out-of-pocket expenses, or additional charges of Chase
shall be billed on a monthly basis and shall be due and payable upon receipt of
the invoice.
Chase will render, after the close of each month in which services have
been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days of receipt shall bear interest
in finance charges equivalent to, in the aggregate, the Prime Rate (as
determined by Chase) plus two percent per year and all costs and expenses of
effecting collection of any such sums, including reasonable attorney's fees,
shall be paid by UAMFSI to Chase.
In the event that UAMFSI is more than sixty (60) days delinquent in its
payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by UAMFSI),
this Agreement may be terminated upon thirty (30) days' written notice to UAMFSI
by Chase. UAMFSI must notify Chase in writing of any contested amounts within
thirty (30) days of receipt of a billing for such amounts. Disputed amounts are
not due and payable while they are being disputed. The fees set forth in
Schedule A may be changed from time to time upon agreement of the parties.
6. Proprietary and Confidential Information. Chase agrees on behalf of
itself and its employees to treat confidentially and as proprietary information
of the Trust, all records and other information relative to the Trust's prior,
present or potential shareholders, and to not use such records and information
for any purpose other than performance of Chase's responsibilities and duties
hereunder. Chase may seek a waiver of such confidentiality provisions by
furnishing reasonable prior notice to the Trust and UAMFSI and obtaining
approval in writing from the Trust and UAMFSI, which approval shall not be
unreasonably withheld and may not be withheld where Chase may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities. Waivers of
confidentiality are automatically effective without further action by Chase with
respect to Internal Revenue Service levies, subpoenas and similar actions, or
with respect to any request by the Trust or UAMFSI.
9
<PAGE>
7. Duties, Responsibilities, and Limitation of Liability.
(a) In the performance of its duties hereunder, Chase shall be
obligated to act in good faith in performing the services provided for under
this Agreement. In performing its services hereunder, UAMFSI represents and
warrants that Chase shall be entitled to rely on any oral or written
instructions, notices or other communications, including electronic
transmissions, from UAMFSI and the Trust and its custodians, officers and
directors, investors, agents, legal counsel and other service providers which
Chase reasonably believes to be genuine, valid and authorized, and that Chase
shall also be entitled to consult with and rely on the advice and opinions of
outside legal counsel retained by UAMFSI and/or the Trust, as necessary or
appropriate. Also, Chase shall be entitled to rely on any financial,
regulatory, tax or other records or information provided by the Trust or third
parties prior to the date of this Agreement without verification by Chase.
(b) Chase shall not be liable for any error of judgment or mistake of
law or for any loss or expense suffered by the Trust or UAMFSI, in connection
with the matters to which this Agreement relates, except for a loss or expense
solely caused by or resulting from willful misfeasance, bad faith or gross
negligence on Chase's part in the performance of its duties or from reckless
disregard by Chase of its obligations and duties under this Agreement. Any
person, even though also an officer, director, partner, employee or agent of
Chase, who may be or become an officer, director, partner, employee or agent of
the Trust, shall be deemed when rendering services to the Trust or acting on any
business of the Trust (other than services or business in connection with
Chase's duties hereunder) to be rendering such services to or acting solely for
the Trust and not as an officer, director, partner, employee or agent or person
under the control or direction of Chase even though paid by Chase. In no event
shall Chase be liable to the Trust, UAMFSI or any other party for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if Chase has been advised of the likelihood
of such loss or damage and regardless of the form of action.
(c) Subject to Paragraph 7 (b) above, Chase shall not be responsible
for, and UAMFSI shall indemnify and hold Chase harmless from and against, any
and all losses, damages, costs, reasonable attorneys' fees and expenses,
payments, expenses and liabilities arising out of or attributable to:
10
<PAGE>
(i) all actions of Chase or its officers or agents required to
be taken pursuant to this Agreement;
11
<PAGE>
(ii) the reliance on or use by Chase or its officers or agents of
information, records, or documents which are received by Chase or its officers
or agents and furnished to it or them by or on behalf of UAMFSI and/or the
Trust, and which have been prepared or maintained by UAMFSI and/or the Trust or
any third party on behalf of UAMFSI and/or the Trust; including but not limited
to any information, records, or accounts which were prepared or maintained by
any parties prior to March 2, 1998;
(iii) UAMFSI's refusal or failure to comply with the terms of this
Agreement or UAMFSI's lack of good faith, or its actions, or lack thereof,
involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of UAMFSI
hereunder;
(v) the taping or other form of recording of telephone
conversations or other forms of electronic communications with investors and
shareholders, or reliance by Chase on telephone or other electronic instructions
of any person acting on behalf of a shareholder or shareholder account for which
telephone or other electronic services have been authorized;
(vi) the reliance on or the carrying out by Chase or its officers
or agents of any proper instructions reasonably believed to be duly authorized,
or requests of the Trust or UAMFSI, or recognition by Chase of any share
certificates which are reasonably believed to bear the proper signatures of the
officers of the Trust and the proper countersignature of any transfer agent or
registrar of the Trust;
(vii) any delays, inaccuracies, errors in or omissions from data
provided to Chase by data, pricing and/or corporate action services;
(viii) the offer or sale of shares by the Trust in violation of any
requirement under the Federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any Federal agency or any state agency with respect
to the offer or sale of such shares in such state (1) resulting from activities,
actions, or omissions by the Trust or its other service providers and agents, or
(2) existing or arising out of activities, actions or omissions by or on behalf
of the Trust prior to the effective date of this Agreement;
12
<PAGE>
(ix) any failure of the Trust's registration statement to comply
with the 1933 Act and the 1940 Act (including the rules and regulations
thereunder) and any other applicable laws, or any untrue statement of a material
fact or omission of a material fact necessary to make any statement therein not
misleading in a Trust's prospectus; and
(x) the actions taken by UAMFSI, its investment advisers, and its
distributor in compliance with applicable securities, tax, commodities and other
laws, rules and regulations, or the failure to so comply.
8. Term. This Agreement shall become effective on the date first
hereinabove written and shall continue for an initial term of one year, unless
sooner terminated, as provided herein. Thereafter, unless so terminated, this
Agreement shall continue in effect from year to year provided such continuance
is specifically approved by UAMFSI. This Agreement may be modified or amended
from time to time by mutual agreement between the parties hereto. This Agreement
may be terminated by either party on 90 days' prior written notice; subject to
renegotiation after the initial term. Upon termination of this Agreement, UAMFSI
shall pay to Chase such compensation and any out-of-pocket or other reimbursable
expenses which may become due or payable under the terms hereof as of the date
of termination or after the date that the provision of services ceases,
whichever is later.
9. Notices. Any notice required or permitted hereunder shall be in
writing to the parties at the following address (or such other address as a
party may specify by notice to the other):
If to UAMFSI:
UAM Fund Services, Inc.
211 Congress Street, 4th Floor
Boston, MA 02110
Attention: Gary L. French, President
Fax: (617) 542-7440
If to Chase:
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
Attention: Karl O. Hartmann, General Counsel
Fax: (617) 557-8616
13
<PAGE>
Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise) or upon confirmed
receipt of telex or facsimile, whichever occurs first.
10. Assignability. This Agreement shall not be assigned by either of the
parties hereto without the prior consent in writing of the other party;
provided, however, that Chase may in its own discretion and without limitation
or prior consent of the Trust or UAMFSI, whenever and on such terms and
conditions as Chase deems necessary or appropriate, subcontract, delegate or
assign its rights, duties, obligations and liabilities to subsidiaries or
affiliates of Chase; provided, further, that any such subcontract, agreement or
understanding shall not discharge Chase or its affiliates or subsidiaries, as
the case may be, from its obligations hereunder. Similarly, Chase or its
affiliated subcontractor, designee, or assignee may at its discretion, without
notice to the Trust or UAMFSI, enter into such subcontracts, agreements and
understandings, whenever and on such terms and conditions as Chase or they deem
necessary or appropriate to perform services hereunder, with non-affiliated
third parties; provided, that such subcontract, agreement or understanding shall
not discharge Chase, or its subcontractor, designee, or assignee, as the case
may be, from Chase's obligations hereunder. Chase or its affiliated
subcontractor, designee, or assignee shall, however, be discharged from Chase's
obligations hereunder, if UAMFSI, the Trust or its sponsor, investment advisers
or distributor require Chase or its affiliated subcontractor, designee, or
assignee to enter into any subcontract, agreement or understanding to perform
services hereunder with any non-affiliated third party; and UAMFSI shall
indemnify and hold harmless Chase and its affiliated subcontractor, designee, or
assignee from and against, any and all losses, damages, costs, reasonable
attorneys' fees and expenses, payments, expenses and liabilities arising out of
or attributable to such subcontract, agreement or understanding.
11. Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
12. Force Majeure. Chase shall not be responsible or liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its control,
including without limitation, acts of God, earthquakes,
14
<PAGE>
wars, acts of civil or military authorities, or governmental actions, nor shall
any such failure or delay give the Trust the right to terminate this Agreement.
13. Amendments. This Agreement may be modified or amended from time to
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
14. Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK, INCLUDING THE DETERMINATION OF WHEN AN
"ASSIGNMENT" HAS OCCURRED.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
UAM FUND SERVICES, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CHASE GLOBAL FUNDS
SERVICES COMPANY
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
15
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE A
FEES AND EXPENSES
Fees for Fund Accounting, Fund Administration, and Transfer Agency Services for
- -------------------------------------------------------------------------------
The Heitman Securities Trust and all other UAM affiliated mutual funds for which
- --------------------------------------------------------------------------------
Chase provides services (the "Trusts")
- --------------------------------------
. 19 Basis Points on the first $200 million of total net assets of the Trusts,
. 11 Basis Points on the next $800 million of total net assets of the Trusts,
. 7 Basis Points on the next $2 billion of total net assets of the Trusts,and
. 5 Basis Points on total net assets of the Trusts in excess of $3 billion.
A minimum annual fee of $70,000 per Portfolio will apply.
All Portfolios will have an additional minimum annual charge of $20,000 per
Portfolio class of shares. However, there will be no extra charge for an
additional class of shares where the Portfolio's fees already exceed the minimum
applicable fee by $20,000.
These fees do not include out-of-pocket expenses, which under the terms of this
Agreement will be billed monthly and due upon billing.
A-1
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE B
GENERAL DESCRIPTION OF FUND ADMINISTRATION SERVICES
I. Financial and Tax Reporting
A. Prepare agreed upon management reports and Board of Trustees materials
such as unaudited financial statements and distribution summaries.
B. Report Trust performance to outside services as directed by Trust
management or UAMFSI.
C. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Trust's prospectus(es). Assist
UAMFSI in making final determinations of distribution amounts.
D. Estimate and recommend year-end dividend and capital gain
distributions necessary to establish the Portfolio's status as a
regulated investment company ("RIC") under Section 4982 of the
Internal Revenue Code of 1986, as amended (the "Code") regarding
minimum distribution requirements.
E. Working with the Trust's public accountants or other professionals,
prepare and file Trust's Federal tax return on Form 1120-RIC along
with all state and local tax returns where applicable. Prepare and
file Federal Excise Tax Return (Form 8613).
F. Prepare and file Trust's Form N-SAR with the SEC.
G. Prepare and coordinate printing of Trust's Semiannual and Annual
Reports to Shareholders.
H. Notify shareholders as to what portion, if any, of the distributions
made by the Trust's during the prior fiscal year were exempt-interest
dividends under Section 852 (b)(5)(A) of the Code.
I. Provide Form 1099-MISC to persons other than corporations (i.e.,
Trustees to whom the Trust paid more than $600 during the year).
J. Prepare and file California State Expense Limitation Report, if
applicable.
K. Provide financial information for Trust proxies and prospectuses
(Expense Table).
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II. Portfolio Compliance
A. Assist with monitoring each Portfolio's compliance with investment
restrictions (e.g., issuer or industry diversification, etc.) listed
in the current prospectus(es) and Statement(s) of Additional
Information, although primary responsibility for such compliance shall
remain with the Trust's investment adviser or investment manager.
B. Assist with monitoring each Portfolio's compliance with the
requirements of Section 851 of the Code for qualification as a RIC
(i.e., 90% Income, 30% Income - Short Three, Diversification Tests)
and provide reports regarding such compliance although primary
responsibility for such compliance shall remain with the Trust's
investment adviser or investment manager.
C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase
Agreements", Rule 17a-7, and Rule 12d-3 procedures, although primary
responsibility for such compliance shall remain with the Trust's
investment adviser or investment manager.
D. Mail quarterly requests for "Securities Transaction Reports" to the
Trust's "access persons" under the terms of the Trust's Code of Ethics
and SEC regulations.
III. Regulatory Affairs and Corporate Governance
A. Prepare and file all state registrations of the Trust's securities
including annual renewals, registering new Portfolios, preparing and
filing sales reports, filing copies of the registration statement and
final prospectus and statement of additional information, and
increasing registered amounts of securities in individual states.
B. Prepare and file Rule 24f-2 Notice.
C. File copies of financial reports to shareholders with the SEC under
Rule 30b2-1.
IV. General Administration
A. Furnish officers of the Trust, subject to reasonable UAMFSI and Board
approval.
B. Prepare Trust or Portfolio expense projections, establish accruals and
review on a periodic basis, including expenses based on a percentage
of Trust's average daily net assets (advisory and administrative fees)
and expenses based on actual charges annualized and accrued daily
(audit fees, registration fees, trustees' fees, etc.).
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C. For new Portfolios, obtain Employer or Taxpayer Identification Number
and CUSIP numbers. Estimate organizational costs and expenses and
monitor against actual disbursements.
D. Assist with any regulatory examinations and yearly audits by
independent accountants.
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MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE C
GENERAL DESCRIPTION OF FUND ACCOUNTING SERVICES
I. General Description
Chase shall provide the following accounting services to the Trust:
A. Maintenance of the books and records and accounting controls for the
Trust's assets, including records of all securities transactions;
B. Calculation of each Portfolio's Net Asset Value in accordance with
the prospectus and once the Portfolio meets eligibility
requirements, transmission to NASDAQ and to such other entities as
directed by the Trust and/or UAMFSI;
C. Accounting for dividends and interest received and distributions
made by the Trust;
D. Production of transaction data, financial reports and such other
periodic and special reports as UAMFSI and/or the Board may
reasonably request;
E. Liaison with the Trust's independent auditors; and
F. A listing of reports that will be available to UAMFSI and the Trust
is included below.
II. Domestic Fund Accounting Daily Reports
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
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C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
III. International Fund Accounting Daily Reports
A. General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C. Currency Reports
1. Currency Purchase /Sales Journal
2. Currency Valuation Report
D. Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report
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<PAGE>
E. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F. Other Reports
1. Exchange Rate Report
IV. Monthly Fund Accounting Reports
A. Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
B. International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
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<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE D
GENERAL DESCRIPTION OF TRANSFER AGENCY SERVICES
The following is a general description of the transfer agency
services Chase shall provide to the Trust.
A. Shareholder Recordkeeping. Maintain records showing for each
Trust shareholder the following: (i) name, address, appropriate
tax certification and tax identifying number; (ii) number of
shares of each Portfolio and/or Class; (iii) historical
information including, but not limited to, dividends paid and
date and price of all transactions, including individual
purchases and redemptions, with appropriate supporting
documents; and (iv) any dividend reinvestment order,
application, dividend to a specific address and correspondence
relating to the current maintenance of the account.
B. Shareholder Issuance. Record the issuance of shares of common
stock of each Portfolio and/or Class and notify the Trust in
case any proposed issue of shares by the Trust shall result in
an over-issue as identified by Section 8-104(2) of the Uniform
Commercial Code and in case any issue would result in such an
over-issue, shall refuse to countersign and issue, and/or
credit, said shares. Except as specifically agreed in writing
between Chase and the Trust, Chase shall have no obligation when
countersigning and issuing and/or crediting shares to take
cognizance of any other laws relating to the issue and sale of
such shares except insofar as policies and procedures of the
Stock Transfer Association recognize such laws.
C. Purchase Orders. Process all orders for the purchase of shares
of the Trust in accordance with the Trust's current prospectus,
including electronic transmissions, which the Trust acknowledges
it has authorized. Upon receipt of any check or other payment
for purchase of shares of the Trust from an investor, Chase will
(i) stamp the order or other documentation with the date and
time of receipt, (ii) forthwith process the same for collection,
(iii) determine the amounts thereof due the Trust, and notify
the Trust of such determination and deposit, such notification
to be given on a daily basis of the total amounts determined and
deposited to the Trust's custodian bank account during such day.
Chase shall then credit the share account of the investor with
the number of Trust shares to be purchased according to the
price of the Trust's shares in effect for purchases made on the
date such payment is received by Chase, as set forth in the
Trust's current prospectus and shall promptly mail a
confirmation of said purchase to the investor, all subject to
any instructions which the Trust may give to Chase with respect
to the timing or manner of acceptance of orders for shares
relating to payments so received by it. Any purchase order
received by Chase, which is deemed not in good order by Chase,
will be rejected immediately.
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<PAGE>
D. Redemption Orders. Receive and stamp with the date and time of receipt
all requests for redemptions or repurchase of shares held in certificate
or non-certificate form, and process redemptions and repurchase requests
as follows: (i) if such certificate or redemption request complies with
the applicable standards approved by the Trust, Chase shall on each
business day notify the Trust of the total number of shares presented
and covered by such requests received by Chase on such day; (ii) on or
prior to the seventh calendar day succeeding any such requests received
by Chase, Chase shall notify the Custodian, subject to instructions from
the Trust, to transfer monies to such account as designated by Chase for
such payment to the redeeming shareholder of the applicable redemption
or repurchase price; and (iii) if any such certificate or request for
redemption or repurchase does not comply with applicable standards,
Chase shall promptly notify the investor of such fact, together with the
reason therefor, and shall effect such redemption at the Portfolio's
price next determined after receipt of documents complying with said
standards or, at such other time as the Trust shall so direct.
E. Telephone Orders. Process redemptions, exchanges and transfers of Trust
shares upon telephone instructions from qualified shareholders in
accordance with the procedures set forth in the Trust's current
prospectus. Chase shall be permitted to redeem, exchange and/or
transfer Trust shares from any account for which such services have been
authorized, including electronic transmissions.
F. Transfer of Shares. Upon receipt by Chase of documentation in proper
form to effect a transfer of shares, including in the case of shares for
which certificates have been issued, the share certificates in proper
form for transfer, Chase will register such transfer on the Trust's
shareholder records maintained by Chase pursuant to instructions
received from the transferor in good form, cancel the certificates
representing such shares, if any, and if so requested, countersign,
register, issue and mail by first class mail new certificates for the
same or a smaller whole number of shares.
G. Shareholder Communications. Address and mail all communications by the
Trust to its shareholders promptly following the delivery by the Trust
of the material to be mailed.
H. Proxy Materials. Prepare shareholder lists, mail and certify as to the
mailing of proxy materials, receive the tabulated proxy cards, render
periodic reports to the Trust on the progress of such tabulation, and
provide the Trust with inspectors of election at any meeting of
shareholders.
I. Share Certificates. If a shareholder of the Trust requests a
certificate representing his shares, Chase as Transfer Agent, will
countersign and mail, a share certificate to the investor at his/her
address as it appears on the Trust's transfer books. Chase shall
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<PAGE>
supply, at the expense of the Trust a supply of blank share
certificates. The certificates shall be properly signed, manually or by
facsimile, as authorized by the Trust, and shall bear the Trust's seal
or facsimile; and notwithstanding the death, resignation or removal of
any officers of the Trust authorized to sign certificates, Chase may,
until otherwise directed by the Trust, continue to countersign
certificates which bear the manual or facsimile signature of such
officer.
J. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, Chase will take such
steps, including redepositing the check for collection, returning the
check to the investor, or redeeming appropriate shares as Chase may, at
its discretion, deem appropriate and notify the Trust of such action, or
as the Trust may instruct. However, the Trust remains ultimately liable
for any returned checks of its shareholders.
K. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed
upon.
L. Tax Reporting. Chase shall issue appropriate shareholder tax forms on
an annual basis.
M. Escheatment. All Trust assets shall be subject to the escheatment laws
of the Commonwealth of Massachusetts, including those which relate to
reciprocal agreements with other states.
N. Dividend Disbursing. Chase will serve as the Trust's dividend
disbursing agent. Chase will prepare and mail checks, place wire
transfers and credit income and capital gain payments to shareholders.
UAMFSI and/or the Trust will advise Chase of the declaration of any
dividend or distribution and the record and payable date thereof at
least five (5) days prior to the record date. Chase will, on or before
the payment date of any such dividend or distribution, notify the
Trust's Custodian of the estimated amount required to pay any portion of
such dividend or distribution payable in cash, and on or before the
payment date of such distribution, the Trust will instruct its Custodian
to make available to Chase sufficient funds for the cash amount to be
paid out. If a shareholder is entitled to receive additional shares by
virtue of any such distribution or dividend, appropriate credits will be
made to each shareholder's account.
D-3
<PAGE>
Exhibit 9(c)
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of January 6, 1998 (the
"Agreement") between HEITMAN SECURITIES TRUST, a Massachusetts business trust
(the "Heitman Trust"), and UAM FUNDS TRUST, a Delaware business trust (the "UAM
Trust").
WHEREAS, the Heitman Trust was organized under Massachusetts law as a business
trust and operates under a First Amended and Restated Master Trust Agreement
dated February 28, 1995, as amended (the "Heitman Trust Agreement"). The Heitman
Trust is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the UAM Trust has been organized under Delaware law as a business
trust under an Agreement and Declaration of Trust dated May 19, 1994 (the "UAM
Trust Agreement"). The UAM Trust is an open-end, management investment company
registered under the 1940 Act.
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree to effect the reorganization of Heitman Real Estate Fund
(the "Fund"), the sole series of the Heitman Trust which offers shares of
beneficial interest of two classes, the Heitman/PRA Institutional Class (the
"Heitman Institutional Class") and the Advisor Class (the "Heitman Advisor
Class" and together with the Heitman Institutional Class, the "Acquired Fund
Shares"), into the UAM/Heitman Real Estate Portfolio (the "UAM Heitman
Portfolio"), a newly-created shell series of the UAM Trust which offers shares
of beneficial interest of the UAM Heitman Class (the "UAM Institutional Class")
and the UAM Advisor Class (the "UAM Advisor Class" and together with the UAM
Institutional Class, the "UAM Heitman Shares") as follows:
1. Plan of Reorganization. Subject to the terms and conditions herein set
forth and on the basis of the representations and warranties contained herein,
at the Effective Time of the Reorganization (as defined in Section 12), the
Heitman Trust, on behalf of the Fund, shall transfer all of the assets of the
Fund, and assign all of the Fund's liabilities, to the UAM Trust, on behalf of
the UAM Heitman Portfolio, and the UAM Trust, on behalf of the UAM Heitman
Portfolio, shall acquire all such assets, and shall assume all such liabilities
of the Fund, in exchange for delivery to the Heitman Trust, on behalf of the
Fund by the UAM Trust, on behalf of the UAM Heitman Portfolio, of a number of
UAM Institutional Class Shares and UAM Advisor Class Shares (both full and
fractional) equivalent to the number of Heitman Institutional Class Shares and
Heitman Advisor Class Shares, respectively, outstanding immediately prior to the
Effective Time of the Reorganization. Promptly after the Effective Time of the
Reorganization, the Fund shall distribute such UAM Heitman Shares to the
shareholders of the Fund. (The foregoing transactions are collectively referred
to as the "Reorganization"). This Agreement is intended to be and is adopted as
a plan of reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Assumption of Liabilities. All debts, liabilities, obligations and duties
of the Fund existing at the Effective Time of the Reorganization, shall be
assumed by the UAM Trust, on behalf of the UAM Heitman Portfolio, at the
Effective Time of the Reorganization.
3. Transfer of Assets. The assets of the Fund to be acquired by the UAM
Trust on behalf of the UAM Heitman Portfolio and allocated thereto shall
include, without limitation, all cash, cash equivalents, securities, receivables
(including interest and dividends receivable), any claims or rights of action or
rights to register shares under applicable securities laws, any books or records
of the Fund and other property owned by the Fund on the books of the Fund at the
Effective Time of the Reorganization.
4. Shareholder Actions. Immediately upon delivery to the Fund of the UAM
Heitman Shares, the Fund, as the then sole shareholder of the UAM Heitman
Portfolio, shall (i) approve an Investment Management Agreement (the "New
Investment Management Agreement") between the UAM Trust, on behalf of the UAM
Heitman Portfolio, and Heitman/PRA Advisors, Inc. ("Heitman/PRA"), (ii) approve
a Plan of Distribution pursuant to Rule 12b-1 with respect to the UAM Advisor
Class Shares, (iii) approve a Shareholder Servicing Plan with respect to the UAM
Advisor Class Shares and (iv) ratify the selection of Price Waterhouse LLP as
the independent accountants of the Fund.
5. Liquidation of the Fund. At the Effective Time of the Reorganization, the
Fund will liquidate and the UAM Heitman Shares (both full and fractional)
received by the Fund will be distributed to the shareholders of record as of the
Effective Time of the Reorganization of the Fund in exchange for their
respective Acquired Fund Shares. Each shareholder of the Fund shall receive a
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<PAGE>
number of UAM Heitman Shares of the corresponding class equal to the number of
Acquired Fund Shares of the particular class held by that shareholder at the
Effective Time of the Reorganization. UAM Trust shall establish an open account
on the share records of the UAM Heitman Portfolio in the name of each
shareholder of the Fund and representing the respective number of UAM Heitman
Shares of each class due such shareholder. At the Effective Time of the
Reorganization, the net asset value per share of each class of the UAM Heitman
Portfolio shall be deemed to be the same as the net asset value per share of
each corresponding class of the Fund. As soon as practicable after the Effective
Time of the Reorganization, the Heitman Trust shall take, in accordance with
Massachusetts law, all steps as shall be necessary and proper to effect a
complete dissolution and deregistration of the Heitman Trust.
6. Representations, Warranties and Covenants of the UAM Trust. The UAM Trust
represents and warrants to the Fund and the Heitman Trust as follows:
(a) Organization, Existence, etc. The UAM Trust is validly existing under
the laws of the State of Delaware as a voluntary association with transferable
shares of beneficial interest commonly known as a Delaware business trust, and
at the Effective Time of the Reorganization the UAM Heitman Portfolio will
have the power to carry on its business as set forth in its prospectus and
statement of additional information.
(b) Registration as an Investment Company. The UAM Trust is registered
under the 1940 Act as an open-end management investment company; such
registration has not been revoked or rescinded and is in full force and
effect.
(c) Shares to be Issued Upon Reorganization. The UAM Heitman Shares to be
issued in connection with the Reorganization have been duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable. There shall be no issued and outstanding UAM Heitman Shares or
any other securities issued by the UAM Heitman Portfolio prior to the
Effective Time of the Reorganization.
(d) Authority Relative to this Agreement. The UAM Trust, on behalf of the
UAM Heitman Portfolio, has the power to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the UAM Trust's Board of Trustees, no other proceedings by the
UAM Trust or the UAM Heitman Portfolio are necessary to authorize its officers
to effectuate this Agreement and the transactions contemplated hereby and this
Agreement constitutes a valid and binding obligation of the UAM Trust,
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws
relating to or affecting creditors rights and to general principles of equity.
The UAM Trust is not a party to or obligated under the UAM Trust Agreement,
its by-laws, any indenture or contract provision or any other commitment or
obligation, or subject to any order or decree, which would be violated by its
executing and carrying out this Agreement.
(e) Liabilities. There are no material liabilities of the UAM Trust,
whether or not determined or determinable, otherwise than as previously
disclosed to the Fund in writing. There are no liabilities of the UAM Trust of
any kind for which the holders of the Acquired Fund Shares shall become
responsible as the result of this Agreement or the consummation of the
transactions contemplated hereby or otherwise.
(f) Litigation. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the UAM Trust, threatened which would
adversely affect the UAM Trust or its assets or business or which would
prevent or hinder consummation of the transactions contemplated hereby or
which upon such consummation would adversely affect the UAM Heitman Portfolio.
(g) Contracts. Except for this Agreement, the UAM Trust is not a party to
or subject to any material contract, debt instrument, plan, lease, franchise,
license or permit of any kind or nature whatsoever specifically with respect
to the UAM Heitman Portfolio.
(h) Taxes. As of the Effective Time of the Reorganization, all Federal
and other tax returns and reports of the UAM Trust required by law to have
been filed shall have been filed, and all taxes shall have been paid so far as
due, or provision shall have been made for the payment thereof, and to the
best of the UAM Trust's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to any of such returns.
(i) Formation of UAM Heitman Portfolio. Prior to the Effective Time of
the Reorganization, the UAM Trust shall take all steps necessary to cause the
formation of the UAM Heitman Portfolio. The UAM Heitman Portfolio shall have
substantially the same investment objective and policies, and the same
investment adviser as the Fund.
(j) Proxy Statement. The UAM Trust shall cooperate with all reasonable
requests for information and other material by the
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<PAGE>
Fund and the Fund's counsel in connection with the preparation of the Proxy
Materials (as defined below) and related materials contemplated hereby. All
information contained in the proxy statement to be supplied to shareholders of
the Fund in connection with the Special Meeting that relates to the UAM Trust,
the UAM Heitman Portfolio, the New Investment Management Agreement, agreements
between the UAM Trust and other service providers, the effects, tax and
otherwise, of the Reorganization on Fund shareholders and other matters known
primarily to UAM Trust (i) is true and correct in all material respects and
(ii) will not contain at the time the Proxy Materials are mailed to Fund
shareholders and at the Effective Time of the Reorganization any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(k) Regulatory Actions. UAM Trust, on behalf of the UAM Heitman
Portfolio, agrees to use all reasonable efforts to obtain the approvals and
authorizations required by the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act and such of the state Blue Sky or securities laws as it
may deem appropriate in order for the UAM Heitman Portfolio to commence
operations at the Effective Time of the Reorganization, including, without
limitation, to prepare and file a Post-Effective Amendment (the "Post-
Effective Amendment") to the Registration Statement on Form N-1A of UAM Trust
(the "Registration Statement") that includes a prospectus and statement of
additional information for the UAM Heitman Portfolio.
7. Representations, Warranties and Covenants of the Heitman Trust. The
Heitman Trust represents and warrants to the UAM Trust as follows:
(a) Organization, Existence, etc. The Heitman Trust is validly existing
under the laws of the Commonwealth of Massachusetts as a voluntary association
with transferable shares of beneficial interest commonly known as a
"Massachusetts business trust" and has the power to carry on its business as
set forth in the prospectus and statement of additional information of the
Fund.
(b) Registration as Investment Company. The Heitman Trust is registered
under the 1940 Act as an open-end management investment company; such
registration has not been revoked or rescinded and is in full force and
effect. The Fund is a separate series of the Heitman Trust. All registration
statements and filings required to be filed with any state securities
commission has been filed and are effective.
(c) Financial Statements. The financial statements of the Fund for the
fiscal year ended December 31, 1996 (the "Fund Financial Statements") were
audited by Price Waterhouse LLP, the Fund's independent accountants whose
report dated February 14, 1997 expressed an unqualified opinion thereon.
(d) Authority Relative to this Agreement. The Heitman Trust on behalf of
the Fund has the power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Heitman Trust's Board of Trustees, and, except for approval by the
shareholders of the Fund, no other proceedings by the Heitman Trust or the
Fund are necessary to authorize its officers to effectuate this Agreement and
the transactions contemplated hereby and this Agreement constitutes a valid
and binding obligation of the Heitman Trust, enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other laws relative to or
affecting creditors rights and to general principles of equity. The Fund is
not in material violation of, and the execution and the performance of this
Agreement by the Heitman Trust for itself and on behalf of the Fund does not
and will not (i) violate the Heitman Trust Agreement and By-laws, or (ii)
result in a breach or violation of, or constitute a default under, any term of
any material agreement or material instrument to which the Heitman Trust is a
party or by which its properties or assets are bound, except as otherwise
previously disclosed in writing to the UAM Trust.
(e) Liabilities. There are no material liabilities of the Fund known to
the Heitman Trust whether or not determined or determinable, other than
liabilities disclosed or provided for in the Fund Financial Statements and
liabilities incurred in the ordinary course of business subsequent to December
31, 1996.
(f) Litigation. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Heitman Trust, threatened which would
adversely affect the Fund or its assets or business or which would prevent or
hinder consummation of the transactions contemplated hereby or which upon such
consummation would adversely affect the Fund.
(g) Contracts. Except for contracts and agreements disclosed on Schedule
7(g) hereto, under which no default exists, the Fund is not a party to or, as
a series of Heitman Trust or otherwise, subject to any material contract, debt
instrument, plan, lease, franchise, license or permit of any kind or nature
whatsoever.
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<PAGE>
(h) Taxes. As of the Effective Time of the Reorganization, all Federal
and other tax returns and reports of the Fund required by law to have been
filed shall have been filed, and all taxes of the Fund shall have been paid so
far as due, or provision shall have been made for the payment thereof, and to
the best of the Heitman Trust's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to any of such returns.
(i) Proxy Materials. The Heitman Trust has prepared or will prepare the
notice of meeting, form of proxy and a proxy statement of the Fund relating to
the Reorganization and the other transactions contemplated by this Agreement
(the "Proxy Materials"). All information contained in the proxy statement to
be supplied to shareholders of the Fund in connection with the Special Meeting
that relates to the Heitman Trust, the Fund, the Investment Advisory Agreement
between the Heitman Trust and Heitman/PRA Advisors, the agreements between the
Heitman Trust and other service providers, and other matters known primarily
to Heitman Trust (i) is true and correct in all material respects and (ii)
will not contain at the time the proxy statement is mailed to Fund
shareholders and at the Effective Time of the Reorganization any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
8. Conditions Precedent to Obligations of the Heitman Trust. The obligations
of the Heitman Trust on behalf of the Fund to effectuate this Agreement shall be
subject to the satisfaction (or waiver by the Heitman Trust prior to the
Effective Time of the Reorganization) of the following conditions:
(a) All representations and warranties of the UAM Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Effective Time of the Reorganization, with the same
force and effect as if made on and as of the Effective Time of the
Reorganization.
(b) Heitman Trust shall have received an opinion of Drinker, Biddle &
Reath, L.L.P., counsel to the UAM Trust (based upon or subject to such
representations, assumptions, limitations or opinions of local counsel as such
counsel may deem appropriate or necessary), dated as of the Effective Time of
the Reorganization, in a form (including the representations, assumptions,
limitations or opinions of local counsel upon which it is based or to which it
is subject) reasonably satisfactory to the Heitman Trust and the Fund,
substantially to the effect that:
(1) The UAM Trust is duly registered with the Securities and Exchange
Commission ("SEC") under the 1940 Act as an open-end, management investment
company, and such registration is in full force and effect;
(2) the UAM Heitman Portfolio is a portfolio of the UAM Trust, which is a
business trust duly created and operating pursuant to the UAM Trust
Agreement, is validly existing and in good standing under the laws of the
state of Delaware, and the UAM Trust Agreement directs the Trustees to manage
the affairs of the UAM Trust and grants them all powers necessary or
desirable to carry out such responsibility, including administering the UAM
Trust's business as described in the current prospectuses and statement of
additional information of the UAM Trust;
(3) this Agreement has been duly authorized, executed and delivered by UAM
Trust on behalf of UAM Heitman Portfolio and, assuming due authorization,
execution and delivery of this Agreement by the Heitman Trust on behalf of
the Fund, is a valid and binding obligation of the UAM Trust enforceable
against the UAM Trust in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, arrangement,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and
(4) the UAM Heitman Shares to be issued to the Fund's shareholders
pursuant to this Agreement are duly registered under the 1933 Act on the
appropriate form, and are duly authorized and upon such issuance will be
validly issued and outstanding and fully paid and non-assessable, and no
shareholder of the Fund has any preemptive rights to subscription or purchase
in respect thereof.
9. Conditions Precedent to Obligations of the UAM Trust. The obligations of
the UAM Trust on behalf of the UAM Heitman Portfolio to effectuate this
Agreement shall be subject to the satisfaction (or waiver by the UAM Trust prior
to the Effective Time of the Reorganization) of the following conditions:
(a) All representations and warranties of the Heitman Trust contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time of the
Reorganization, with the same force and effect as if made on and as of the
Effective Time of the Reorganization.
4
<PAGE>
(b) The UAM Trust shall have received an opinion of Goodwin, Procter & Hoar
LLP, counsel to the Heitman Trust (based upon or subject to such
representations, assumptions, limitations or opinions of local counsel as such
counsel may deem appropriate or necessary), dated as of the Effective Time of
the Reorganization, in a form (including the representations, assumptions,
limitations or opinions of local counsel upon which it is based or to which it
is subject) reasonably satisfactory to the UAM Trust and the UAM Heitman
Portfolio, substantially to the effect that:
(1) The Heitman Trust is duly registered with the SEC under the 1940 Act as
an open-end, management investment company, and such registration is in full
force and effect;
(2) the Fund is a portfolio of the Heitman Trust, which is a business trust
duly created and operating pursuant to the Heitman Trust Agreement, is
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts, and the Heitman Trust Agreement directs the Trustees to manage
the affairs of the Heitman Trust and grants them all powers necessary or
desirable to carry out such responsibility, including administering the
Heitman Trust's business as described in the current prospectuses and
statement of additional information of the Heitman Trust; and
(3) this Agreement has been duly authorized, executed and delivered by the
Heitman Trust on behalf of the Fund and, assuming due authorization,
execution and delivery of this Agreement by the UAM Trust on behalf of the
UAM Heitman Portfolio, is a valid and binding obligation of the Heitman Trust
enforceable against the Heitman Trust in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization, arrangement,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
10. Further Conditions Precedent to Obligations of the Heitman Trust and the
UAM Trust. The obligations of the Heitman Trust and the UAM Trust to effectuate
this Agreement shall be subject to the satisfaction of each of the following
conditions:
(a) The Post-Effective Amendment and all other necessary state filings with
respect to the UAM Heitman Portfolio shall have been filed with the SEC and
all necessary state securities commissions and shall have become effective,
and no stop order suspending the effectiveness the Registration Statement or
amendment thereto shall have been issued, and no proceeding for that purpose
shall have been initiated or threatened by the SEC or any state securities
commission (and not withdrawn or terminated).
(b) The UAM Heitman Shares shall have been duly qualified for offering to
the public in all states or jurisdictions of the United States where required
to permit the transfer contemplated by this Agreement to be consummated.
(c) The UAM Trust and the Heitman Trust shall have received an opinion of
Drinker, Biddle & Reath, L.L.P. (based upon or subject to such
representations, assumptions, limitations or opinions of local counsel as such
counsel may deem appropriate or necessary) addressed to both parties on or
before the Effective Time of the Reorganization substantially to the effect
that for federal income tax purposes:
(1) The Reorganization will constitute a tax-free reorganization within
the meaning of Section 368(a)(1)(F) of the Code and the Fund and the UAM
Heitman Portfolio will each be a party to the reorganization within the
meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized by the Fund upon the transfer of
all of its assets to and assumption of the liabilities by the UAM Heitman
Portfolio in exchange solely for shares of the UAM Heitman Portfolio pursuant
to Section 361(a) and Section 357(a) of the Code.
(3) No gain or loss will be recognized by the UAM Heitman Portfolio upon
the receipt by it of all of the assets of the Fund in exchange solely for
shares of the UAM Heitman Portfolio pursuant to Section 1032(a) of the Code.
(4) The basis of the assets of the Fund received by the UAM Heitman
Portfolio will be the same as the basis of such assets to the Fund
immediately prior to the exchange pursuant to Section 362(b) of the Code.
(5) The holding period of the assets of the Fund received by the UAM
Heitman Portfolio will include the period during which such assets were held
by the Fund pursuant to Section 1223(2) of the Code.
5
<PAGE>
(6) No gain or loss will be recognized by the shareholders of the Fund
upon the exchange of their shares in the Fund for shares of beneficial
interest in the UAM Heitman Portfolio (including fractional shares to which
they may be entitled), pursuant to Section 354(a) of the Code.
(7) The basis of the shares of the UAM Heitman Portfolio received by the
shareholders of the Fund (including fractional shares to which they may be
entitled) will be the same as the basis of the shares of the Fund exchanged
therefor pursuant to Section 358(a)(1) of the Code.
(8) The holding period of the shares of the UAM Heitman Portfolio received
by the shareholders of the Fund (including fractional shares to which they
may be entitled) will include the holding period of the shares of the Fund
surrendered in exchange therefor, provided that the shares of the Fund were
held as a capital asset on the effective date of the Reorganization, pursuant
to Section 1223(1) of the Code.
(9) The UAM Heitman Portfolio will succeed to and take into account as of
the date of the proposed transfer (as defined in Section 1.381(b)-1(b) of the
Income Tax Regulations) the items of Fund described in Section 381(c) of the
Code, subject to the conditions and limitations specified in Sections 381(b)
and (c), 382, 383 and 384 of the Code.
(d) This Agreement and the Reorganization contemplated hereby shall have
been approved by the affirmative vote of holders of at least a majority of the
outstanding shares of the Fund, as defined in the 1940 Act, entitled to vote
at the special meeting (the "Special Meeting") called for such purpose.
(e) A liability insurance policy (the "Trustee Insurance Policy") providing
insurance for the Trustees of Heitman Trust who are not "interested persons"
(within the meaning of the 1940 Act) of Heitman Trust (the "Heitman
Independent Trustees") and for the UAM Trust with respect to any
indemnification by the UAM Trust of the Heitman Independent Trustees pursuant
to this Agreement satisfactory to the Heitman Trust and the Heitman
Independent Trustees shall have been procured by the Heitman Trust on or
before the Effective Time of the Reorganization, such policy to have an
aggregate limit of liability of $5.0 million to be for a period of 5 years
from the Effective Time of the Reorganization.
At any time prior to the Effective Time of the Reorganization, any of the
foregoing conditions may be waived by affirmative vote of each of the Boards of
Trustees of the Heitman Trust and the UAM Trust.
11. Indemnification of Heitman Independent Trustees.
(a) The UAM Trust shall indemnify (from the assets of the UAM Heitman
Portfolio) each of the Heitman Independent Trustees (each such person
hereinafter referred to as a "Covered Person") against all liabilities,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered Person in connection
with the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or legislative
body, in which such Covered Person may be or may have been involved as a party
or otherwise or with which such person may be or may have been threatened,
while in office or thereafter, by reason of being or having been a Trustee of
the Heitman Trust, except with respect to any matter as to which it has been
determined that such Covered Person had acted with willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (such conduct referred to hereafter as
"Disabling Conduct"). A determination that the Covered Person is entitled to
indemnification may be made by (i) a final decision on the merits by a court
or other body before whom the proceeding was brought that the person to be
indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a
court action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct or (iii) a reasonable
determination, based upon a review of the facts, that the Covered Person was
not liable by reason of Disabling Conduct by (x) a vote of a majority of a
quorum of the trustees of the UAM Trust who are neither "interested persons"
of the UAM Trust as defined in the 1940 Act nor parties to the proceeding
("Trustee Approval"), (y) an independent legal counsel in a written opinion
("Legal Opinion") or (z) a binding arbitration in accordance with the
applicable rules of the American Arbitration Association before a single
arbitrator selected in accordance with Section 12 of the American Arbitration
Association Commercial Arbitration Rules with substantial business experience
in the investment company industry and held in The Commonwealth of
Massachusetts ("Arbitration").
(b) Expenses, including accountants' and counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments,
in compromise or as fines or penalties), shall be paid from time to time by
the UAM Heitman Portfolio in advance of the final disposition of any such
action, suit or proceeding, provided that (i) the Covered Person shall have
6
<PAGE>
undertaken to repay the amounts so paid if it is ultimately determined that
indemnification of such expenses is not authorized under this Section 11 and
(ii) either (w) the Covered Person shall have provided security for such
undertaking, (x) the UAM Trust shall be insured against losses arising by
reason of any lawful advances or (y) a reasonable determination is made, based
upon a review of the facts, that the Covered Person was not liable by reason
of Disabling Conduct by (A) Trustee Approval, (B) Legal Opinion or (C)
Arbitration.
(c) As to any matter disposed of by a compromise payment by any such Covered
Persons referred to in Section 11(a), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved by
(A) Trustee Approval, (B) Legal Opinion or (C) Arbitration. Such approval by a
Trustee Approval, a Legal Opinion, or an Arbitration shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person
is subsequently adjudicated by a court of competent jurisdiction to have acted
with willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office.
(d) At any time after notice of a claim for indemnification under this
Agreement has been asserted by a Covered Person, such Covered Person or the
UAM Trust may initiate Arbitration for determination of any matter relating to
the parties' rights under Sections 11(a), (b) or (c) of this Agreement.
(e) A Covered Person shall not be entitled to indemnification pursuant to
this Section 11 with respect to any action, suit or other proceeding unless
the Covered Person shall have promptly submitted a claim for recovery under
the Trustee Insurance Policy with respect to such action, suit or other
proceeding.
(f) The right of indemnification provided by this Section 11 shall not be
exclusive of or affect any other rights to which any such Covered Person may
be entitled. As used in this Section 11, "Covered Person" shall include such
person's heirs, executors and administrators, an "interested Covered Person"
is one against whom the action, suit or other proceeding in question or
another action, suit or other proceeding on the same or similar grounds is
then or had been pending or threatened, and a "disinterested" person is a
person against whom none of such actions, suits or other proceedings or
another action, suit or other proceeding on the same or similar grounds is
then or has been pending or threatened.
(g) The UAM Trust agrees that in the event it or the UAM Heitman Portfolio
is subsequently acquired by merger, acquisition or the sale of all or
substantially all of its assets (each such event being a "Subsequent Merger"),
or it reorganizes or changes its domicile (each such event being a "Subsequent
Redomestication"), it will provide under the terms of such Subsequent Merger
or Subsequent Redomestication that the indemnification provided for under this
Section 11 shall continue in full force and effect. In the event that the UAM
Trust enters into negotiation for a Subsequent Merger or Subsequent
Redomestication, the UAM Trust shall promptly notify the Covered Person of
such intended Subsequent Merger or Subsequent Redomestication.
12. Effective Time of the Reorganization. The Reorganization shall be
effective as of the close of business on February 27, 1998 or at such other time
as fixed by the mutual consent of the parties (the "Effective Time of the
Reorganization"). Prior to the Effective Time of the Reorganization, the Heitman
Trust shall notify the shareholders of the Fund that the Reorganization and
related transactions are occurring. Further, the Heitman Trust shall cause
appropriate notice of such approval to be placed upon the Institutional Class
and Advisor Class prospectuses.
13. Termination. This Agreement and the transactions contemplated hereby,
whether or not they have been approved by the shareholders of the Fund, may be
terminated and abandoned:
(a) by mutual written consent of the Heitman Trust and the UAM Trust, at
any time prior to the Effective Time of the Reorganization;
(b) by either the Heitman Trust or the UAM Trust, by notice to the other,
without liability to the terminating party on account of such termination
(provided any such termination shall not excuse the terminating party from any
liability arising out of a default or breach of this Agreement by such
terminating party) if the Effective Time of the Reorganization shall not have
occurred on or before June 30, 1998; or
(c) by either the Heitman Trust or the UAM Trust, by notice to the other,
without liability to the terminating party on account of such termination
(provided any such termination shall not excuse the terminating party from any
liability arising out of a default or breach of this Agreement by such
terminating party), if (i) the other party shall fail to perform in any
material respect its
7
<PAGE>
agreements contained herein required to be performed prior to the Effective
Time of the Reorganization, (ii) the other party materially breaches any of
its representations, warranties or covenants contained herein or (iii) any
other express condition precedent to the obligations of the terminating party
has not been met and it reasonably appears that it will not or cannot be met.
14. Amendment. This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed upon in writing by the parties; provided,
however, that following the Special Meeting, no such amendment may have the
effect of changing the provisions for determining the number of UAM Heitman
Shares to be paid to the Fund shareholders under this Agreement to the detriment
of the Fund shareholders without their further approval.
15. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
16. Headings, Counterparts, Assignments.
(a) The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the benefit of
parties hereto and their respective successors and assigns, but no assignment
or transfer hereof or of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason of
this Agreement.
17. Entire Agreement. This Agreement constitutes the entire agreement of the
parties as to the subject matter hereof. The representations, warranties and
covenants contained herein or in any document delivered pursuant hereto or in
connection herewith, including without limitation the indemnification
obligations of Section 11, shall survive the consummation of the transactions
contemplated hereunder.
18. Further Assurances. The UAM Trust and the Heitman Trust shall take such
further action as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
19. Binding Nature of Agreement.
(a) As provided in the Heitman Trust Agreement on file with the Secretary
of the Commonwealth of Massachusetts, it is expressly agreed that the
obligations of the Heitman Trust hereunder shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents, or employees of the
Heitman Trust personally, but shall bind only the assets and property of the
Fund. The execution and delivery by such officers shall not be deemed to have
been made by any of them individually or to impose any liability upon any of
them personally, but shall bind only the assets and property of the Fund.
(b) As provided in the UAM Trust's Agreement and Declaration of Trust, it
is expressly agreed that the obligations of the UAM Trust hereunder shall not
be binding upon any of the Trustees, shareholders, nominees, officers, agents,
or employees of the UAM Trust personally, but shall bind only the assets and
property of the UAM Heitman Portfolio. The execution and delivery by such
officers shall not be deemed to have been made by any of them individually or
to impose any liability upon any of them personally, but shall bind only the
assets and property of the UAM Heitman Portfolio.
20. Covenants of the Heitman Trust. The Heitman Trust shall deliver to the
UAM Trust prior to noon on the first business day after the Effective Time of
the Reorganization a statement of the Fund's assets and liabilities as of the
close of business on the day prior to the Effective Time of the Reorganization
as reflected on the books of the Fund.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
HEITMAN SECURITIES TRUST on
behalf of the HEITMAN REAL ESTATE FUND
/s/ William L. Ramseyer
By: William L. Ramseyer
--------------------------------
Title: Chairman and Chief Executive
Officer of the Heitman
Securities Trust
UAM FUNDS TRUST on behalf of the
UAM/HEITMAN REAL ESTATE PORTFOLIO
/s/ NORTON H. REAMER
By: Norton H. Reamer
---------------------------------
Title: Trustee, President and
Chairman of the UAM Funds Trust
9
<PAGE>
EXHIBIT 11(A)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Amendment to the
Prospectuses and Amendment to the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 12 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
February 23, 1998, relating to the financial statements and financial highlights
appearing in the December 31, 1997 Annual Report to Shareholders of Heitman Real
Estate Fund, which is also incorporated by reference in the Registration
Statement. We also consent to the references to us under the heading
"Financial Highlights" in the Amendment to the Prospectuses and under the
heading "Financial Statements" in the Amendment to the Statement of Additional
information.
PRICE WATERHOUSE LLP
Philadelphia, PA
April 17, 1998
<PAGE>
[ARTHUR ANDERSEN LLP LETTERHEAD APPEARS HERE]
EXHIBIT 11(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to all references to our
firm included in Post-Effective Amendment No. 12 to the Registration Statement
on Form N-1A of the Heitman Securities Trust (File No. 33-24611).
Arthur Andersen LLP
Philadelphia, PA
April 17, 1998
<PAGE>
SCHEDULE OR COMPUTATION OF PERFORMANCE QUOTATIONS
HEITMAN REAL ESTATE PORTFOLIO
EXHIBIT 16--INSTITUTIONAL CLASS
1. Average Annual Return (As of December 31, 1997)
at Maximum Offering Price
N
P(1+T) = ERV
Where: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of period
<TABLE>
<CAPTION>
Since Inception
One Year Five Years Ten Years 01/4/89
-------- ---------- --------- ---------------
<S> <C> <C> <C>
P = $1,000 P = $1,000 P = $1,000 P = $1,000
T = 21.120% T = 18.020% T = N/A T = 11.370%
N = 1 years N = 5 years N = 10 years N = 9 years
ERV = $1,211 ERV = $2,290 ERV = $1,000 ERV = $2,636
</TABLE>
<PAGE>
SCHEDULE OR COMPUTATION OF PERFORMANCE QUOTATIONS
HEITMAN REAL ESTATE PORTFOLIO
EXHIBIT 16--ADVISOR CLASS WITH LOAD
1. Average Annual Return (As of December 31, 1997)
at Maximum Offering Price
N
P(1+T) = ERV
Where: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of period
<TABLE>
<CAPTION>
Since Inception
One Year Five Years Ten Years 05/15/95
-------- ---------- --------- ---------------
<S> <C> <C> <C>
P = $1,000 P = $1,000 P = $1,000 P = $1,000
T = 14.07% T = N/A T = N/A T = 24.700%
N = 1 years N = 5 years N = 10 years N = 2.63 years
ERV = $1,204 ERV = $1,000 ERV = $1,000 ERV = $1,000
</TABLE>
<PAGE>
SCHEDULE OR COMPUTATION OF PERFORMANCE QUOTATIONS
HEITMAN REAL ESTATE PORTFOLIO
EXHIBIT 16--ADVISOR CLASS WITH NO LOAD
1. Average Annual Return (As of December 31, 1997)
at Maximum Offering Price
N
P(1+T) = ERV
Where: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of period
<TABLE>
<CAPTION>
Since Inception
One Year Five Years Ten Years 05/15/95
-------- ---------- --------- ---------------
<S> <C> <C> <C>
P = $1,000 P = $1,000 P = $1,000 P = $1,000
T = 20.440% T = N/A T = N/A T = 27.030%
N = 1 years N = 5 years N = 10 years N = 2.63 years
ERV = $1,204 ERV = $1,000 ERV = $1,000 ERV = $1,000
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000840084
<NAME> HEITMAN REAL ESTATE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 177,671
<INVESTMENTS-AT-VALUE> 214,576
<RECEIVABLES> 6,630
<ASSETS-OTHER> 19
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 221,225
<PAYABLE-FOR-SECURITIES> 571
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,257
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 183,254
<SHARES-COMMON-STOCK> 20,958
<SHARES-COMMON-PRIOR> 19,059
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (191)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 36,904
<NET-ASSETS> 219,968
<DIVIDEND-INCOME> 9,158
<INTEREST-INCOME> 862
<OTHER-INCOME> 0
<EXPENSES-NET> 2,723
<NET-INVESTMENT-INCOME> 7,297
<REALIZED-GAINS-CURRENT> 41,132
<APPREC-INCREASE-CURRENT> (7,817)
<NET-CHANGE-FROM-OPS> 40,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,297
<DISTRIBUTIONS-OF-GAINS> 41,701
<DISTRIBUTIONS-OTHER> 872
<NUMBER-OF-SHARES-SOLD> 9,111
<NUMBER-OF-SHARES-REDEEMED> 10,066
<SHARES-REINVESTED> 2,854
<NET-CHANGE-IN-ASSETS> 10,888
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (182)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,489
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,723
<AVERAGE-NET-ASSETS> 213,716
<PER-SHARE-NAV-BEGIN> 10.96
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 1.82
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.69
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.49
<EXPENSE-RATIO> 1.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
